Legal sports betting may be coming to Minnesota. But it does not appear to be in much of a rush.
Consider the Senate bill that could partially legalize sports books in Minnesota narrowly slipped from its first committee Thursday (and faces an uncertain response at its next stop). The vast majority leader of the Senate isn’t keen on the idea. The state’s 11 Native American tribes are opposed. Anti-gambling and many religious organizations are opposed. And, oh yeah, it will not increase much money.
There’s this: the House bill on the exact same topic has not been set for a hearing, lacks support in DFL leadership, and faces lots of the same obligations as the Senate bill.
Other than that, it is a sure thing.
Inspired by Senate Taxes Committee Chair Roger Chamberlain, R-Lino Lakes, the Senate’s sports betting bill, SF 1894, does have sponsorship from both Republican and DFL senators. And it made its first official look before Chamberlain’s own committee Thursday. “This is a company, it is a profession, it is amusement,” Chamberlain said. “People do make a living from this… and they also have a great deal of fun”
And even though it is not legal in Minnesota, there are many men and women who bet illegally or via abroad mobile or online websites. Chamberlain thinks by legalizing and controlling it, the condition could bring to the surface what’s currently underground.
But sports gambling is a low profit business for casinos; a lot of what’s wagered is returned to players as winnings, which means that could be subject to state taxation,”the grip,” is comparatively small. Chamberlain’s bill would tax that amount — the amount of wagers minus winnings — at 6.75 percent.
State Sen. Roger Chamberlain
MinnPost photograph by Peter Callaghan
State Sen. Roger Chamberlain
“Many states think it’s a money-maker for them and it may be,” Chamberlain said. “But we are not in this to raise a whole lot of revenue. We want people to share in the business and have some fun doing it.” Race and casinos tracks could benefit by using sports gambling as a way to bring more people in their casinos, he said.
The bill claims that if the state’s tribes wish to offer sports betting, they’d have to ask a new compact with the state, something demanded by federal law. The state is bound to bargain in good faith and that includes agreeing to some kind of gambling already allowed off reservation.
But the executive director of the Minnesota Indian Gaming Association, John McCarthy, said Thursday that the tribes have many concerns about both the House and Senate bills, also are in no hurry to add sports gambling to their operations.
McCarthy said the tribes have spent billions of dollars in gaming centers and use them to raise money to pay for”services, schools, schools, home, nutrition plans, wastewater treatment centers, law enforcement and emergency services, and other services.”
“Because these operations are crucial to the capacity of tribal governments to satisfy the requirements of the people, MIGA has had a longstanding position opposing the expansion of off-reservation gaming in Minnesota,” McCarthy explained. The mobile facets of the bill, ” he said, would”make the most significant expansion of gambling in Minnesota in over a quarter-century, and therefore MIGA must respectfully oppose SF1894.”
He said that the tribes were particularly worried about mobile gaming and how it could lead to much more online gaming,”which represents an even more significant threat to all sorts of bricks-and-mortar facilities that currently offer gambling: Japanese casinos, race tracks, lottery outlets, and pubs together with charitable gambling.”
Also opposed was an anti-gambling expansion set and a religious social justice organization. Ann Krisnik, executive director of the Joint Religious Legislative Coalition, mentioned the state fiscal note that said the revenue impacts of this invoice were unknown.
“It is unknown not only in terms of revenue, but it is unknown also in terms of the greatest costs this generates for the state,” Krisnik stated, citing societal costs of more gambling.
Jake Grassel, the executive director of Citizens Against Gambling Expansion, said the bill was a terrible deal for the nation. “The arguments in favor of legalizing sports betting may seem meritorious at first blush — that is, bringing an unregulated form of gambling out of the shadows,” Grassel stated. “Upon further reflection and consideration, the costs are too high and the benefits are too small.”
A method to’begin conversations with the tribes’
The Senate bill ultimately passed the Taxes Committee with five yes votes, two no votes and a”pass” Two other members were absent. It now goes to the Senate Government Operations Committee.
After the taxation committee vote, Chamberlain stated he believes this a method to begin conversations with the tribes. Even if the bill passes, it doesn’t take effect until September of 2020. And compacts would need to be negotiated to clear the way for on-reservation sports gambling.
“We are hopeful that they’ll come on board,” Chamberlain said of these tribes. “Their business model won’t last forever. Young folks don’t visit casinos. I visit them sometimes with my spouse and others and frequently I am the youngest one there and I’m in my mid-50s. We believe it is a business enhancer.
“I know their care but we’re right there with them and when they make more comfortable and more individuals understand about it, I am confident we will move,” he explained.
Later in the day, Senate Majority Leader Paul Gazelka said the GOP caucus has not met to talk about the matter and he isn’t in a hurry. He said the cellular gambling aspects are of particular concerns to him and he is personally opposed.
“I do know that it needs more time and that’s the one thing I am gonna inquire of this bill,” Gazelka explained. “It is come forward around the country and we are gonna need to deal with it like any other issue. Nonetheless, it’s not a partisan issue.”
Some thorny legal questions All this became possible when the U.S. Supreme Court ruled last spring that Congress had exceeded its authority when it declared that sports gambling was prohibited (except in Nevada, where it was operating at the time). New Jersey had sued to clear the way for sports books at its fighting Atlantic City casinos.
The conclusion quickly led states throughout the country contemplating whether to legalize and regulate sports betting. Eight have, and surveys suggest legalizing sports betting has wide popular support.
The problem for the nation’s gambling tribes is whether they would make enough out of the new gaming option to compensate for the potentially gigantic growth of it off-reservation. There’s also no clear answer to whether tribes can do much with mobile gambling, because the federal Indian Gaming Regulatory Act that generated the financial increase of casino gambling allows betting only on reservations. Though some countries have announced that using the computer servers which process bets on reservations is sufficient to comply with the law, the issue has not yet been litigated.
The House and Senate bills also raise a thorny political and legal dilemma since they apply state taxation to tribal gambling, something the federal Indian Gaming Regulatory Commission has ruled is not permitted. While tribes in different states have consented to discuss gambling revenue with countries, it has come with valuable concession — such as tribal exclusivity over gambling.
Even though the House bill provides the tribes a monopoly for now, the Senate version cuts the nation’s two horse racing tracks in on the activity. A 2018 evaluation of this problem for the Minnesota Racing Commission calls sports gambling a”momentous threat” to racing, but notes that all the countries but one that have legalized sports betting have let it be provided at race tracks. As reported by the commission, the Thoroughbred Idea Foundation has concluded that”he most obvious means of minimizing the potential negative impacts of legalized sports gambling on the racing industry would be to allow sports gambling at racetracks and also to direct internet revenues to the support of racing and breeding in the nation. ”
The Senate bill allows a kind of cellular betting but necessitates using geofencing to ensure the bettor is within state boundaries and requires them to get an account that has been created in person at the casino or race track. Additionally, it generates a Minnesota Sports Wagering Commission, which will make rules including what kinds of bets would be permitted and also control the games.
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