Minnesota lawmakers could still legalize sports betting this session

ST. PAUL — While legal sports betting appears to have sputtered to a stop in the Minnesota Legislature this year, it's too early to say lawmakers won’t act by the end of the session.

For the first time in over a month, a Senate committee on Wednesday, May 4, heard the proposal, which has encountered snags due to a disagreement over whether tribes should have exclusive rights to run sports betting. The state’s two horse racing tracks want in on betting as well and have generally found more allies in the Senate.

Senate bill sponsor Sen. Matt Klein, DFL-Mendota Heights, introduced a change to the bill he said he hoped might make the racetracks more receptive to not being allowed to take bets on sports: 30% of revenue from taxes on sports betting would go to the tracks.

“We have worked hard throughout the session to try to garner (their) support and honor the fact that those are destinations in Minnesota,” Klein said, telling the committee the revenue sharing was a “good faith effort” to accommodate the tracks. But the tracks still aren't biting.

Under the altered bill, a "Horse Racing Economic Development Fund" run by the Minnesota Racing Commission would hold the funds and use them to help the tracks continue operations. Once the fund has $20 million, it can only take in $3 million each year. Sports betting is not expected to be a big money-maker for Minnesota, with past annual revenue estimates of around $12 million.

Canterbury Park in Shakopee and Running Aces in Columbus, the two metro-area racetracks, said they still oppose the bill since it preserves tribal exclusivity. Their concern is that getting left out of the biggest expansion of gambling in 40 years could do significant harm to their business.

“While we appreciate Senator Klein’s efforts, Running Aces will need to find other sources of revenue to offset the revenue lost with the current version of the sports betting bill,” said Tracie Wilson, the track’s chief financial officer.

The Minnesota Indian Gaming Association said it supports the bill, even with some revenue going to the tracks.

It’s the second year in a row where legal sports betting appeared to have good odds of making it to the governor’s desk, but disagreements over whether Minnesota’s two horse racing tracks should be in on the action have thrown a wrench into the process.

With support from six professional sports teams and the tribal gaming association, backers of legal sports betting in Minnesota had reason to be optimistic at the start of this legislative session.

After three months marked by a whirlwind of bills getting passed and enacted into law, legal sports betting appeared to have sputtered to a stop. Its last committee action in the Senate House was in March.

Last year, the House passed a bill backed by Reps. Zack Stephenson, DFL-Coon Rapids, and Pat Garofalo, R-Farmington, but amid partisan gridlock, a version of the bill in the GOP-controlled Senate never gained steam.

The Senate tabled the sports betting bill at its Wednesday meeting without taking action. It would require more committee work before making it to the Senate floor.

Gov. Tim Walz in the past has said he’d only sign a sports betting bill supported by the state’s tribal gaming association, which opposes horse tracks handling wagering.

Lawmakers must conclude their business by May 22.

More than 30 states have legalized wagering on sports since the U.S. Supreme Court ended a federal ban on the practice in 2018, and all of Minnesota’s neighbors have legalized sports betting in some form.

Iowa, which legalized sports betting in 2019, taxes net receipts from sports betting at 6.75% and brought in close to $9.6 million in revenue last year in a state with an $8 billion budget.