Minnesota Committee Advances Sports Betting Bill, But Hope May Be Dwindling

• The Minnesota House Taxes Committee advanced a sports betting bill today
• Rep. Zach Stephenson’s sports betting bill has been re-referred to the Ways and Means Committee
• Several committee members believe the bill stands no chance in the Senate

False hope or positive movement in Minnesota?

The Minnesota House of Representatives Taxes Committee approved Rep. Zack Stephenson’s (DFL-Coon Rapids) sports betting bill, HF 2000, by a 12-9 vote, re-referring the bill to the House Ways and Means Committee.

While it’s a positive move forward for the sports betting bill, several committee members threw cold water on its approval and expressed doubt that the legislation has any chance of approval in the Minnesota Senate.

Proposed Tax Cuts for Charitable Gaming

Stephenson’s sports betting bill, HF 2000, gives Minnesota tribes exclusive control over retail and online sports betting, while also legalizing daily fantasy sports in the state  The legislation sets the sports betting tax rate at 20% and the DFS tax rate at 10%.

The bill has been re-referred to the House of Representatives Ways and Means Committee.

Several tax cuts are proposed in the bill, Stephenson noted during today’s committee meeting, the most impactful being for Minnesota’s charitable gaming organizations. The new law would lead to a $40 million tax cut for the organizations by the third year of sports betting operation, he said.

Rachel Jenner, Executive Director of Allied Charities of Minnesota, applauded the tax cuts included in the bill. Just five years ago the charities paid $88 million in taxes, but are now finding themselves with a nearly $200 million tax bill.

“Our ability to serve our communities has been severely hampered,” she said.

Several amendments to the bill were floated by Republican committee members to either strip sports betting out of any charitable gaming tax cuts or increase funding to the organizations, but none were approved.

Rep. Greg Davids (R-26B) said he supports charitable gaming, but does not stand for legalized sports betting in Minnesota. Having tax cuts tied to sports betting only hurts charitable gaming in the state, he said, as he believes the bill stands no change of legalization this year.

“We support the charities, we want the charities to have their tax cuts, but it’s somewhat unfortunate that they’ll go another year because this bill will not pass. It may pass the House, but it will not pass the Senate.

Rep. Bjorn Olson (R-22A) said it’s sad that charitable gaming organizations will not see tax relief this year as the bill stands no chance of approval.

“With the nonsense going on in the Senate, which borders on criminal, we probably won’t see this bill pass this year,” Olson said.

Despite the pessimism for the bill’s chances in the Senate, Stephenson said sine die isn’t until May 20. More work needs to be done, he said, but he’ll continue to work towards a solution to ensure the bill has a chance.

The House of Representatives Ways and Means Committee next meets on Wednesday, May 1, at 9 a.m.

HF 2000 Sports Betting Details

Stephenson’s bill provides exclusive control of retail and online sports betting to the following 11 state tribes:

• 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

Minnesota professional sports franchises also support this bill.

His bill specifically prohibits historical horse racing (HHR) machines in Minnesota’s state racetracks. Earlier this month, the Minnesota Racing Commission voted to allow 500 HHR machines in the state’s two racetracks, Canterbury Park and Running Aces.

Stephenson has also proposed a standalone bill, HF 5274, that would officially ban HHR in the state.