- Sen. Matt D. Klein (DFL-53) today introduced a sports betting bill
- The bill provides state tribes with power over sports betting
- Portions of the tax revenue will be earmarked for horse tracks and to provide tax relief for charitable gaming organizations
A new Minnesota sports betting bill introduced today in the senate specifically earmarks tax revenues for two powerful entities that have opposed tribal controlled sports betting in the past.
Sen. Matt D. Klein (DFL-53) today introduced SF 757, a bill to legalize retail and online sports betting for the state’s 11 Native American Tribes. The legislation was referred to the state and local government committee.
Klein’s legislation earmarks tax revenues for horse tracks and to provide tax relief for charitable gaming organizations in the state.
Tribal Controlled Sports Betting
Klein’s bill will give control over Minnesota sports betting to the state’s 11 tribes. Those 21 and older will be eligible to bet on sports.
There are 11 federally recognized tribes in Minnesota. Each tribe will be eligible to contract and partner with an online sports betting operator.
The following tribes will be eligible to offer retail and/or online sports betting if the bill is approved:
- Bois Forte Band of Chippewa
- Fond du Lac Band of Lake Superior Chippewa
- Grand Portage Band of Chippewa
- Leech Lake Band of Ojibwe
- Lower Sioux Indian Community
- Mille Lacs Band of Ojibwe
- Prairie Island Indian Community
- Red Lake Nation
- Shakopee Mdewakanton Sioux Community
- Upper Sioux Community
- White Earth Nation
The bill institutes a 22% tax on online sports betting net revenues. Any tribe that does not contract with an online sports betting platform provider will be eligible to receive an equal portion of the state’s “sports betting equalization account,” which will receive 15% of all online sports betting tax revenues.
Online sports betting tax revenues will be distributed as follows:
- 45% to the commission of revenue
- 15% to the racing economic development account
- 15% to the sports betting equalization accounts
- 10% to the sports marketing and awareness account
- 10% to the commission of human services
- 5% to the amateur sports integrity and participation account
Charitable Gambling, Horse Tracks Will Receive Tax Revenues
Included in Klein’s legislation is wording to ensure Minnesota race tracks and charitable gambling organizations will receive a piece of the online sports betting tax revenue pie. Both the tracks and charitable organizations have protested tribal control of online sports betting over the past several years.
Under his bill, each organization licensed to conduct lawful charitable gambling in the state will qualify for tax relief payments. Payments will be made on a “pro rata basis according to the organization’s combined net receipts.”
The bill will also establish the racing economic development account, which will make payments to the state horse tracks. The first $12.5 million in revenue submitted to the account will be earmarked as follows:
- 40% to a licensed racetrack that primarily conducts standardbred horse racing
- 60% to a licensed racetrack that primarily conducts thoroughbred and quarter horse racing
Any amount exceeding $12.5 million in the fund will be distributed as follows:
- 28% to a licensed racetrack that conducts standardbred horse racing
- 72% to a licensed racetrack that primarily conducts thoroughbred and quarter horse racing
Required Problem Gambling Studies
Also included in the bill is a requirement for the state to commission two studies if sports betting is legalized. The first will be a baseline study on gambling activity in Minnesota prior to the implementation of sports betting in the state. The study must determine the prevalence of gambling and the incident of problem gambling in the state, identifying the number of people who participate in various forms of gambling.
Three years after the baseline study, and every three years after, the state must commission an update for the study.
Secondly, the state will be required to commission a study on the impact of sports betting on the prevalence of gambling disorders, suicide related to gambling disorders, and risks to youth of developing gambling disorders, based on outside research from jurisdictions where sports betting is occurring.
Minnesota recently passed a sports betting bill that not only legalizes sports betting in the state but also allocates tax revenue generated from the activity to support horse racing tracks and charitable gaming organizations. This move is seen as a win-win for both the state’s economy and the local communities that benefit from these industries.
Under the new legislation, sports betting will be regulated by the Minnesota Gambling Control Board, which will oversee licensing and ensure that operators comply with state regulations. The bill also includes provisions to protect consumers and prevent problem gambling, such as requiring operators to offer resources for responsible gambling and establishing a self-exclusion program for individuals who wish to opt out of betting.
One of the key components of the bill is the allocation of tax revenue to support horse racing tracks in the state. This funding will help to revitalize the struggling industry, which has faced declining attendance and revenue in recent years. By providing financial support to tracks, the state hopes to preserve jobs and maintain the tradition of horse racing in Minnesota.
In addition to supporting horse racing, the sports betting bill also directs tax revenue to charitable gaming organizations. These organizations play a vital role in supporting local communities through fundraising events and charitable activities. The funding from sports betting will help to offset any losses these organizations may have experienced due to the COVID-19 pandemic and ensure that they can continue to provide valuable services to those in need.
Overall, the passage of the sports betting bill in Minnesota represents a significant step forward for the state’s economy and its local communities. By allocating tax revenue to support horse racing tracks and charitable gaming organizations, the legislation aims to stimulate economic growth, create jobs, and ensure that important industries continue to thrive. As sports betting becomes more prevalent across the country, Minnesota is positioning itself as a leader in responsible gambling regulation and support for key sectors of its economy.
