Keep Talking: Minnesota Lawmakers Open Sports Betting Discussion

A pair of Minnesota lawmakers hosted a virtual press conference Tuesday morning to formally announce they’ll be filing sports betting legislation, and they all but implored their peers to create a safe, legal environment for bettors.

“It’s already being done flagrantly,” Sen. Karla Bigham said. “So it’s time to put some guardrails around it. … But you don’t legalize sports betting, or marijuana, for that matter, to solve a budget problem, you do it to create a good consumer experience.”

Bigham held a joint press conference with Rep. Pat Garofalo, who has previously introduced sports betting legislation in Minnesota, but the state’s tribes are and were opposed, and those past legislative attempts have stalled. In addition, legislative leadership is reportedly opposed — or at least not too interested — in taking up sports betting this session.

‘People are ready to see it happen’

On Tuesday, both Bigham and Garofalo said their bills are merely starting points for conversation, but both also clearly want to legalize as soon as possible. States all around Minnesota already have or are considering legalizing, including mobile wagering with remote registration permitted in Iowa.

South Dakota voters legalized via referendum last November, and the legislature is now developing a framework for it, while a hearing is set in North Dakota on Wednesday to discuss a new sports betting bill.

“People are ready to see it happen,” Garofalo said. “They are sick of driving to Iowa to place sports bets.”

Bigham said of Wisconsin, one of two Minnesota border states without legal wagering: “If Wisconsin does it ahead of us, I don’t know what to think.”

The requirement that patrons register their accounts in person is likely to draw criticism from stakeholders. When Iowa legalized in 2019, the law included an 18-month mandate for in-person registration, which sunset on Jan. 1, 2021. The expectation is that Iowa sportsbooks will see a big bump in handle and gross gaming revenue this month.

And in Illinois, Gov. J.B. Pritzker has suspended in-person registration (mostly) since June, in the face of the COVID-19 crisis. During the press conference, Bigham declined to go into details about the specifics of the bill. But with regard to the in-person registration requirement, she said, “It’s important to have [in-person registration] in there for a discussion point. We have to show what has worked and what hasn’t worked. … That will be a robust part of the conversation going forward.”

The lawmakers gave a brief overview of the bills that will be filed — retail sports betting would be allowed at casinos and racetracks across the state, and after one year, mobile/online platforms could launch, but in-person registration would be required. The tax rate would be 6% on retail wagering revenue and 8% on mobile betting revenue. The bills should be filed and available in the next day or two, and both lawmakers reiterated that the bills are the start of the conversation.

“We wanted to introduce a bill to keep everyone at the table to discuss this,” Bigham said. “And to give people who support sports betting a voice at the table. It’s pretty different than anything that has been introduced.”

Bigham and Garofalo announced their intention to file legislation last week, and between then and Tuesday’s press conference, Minnesota’s tribes again stated their opposition. Calls to the Minnesota Indian Gaming Association by Sports Handle went unanswered.

The tribes’ position is not unusual. With the exception of Michigan, where tribes agreed to have sports betting activities regulated by the state and pay taxes, those in Indian Country across the U.S. have been slow to embrace mobile sports betting for fear that it will take business away from their retail locations. Connecticut tribes appear to be on the cusp of supporting legislation that would allow for statewide mobile, but the state is likely to see a duopoly limited to sportsbooks connected only to the state’s two tribes, rather than a market where a larger number of brands compete. And in Washington State, lawmakers legalized retail sports betting at tribal casinos exclusively last year, but not online.

MN Speaker: Sports betting has ‘no hope’

Within the legislature, Bigham and Garofalo appear to have an uphill battle after House Speaker Melissa Hortman last week unequivocally stated sports betting is a non-issue for leadership.

“We don’t really need social issues that divide people,” Hortman told WCCO. “I don’t know that any of the legislative leaders support [sports gambling legislation]. I think that legislation has no hope this year.”

Bigham, who said during the press conference that she and Hortman are close friends, played down the comments, as did Garofalo.

“I feel like it’s similar to the Sunday liquor sales agreement,” he said. “Everyone said it wasn’t going to go, and then it did.”

The state legalized the sale of liquor on Sundays in 2017.

Minnesota’s legislative session ends May 17. Garofalo said during the press conference that the House was holding an informational hearing on sports wagering today, but other than that no other hearings have been scheduled in either chamber.

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