Will Horse Track Amendment Make Minnesota Sports Betting More Palatable?

• After weeks of dormancy, Minnesota Senators took up a bill in committee to legalize sports betting in the state
• The Senate State and Local Government Committee did not take action on Sen. Matt Klein’s bill
• In an effort to gain support from the state’s two horse tracks, Klein proposed an amendment to cut them in on sports betting revenues

A Minnesota lawmaker yesterday presented an interesting amendment to his Minnesota sports betting bill during a Senate committee hearing, proposing a massive change to integrate state horse tracks into sports betting plans.

Sen. Matt Klein (DFL-53) proposed several amendments to his sports betting bill, SF 1949, during yesterday’s Senate State and Local Government Committee hearing, one of which would send 30% of the state’s sports betting tax revenues to a newly created fund to support Minnesota’s horse tracks.

With the amendment, Klein hopes to appease state race tracks being prohibited from offering sports betting on their own.

The committee heard testimony on the bill, but took no action. It’s expected to discuss again next week.

Too Little, Too Late?

Klein’s sports betting bill is a Senate companion piece to Rep. Zack Stephenson’s (DFL-Coon Rapids) bill, HF 2000, which seeks to legalize retail and online sports betting for Minnesota state tribes. The proposed legislation gives tribes sports betting exclusivity, allowing each to have a retail sportsbook location and one digital skin to offer online sports betting.

Representatives for the state’s two horse racing tracks, Running Aces and Canterbury Park, have opposed any bill that gives tribes exclusivity over Minnesota sports betting.

In an effort to appease the tracks, Klein proposed an amendment to dedicate 30% of the state’s sports betting revenue to a newly created Horse Racing Economic Development Fund operated by the Minnesota Racing Commission. The funding would be capped at $20 million, but after the cap is reached an additional $3 million annually would be deposited for track use.

The Horse Racing Economic Development Fund could be used by the tracks to support mental health programs for jockeys, stewards, and backstretch employees, increases in compensation to backstretch employees, funding research projects to study equine illness and disease, and improvements in breeding techniques, Klein said during the hearing.

Representatives for both tracks thanked the Senator for including the amendment, but did not support the changes during the committee hearing.

Tracie Wilson, CFO of Running Aces, said it is “essential that the state’s two race tracks be treated fairly with respect to any sports betting expansion.”

“While we appreciate Sen. Klein’s efforts, Running Aces will need to find other sources of revenue to offset the lost revenue with the current version of the sports betting bill. Sports betting will result in a significant loss of revenue for Running Aces. The tracks stand to lose revenues that are necessary to sustain the entire operations in order to support horse racing,” she said.

Wilson said the track supported previous legislation to allow craps and roulette at the state’s two tracks, and Native American casinos, which would go a long way towards providing additional revenue if sports betting is legalized.

Canterbury Park CEO Randy Sampson also thanked Klein for his efforts but said the revenue plan wouldn’t be enough to offset potential losses for tracks.

“We are expressing our opposition to the bill today,” Sampson said.

Tribal Sports Betting Exclusivity Will Remain

Andy Platto, executive director of the Minnesota Indian Gaming Association (MIGA), said MIGA would not take an official stance on the amendment, but the group would still support the bill if it was included.

During 2022 sports betting discussions, MIGA opposed inclusion of state horse tracks in any sports betting plans. Its support for a sports betting bill is crucial for any potential legalization efforts in Minnesota.

Klein said tribal sports betting exclusivity will remain in any potential legislation moving forward this year.

“This bill has been amended along the way, but one principle which has never been violated, nor will it be violated, is tribal exclusivity over these licenses,” he said.