Why legalizing sports betting (still) faces such long odds at the Legislature this year

Legal sports gambling may be coming to Minnesota. But it does not appear to be in much of a rush.
Consider the Senate bill that could partially conjure sports books in Minnesota narrowly slipped out of its original questionnaire Thursday (and faces an uncertain response during its next stop). The majority leader of the Senate is not keen on the idea. The nation’s 11 Native American tribes are opposed. Anti-gambling and many religious organizations are opposed. And, oh yeah, it doesn’t increase much money.
There is also this: the House bill on the exact same topic has not been set for a hearing, lacks support in DFL leadership, and faces many of the same obligations as the Senate bill.
Other than that, it’s a sure thing.
Introduced by Senate Taxes Committee Chair Roger Chamberlain, R-Lino Lakes, the Senate’s sports betting bill, SF 1894, does have sponsorship from the Republican and DFL senators. Plus it created its first official look before Chamberlain’s own committee Thursday. “That is a business, it’s a profession, it’s 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 a lot of men and women who gamble illegally or through abroad mobile or online sites. Chamberlain believes by legalizing and controlling it, the state might bring to the surface what is currently underground.
But sports betting gambling is a low profit company for casinos; much of what is wagered is returned to players as winnings, so the part that could be subject to state taxation,”the grip,” is comparatively modest. Chamberlain’s bill would tax that amount — the sum of all wagers minus winnings — in 6.75 percent.
State Sen. Roger Chamberlain
MinnPost photograph by Peter Callaghan
State Sen. Roger Chamberlain
“Many nations think it’s a money-maker for them also it might be,” Chamberlain said. “But we are not in this to raise a great deal of revenue. We would like people to take part in the business and have some fun doing it.” Race and casinos tracks could benefit by using sports gambling as a way to attract more people in their casinos,” he said.
The bill claims that if the nation’s tribes wish to provide sports betting, they would have to request a new compact with the state, something required by national law. The country is obligated to deal in good faith and that includes agreeing to any form of gambling already permitted off reservation.
But the executive director of the Minnesota Indian Gaming Association, John McCarthy, said Thursday that the tribes have lots of concerns about the House and Senate bills, also are in no hurry to add sports betting to their surgeries.
McCarthy said the tribes have invested billions of dollars in gambling centers and use them to raise money to cover”services, schools, schools, home, nutrition plans, wastewater treatment centers, law enforcement and emergency services, and other solutions.”
“Because these operations are crucial to the ability of tribal governments to meet the needs of the own people, MIGA has had a longstanding position opposing the growth of off-reservation gaming in Minnesota,” McCarthy said. The mobile facets of the bill, he explained, would”create the most significant expansion of gambling in Minnesota in more than a quarter-century, and consequently MIGA must respectfully oppose SF1894.”
He said that the tribes were especially concerned about mobile gambling and how it might lead to much more online gambling,”which signifies a much more significant danger to all sorts of bricks-and-mortar facilities that currently offer gaming: Japanese casinos, race tracks, lottery outlets, and pubs together with charitable gambling.”
Additionally 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 financial 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 ultimate costs this generates for the nation,” Krisnik stated, mentioning social expenses of gambling.
Jake Grassel, the executive director of Citizens Against Gambling Expansion, said the bill was a bad deal for the nation. “The arguments in favor of legalizing sports gambling may appear meritorious at first blush — which is, bringing an unregulated form of gambling out of the shadows,” Grassel said. “Upon further consideration and reflection, the costs are too high and the benefits are too small.”
A way to’start conversations with the tribes’
The Senate bill ultimately passed the Taxes Committee with five yes votesno votes and one”pass” Two other members were absent. It now goes to the Senate Government Operations Committee.
After the taxation committee vote, Chamberlain said he believes this a way to begin conversations with the tribes. Even if the bill passes, it will not take effect until September of 2020. And compacts would have to be negotiated to clear the way for on-reservation sports gambling.
“We’re hopeful that they’ll come on board,” Chamberlain said of the tribes. “Their business model won’t last forever. Young folks do not visit casinos. I go to them occasionally with my spouse and others and often I am the youngest one there and I’m in my mid-50s. We believe it is a business enhancer.
“I know their caution but we are right there with them and when they make more comfortable and more people know about it, I am convinced we’ll move,” he said.
Later in the afternoon, Senate Majority Leader Paul Gazelka stated the GOP caucus hasn’t met to talk about the issue and he is not in a rush. He explained the mobile 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’m gonna inquire of that invoice,” Gazelka said. “It’s come forward around the nation and we are gonna have to manage it like any other issue. Nonetheless, it is not a partisan issue.”
Some thorny legal questions All of this became possible when the U.S. Supreme Court ruled last spring that Congress had exceeded its authority when it declared that sports betting was prohibited (except in Nevada, where it was operating at the time). New Jersey had sued to clear the way for sports novels at its struggling Atlantic City casinos.
The decision quickly led countries across the country contemplating whether to legalize and regulate sports gambling. Eight already have, and surveys suggest legalizing sports betting has broad popular support.
The issue for the country’s gaming tribes is whether they would make enough from the new gaming choice to compensate for the potentially massive expansion of it off-reservation. There’s no obvious response to if tribes can do much with cellular gambling, because the federal Indian Gaming Regulatory Act that created the economic boost of casino gaming allows gambling only on bookings. Though some states have announced that having the computer servers which process bets on reservations is sufficient to obey the law, the problem has not yet been litigated.
The House and Senate bills also raise a thorny political and legal issue since they apply state taxes to tribal gaming, something the federal Indian Gaming Regulatory Commission has ruled is not allowed. While tribes in different nations have agreed to share gaming revenue with states, it has come with valuable concession — for example tribal exclusivity over gambling.
While the House bill gives the tribes a monopoly for the time being, the Senate version cuts the state’s two horse racing tracks in on the activity. A 2018 evaluation of the issue for the Minnesota Racing Commission calls sports betting a”momentous threat” to racing, but notes that each of the states but one which have legalized sports betting have allowed it to be offered at race tracks. As reported by the commission, the Thoroughbred Idea Foundation has reasoned that”he obvious way of minimizing the possible negative impacts of legalized sports betting on the racing market is to allow sports gambling at racetracks and to direct internet revenues to the support of breeding and racing in the state. ”
The Senate bill allows a kind of cellular betting but necessitates the use of geofencing to assure the bettor is within state boundaries and requires them to get an account that has been produced in person in the casino or race track. It also generates a Minnesota Sports Wagering Commission, which would make rules including what types of bets will be permitted and control the games.

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