Minnesotans came so close to having legalized sports betting in 2024.
Despite having various parties on board needed to make it happen, lawmakers couldn’t get it done in the final moments of this year’s legislative session last week, even with trying to attach sports betting to a historical horse racing prohibition bill.
Sure, they could still have an emergency session to try to pass a late bill, but in an election year, it’s highly unlikely.
Still, does having the North Star State’s tribal nations, two horse racing tracks, charities, and professional sports teams agreeing to a taxation and regulation framework bode well for the future of sports betting legislation?
Two Indian Gaming Association officials believe so. Conference chairman Victor Rocha and executive director Jason Giles shared optimism and mapped out potential roadblocks during a sports betting webinar Wednesday.
“Minnesota has been at the forefront of some very big decisions and I don’t expect that to change any time soon,” Rocha said.
Passion for sports
The North Star State is home to big pro teams like the Minnesota Timberwolves, Twins, Vikings, and Wild, and popular college programs.
Not only would legal Minnesota sports betting aid those franchises in terms of lucrative financial partnerships, but fans of those teams could heighten those brands through wagering.
“There’s no doubt that sports betting would be popular throughout the state,” Giles said. “And now you’re being surrounded by Wisconsin and everybody else. Minnesotans love their teams.”
Sticking point
Despite a years-long attempt, it’s unknown how keen legislators will be to pick up the sports betting issue in 2025 or if the deals that were made between stakeholders is going to last.
Rocha sees a certain legal matter as a potential roadblock in getting the tribes, which would run online sports betting through partnerships with operators, in full agreement.
Running Aces, which operates a harness track, filed a lawsuit against executives who run three tribal casinos, alleging that those locations violate state law and the Indian Gaming Regulatory Act by offering illegal card games.
Rocha believes that could hold back any sports betting deals that seemed solid earlier this month.
“Maybe the lawsuits were what they needed, but if you’re not going to drop them, this has the potential to go back into the toilet very fast,” Rocha said. “I can’t imagine the tribes backing down. They are very powerful tribes. Very smart tribes and they’re not going to be taken advantage of.”
California keeping watch
If Minnesota’s stakeholders can come together and get through all of that to bring legal sports betting to the state, Rocha said it would be a learning experience for other states, like California, that are having a tough time getting tribes, legislators, and those with financial interests on the same page.
“Whenever these kind of things can be done successfully it’s a lesson for anyone in this country,” Rocha said. “There are no hills that are insurmountable, no type of relationships, just negotiations. More importantly, making sure that the tribes aren’t sliding back.”
California’s tribes opposed a sports betting initiative that never made it to a ballot, and Rocha believes wagering has been tabled until at least 2026.
Increased taxation
One of the areas of contention in Minnesota surrounded taxation, where an initial rate of 10% on operators was eventually doubled as multiple bills worked through the legislation.
That’s also a hot topic across the country as states that already have legal sports betting operating are looking into increased tax revenue by hiking the rate.
Legislators in Illinois approved a rate raise from 15% to 35%.
The IGA officials see this as a rising trend and something that’s become unavoidable.
Rocha said there was such a rush to get sports betting going that operators were able to get by with lower rates in some states, but now that the markets have matured, state officials are seeing more revenue opportunities.
“They knew they had to move faster than the legislators before they figured out what the impact was going to be on the community,” Rocha said. “Now they’re starting to take a different look at it.
“That’s the last thing the industry needs. Nobody likes taxation, but taxation is a conversation we should be having.”
Rocha said he’s heard of 50% to 60% tax rates on sports betting in some jurisdictions, which could force certain operators out of those markets.
“I don’t know how it’s even workable at those kind of rates,” Rocha said. “I think that more time is not a friend to the industry. I think a lot of people are reevaluating. That’s the reason for the big push.”
