Sports betting idles on Minnesota sidelines as football season kicks off

Minnesota Vikings fans know the routine: Wait until next year.

Lately, that end-of-football-season lament has also applied to legalized sports betting. The DFL-controlled Legislature and Gov. Tim Walz approved a long list of watershed changes to state law in the 2023 session, but they didn't make it legal to bet on sports in Minnesota.

Supporters who sat on the symbolic sidelines are ready for 2024 with the legislative equivalent of "Put me in, coach."

Sen. Matt Klein, DFL-Mendota Heights, said with Democrats still in charge in 2024, it makes sense to get it done. "If we don't legalize this now when we can get exclusive licenses for the tribes, it will be legalized some time," he said. "The moment is now."

His late-session bill last session gave each of the state's 11 American Indian tribes the exclusive right to partner with one mobile sports betting platform such as FanDuel or DraftKings.

Online betting is the main game in sports gambling, though, and supporters here envision mobile betting to be legal statewide — meaning Vikings fans and anyone else can bet on their phones from just about anywhere. Sports betting is legal now to varying degrees in more than 30 states, including in Minnesota's four bordering neighbors. Mobile and in-person betting is legal in Iowa, while Wisconsin and the Dakotas have legalized the activity only on tribal grounds.

The tension in Minnesota over legalization comes from how to help the state's two horse-racing tracks, which say they deserve a share of the expanded betting action or their operations will be at risk.

Both Canterbury Park in Shakopee and Running Aces Casino in Columbus already allow sports betting on horses and say they're equipped to take more bets. Running Aces CEO Taro Ito said a wager on horse racing is the same as a wager on a football game. "We're dealing with the exact same vendors, the exact same tote machines," he said, referring to the equipment used to calculate odds and winnings and place bets.

Klein said expanding gambling at the tracks is a "non-starter with the tribes," which have exclusive casino gambling rights in Minnesota and strong support from the DFL majority.

But the senator said he thinks they were close last year with a deal to help the two tracks. His bill included direct payments to the tracks, giving them a portion of sports gambling tax revenues through an economic development fund capped at $20 million. After the initial infusion, the plan would have the tracks split $3 million annually.

Ito called the Klein's payments little crumbs. "What they're offering is like an allowance," Ito said. "It's insulting. It really is."

Track support is crucial to passage and to earning GOP votes. While DFLers were able to pass many bills last session without Republicans, gambling will require some GOP votes. The DFL has a one-vote margin in the Senate and not all 34 caucus members will vote for sports betting.

Sen. Scott Dibble, DFL-Minneapolis, is a no vote because he's concerned that the ease of betting increases the likelihood and incidence of gambling addiction. "That is exacerbated by the aggressive marketing by the companies that come in and extract millions of dollars from families and our local economies," Dibble said.

Another no vote is Sen. John Marty, DFL-Roseville, who said he doesn't buy supporters' argument that Minnesotans want sports gambling. He noted that Californians in 2022 overwhelmingly rejected two ballot initiatives that would have legalized sports betting in casinos and on mobile devices.

Sen. Ann Rest, DFL-New Hope, has opposed gambling expansion over the years but said she will support sports betting if the tracks are satisfied. "I can't say that I'm a full-throated supporter but I am going to vote for it," she said, adding that legalization will allow for regulatory oversight. "A few years ago I'd have been a really firm no, but I'm not there anymore."

Ito said legalized sports betting only for the tribes could put the track out of business. "We need to have some parity," he said.

Canterbury Park CEO Randy Sampson said last spring that Klein's proposal was a start. In a statement last week, he was more explicit. "The Legislature should authorize sports betting at both racetracks and tribal casinos, an opinion that has public support," Sampson said. "Experience around the country demonstrates that racetracks with gaming options such as sports betting are able to provide greater benefits to their states' horse industries."

Rep. Zack Stephenson, DFL-Coon Rapids, said he knows the Legislature needs broad buy-in for a bill, but he added, "I think it's very unlikely we'll see sports betting at the tracks. ... Ultimately the tracks are about horse racing. We can accommodate them in other ways. There's going to have to be a lot of conversations."

Sports betting in Minnesota continues to be described as a when-not-if proposition because gamblers can place bets through online offshore accounts.

In Iowa, sports gamblers placed $2.2 billion in bets in the 2023 fiscal year. Of those bets, $2 billion were placed online and $223 million were placed in person at casinos.

Notably, however, the revenue isn't a boon for the state. The tax revenue in Iowa last year was just shy of $13 million. In Minnesota, legislative staff estimated the state's revenue share at $40 million, a number that Klein believes will be higher when it's legal.

Whatever happens here, Marti Paulson is ready as the CEO at Project Turnabout in Granite Falls, one of just a handful of residential gambling treatment facilities in the country.

While Paulson said Project Turnabout doesn't take a position on whether to legalize sports betting, she said problem gambling comes with the highest rate of suicide among addictions. One in five addicted gamblers attempts suicide, she said.

"I worry about young folks, college-age folks and the ease of pushing the button" on a phone and placing bets, Paulson said.

Her message is that treatment at Project Turnabout is free for Minnesotans, funded by unclaimed lottery proceeds and a portion of electronic pulltabs.

"Am I any more concerned with sports betting than anything else? Yes and no," Paulson said. "Many studies say it can lead to addiction faster than anything, but I'm more concerned with people knowing there's treatment for Minnesotans when they need it."

Stephenson, who steered legalizing cannabis through the Legislature in 2023, said they simply ran out of time last session. He pointed out that 2024 is the second half of a two-year cycle, so bills remain active from this year and they're not starting over.

"I'm optimistic," Stephenson said. "Next year is a good year to do this."

And if they don't legalize it, Minnesotans know the drill.