Published at 07:57h on January 26, 2022
Last updated: January 26, 2022, 07.57h
Next week, the Minnesota Legislature meets again. There are good odds that lawmakers will meet in Saint Paul to revive efforts to legalize betting on sports.
Minnesota is bordered in four states. Sports betting is legal and available in each of these states. After amending Class III compacts with these tribes, regulated sports gambling was permitted in North Dakota and Wisconsin.
Iowa was the first state to allow its commercial casino to start running sportsbooks in 2019, and it continues to be the most popular in the country. Additionally, the state allows mobile sports betting.
South Dakota casinos in Deadwood and tribal casinos are licensed to operate on-site betting shops. Mobile wagering can only be done in commercial casinos.
Minnesota, home to only tribal casinos, could follow Wisconsin and North Dakota’s lead and amend tribal compacts to include sports wagering, but lawmakers have struggled to find common ground that appeases the state’s and tribal interests. Commercial entities, which are also seeking entry to the sports betting market are adding to the legal juggernaut.
2022 Optimism
There are many state lawmakers who feel Minnesota needs to legalize sports betting to curb offshore activity that’s already going on, and also keep gaming money from flowing to neighboring states where sportsbooks are up and running.
Minnesota state Rep. Pat Garofalo, R-Farmington, told the StarTribune recently that he’s “cautiously optimistic” regarding a sports betting bill achieving bipartisan support in 2022. In each of the two previous legislative sessions Garofalo supported sports betting legislation.
This month, Garofalo (D-Cottage Grove), and Sen. Karla BIGHAM (D-Cottage Grove), introduced a sports betting statute which would have granted all Class III gaming tribes in Minnesota sports betting privileges. Minnesota is home to 11 federally recognised tribal nations that own or operate 19 casinos.
Garofalo and Bigham’s 2021 sports betting legislation sought to allow the tribes to maintain a monopoly on sports betting for the first year at their land-based casinos. The tribal casinos could offer online sports betting after 12 months. However, horse racing tracks that partner with third-party iGaming companies like DraftKings could also offer online wagering.
The proposed tax rate for mobile sportsbook revenue was 8 percent and on-site betting income was 6 percent.
Tribal Opposition
Minnesota’s tribes oppose sports betting legalization unless it is explicitly reserved for their sovereign nations. Unlike most other Class III gaming compacts which require tribal casinos to share some portion of their gaming earnings with their host state, Minnesota’s tribal arrangements do not come with any revenue sharing provisions.
However, the tribes do pay the state certain fees to cover Minnesota’s regulatory oversight of their operations. They also pay payroll taxes of approximately $125 millions per year.
Minnesota’s tribal compacts are substantially similar. The legal language also states that the Native Americans retain exclusive rights to casino gambling. Compacts are indefinitely binding and cannot be reopened, renegotiated or amended unless both parties agree.
Minnesota is home to only two tribal casinos, but it has one the largest charitable gaming markets in America. Minnesota Gambling Control Board reported, prior to the pandemic that hit in fiscal 2019, that nearly 3,000 charitable gaming venues had generated gross sales of $2.3B that year.
