Minnesota House votes to legalize sports betting, but obstacles remain

The Minnesota House voted Thursday to legalize sports betting, marking the closest the Legislature has come in years to expanding for-profit gambling in the state.

Minnesotans would be able to place bets at brick-and-mortar locations and online under the House measure, which passed on a bipartisan vote of 70-57, and was crafted with crucial input from the state's 11 tribal nations.

"This is an idea whose time has come," said Rep. Zack Stephenson, DFL-Coon Rapids, the bill's chief sponsor.

But what began as an optimistic bipartisan push has lost steam over the legislative session. Key differences remain in proposals from the House and Senate, which has yet to hold a hearing this year on its bill. With less than two weeks before legislators head home for the summer, it's unclear whether the two chambers will come to an agreement and make 2022 the year that Minnesotans get to legally bet on sports.

The House and Senate bills both would legalize in-person sports betting at tribal casinos and online gaming through vendors that the tribes oversee. The Senate proposal also would allow in-person betting at racetracks.

Senate Majority Leader Jeremy Miller, R-Winona, told reporters at the Capitol Tuesday that sports betting "is still a work in progress." But he said there's not Senate support for the House version of the bill.

"If the stakeholders can come together and try to find some common ground where there are opportunities available at the tribal casinos as well as the tracks, and perhaps if there's something we can do to help benefit our charities, I think agreement could still get done this session," Miller said. "But we're running out of time for that to happen."

Federal law largely prohibited commercial sports betting until the U.S. Supreme Court ruled the ban unconstitutional in 2018. Sports betting is legal in more than 30 states — including all of Minnesota's neighbors — and Washington, D.C.

Proponents say that it's time for Minnesota to benefit from the tax revenue that the sports betting market generates. According to the American Gaming Association (AGA), Americans set a commercial sports betting record in 2021 of more than $57 billion,

What's more, Stephenson said, Minnesota already has "a robust black market."

"What this bill is about is creating a legal marketplace that will displace that black market, and in doing so provide consumer protection, ensure the integrity of the game and limit money laundering and other illicit activity," he said.

The House bill would direct taxes from mobile sports betting profits to regulation, addressing problem gambling, funding youth sports and other programming. The Senate proposal would direct tax revenue into the state's general fund, and set aside some tax revenue for addressing problem gambling.

But sports betting opponents say the costs outweigh the benefits.

In a March letter to Gov. Tim Walz and legislators, faith leaders with the Joint Religious Legislative Coalition outlined concerns related to addiction and the effects of problem gambling on people living in poverty. They also called for changes to existing laws, including raising Minnesota's legal gambling age from 18 to 21 and expanding support for problem gamblers.

"We strongly oppose any consideration of gambling expansion and call upon you to refrain from any discussion of additional gambling until our state addresses the needs under our current laws," the letter said.

The House approved bill amendments Thursday that raised the number of hours of counseling the state will provide to impulsive gamblers and their families; limit advertisements for mobile sports betting; and put safeguards in place including prohibiting most smartphone push notifications for sports betting apps.

Still, several legislators raised concerns about legalizing sports betting, from lost revenue for existing gambling operations to the ramifications for people dealing with gambling addiction.

"I'm all for voting for more money to address some of the gambling problems," said Rep. Glenn Gruenhagen, R-Glencoe. "But expanding gambling is not a way to address the problem."