Minnesota sports betting hopes may be blocked by familiar foes

As North Carolina gears up for its online sports betting launch on March 11, Minnesota sports betting hopefuls watch from afar as legalization efforts again face a familiar roadblock.

While two Minnesota sports betting bills have been moving through the legislature, one of the primary obstacles for those pieces to reach the finish line still remains and will likely block sports betting from becoming a reality this year.

The issue is due a fundamental disagreement between the Minnesota racetracks and tribes on which side should control the new form of gaming. This standoff has been the one of the key reasons momentum around online sports betting has faltered in recent years.

Which group should control sports betting?

At the heart of the issue, the Minnesota Tribes believe they should have sports betting exclusivity in the state, as do Minnesota professional sports teams. Meanwhile, racetracks maintain they should also be allowed to hold sports betting licenses.

Two bills, SF 3803 (Minnesota Sports Betting Act 2.0) and HF 2000, both of which would legalize Minnesota in-person and online sports betting, have been inching their way to their respective chamber floors since their introduction this month. Despite their progress through a number of committees, bill authors have failed to find a compromise that will ultimately lead to an approval.

Rep. Zack Stephenson's (DFL-Coon Rapids) sports betting bill, HF 2000, carried over from last year's session and was approved by the House Human Services Committee last week. It has been moved on to the State and Local Government Finance and Policy committee.

The bill gives Minnesota tribes exclusive control over retail and online sports betting in the state. This suggestion has led to opposition from state racetracks. Representatives for Minnesota horse tracks have cited the potential damage that tribal-controlled sports betting would do to the horse racing industry in Minnesota.

Stephenson's bill, which is unsurprisingly supported by Minnesota tribes, would give 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.

"Were HF2000, as currently drafted, to become law, MIGA tribes believe the resulting mobile and retail markets operated by Minnesota's Tribal Nations would not only support tribes, but would also provide a well-regulated and accessible market for the state's sports bettors and a competitive market that is important to our state's professional sports teams and market partners," Andy Platto, Executive Director of the Minnesota Indian Gaming Association, wrote in a letter to the House committee.

Tracks want what they feel is fair treatment

Minnesota racetrack representatives have continued to plead for fair treatment with legalized sports betting. Track reps have long said they want to be able to offer sports betting at their own facilities and to hold their own sports betting licenses that are not beholden to tribal partnerships.

During a public sports betting hearing last year, Tracie Wilson, CFO of Running Aces, said it was "essential that the state's two race tracks be treated fairly with respect to any sports betting expansion."

"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.

A second bill moving through the Senate would cut racetracks into sports betting, but may not provide enough for the tracks to gain their full support.

Sen. Jeremy Miller's (R-Winona) bill, the Minnesota Sports Betting Act 2.0, was introduced on Feb. 15 and referred to the Senate State and Local Government and Veterans Committee.

The bill calls for retail and online sports betting licensing opportunities to Minnesota's 11 tribal nations, but also allows state racetracks and/or professional sports stadiums to operate retail sports betting on their premises.

The two state racetracks and professional sports stadiums cannot hold licenses of their own, but would be able to partner with a tribe to offer retail sports betting at their facilities.

Racetrack representatives have yet to fully support the bill.