Anthony Edwards reaches for a dunk. Photo by Christian Petersen/Getty Images.
A sports betting bill backed by major gambling companies failed to pass a key committee Thursday, dealing a blow to advocates who were optimistic about the odds of legalizing sports betting this year.
The Senate State and Local Government committee failed to advance a bill authored by Sen. Matt Klein, DFL-Mendota Heights, despite support of Native American tribes in Minnesota, horse tracks, charitable gambling organizations and the biggest mobile sports betting companies in the country.
Klein’s bill would be a financial boon for all of them.
A similar bill sponsored by Klein nearly passed the Legislature last year but stalled out due to infighting among the gambling organizations that wanted a slice of the proceeds.
The committee also heard a competing, more restrictive sports betting legalization bill authored by Sen. John Marty, DFL-Roseville. Marty’s plan was ultimately laid over, meaning it could be inserted into a larger bill or passed by the committee at a later date. (Klein’s bill could also find a way back into the legislative process.)
More than three dozen states and Washington D.C. have legalized sports betting since a 2018 Supreme Court decision opened the door to sports gambling outside of Nevada. But Minnesota sports betting advocates have so far failed to get a deal across the finish line, stymied by bipartisan opposition and infighting among the organizations that want a cut of the profits.
Studies show that states that legalized sports betting in recent years have seen a plethora of negative impacts, including lower credit scores, increased bankruptcies and more incidents of domestic violence.
Two plans for sports gambling
Klein touted that tribes, race tracks and charitable gambling organizations back his bill, which is a feat of legislative compromise. All would get a slice of the tax revenue generated by sports gambling; the state would retain around 20% of the proceeds, the majority of which would be distributed by Minnesota Tourism to spend on financial incentives for sporting events to come to Minnesota.
Marty’s plan, however, would keep all of the tax revenue with the state, divided between the Department of Human Services for problem gambling treatment and awareness; the Department of Education for addiction prevention and mental health services in schools; and the state general fund.
Klein’s bill would give licensing rights to tribes, which could partner with existing mobile sports betting platforms to run the operations. The bill would also create a helpline to assist people with gambling disorders, and allow gamblers to set self-imposed limits.
If enacted, it would be “the safest sports wagering bill in the nation,” Klein said, citing prohibitions on so-called push notifications that alert potential gamblers to opportunities to wager via their phone; advertising on college campuses and schools; and in-game bets on college sports. (With the help of technological advances, gamblers can now bet throughout a game, rather than just on the final results.)
Marty argued that Klein’s bill only includes limits that sportsbooks approve — meaning they won’t meaningfully cut into profits.
Marty, who opposes the expansion of sports betting, said he isn’t necessarily trying to pass his bill into law; rather, he would like to see some of its provisions incorporated into the industry-approved Klein plan.
Marty’s plan would ban gambling advertisements on public property, including all of Minnesota’s major sports stadiums; require sportsbooks to submit bids to the state for licensure, resulting in higher tax rates; and ban all wagering on college sports.
“If at some point you decide you want to move forward on sports betting, I would argue we should do it with strong regulations — and yes, it won’t be as profitable as it could be — but it would be strong regulations to address the growth in problems that we are sure to see with this,” Marty said.
The committee members voted 6-6 to advance Klein’s bill; without a majority of committee members in support, the motion failed.
The votes did not fall along party lines, and critics cited a range of reasons for opposition to the bill. Sen. Erin Maye Quade, DFL-Apple Valley, said she is concerned about the predatory practices of the major companies that run the sportsbooks. Sen. Steve Drazkowski, R-Wabasha, criticized the high costs associated with entering the gambling market. Both voted against the bill.