Just because Minnesota hasn’t legalized sports betting, it doesn’t mean Minnesotans aren’t betting on sports.
That is according to Democratic–Farmer–Labor Rep. Zack Stephenson, the chief sponsor of legislation that would legalize sports betting in Minnesota, which remains one of the shrinking number of U.S. states without authorized bookmakers.
“People are wagering on sports every day in Minnesota right now,” Stephenson told a legislative committee on Thursday. “They're just doing it illegally. It's very easy to place an illegal bet on sports through offshore websites and other mechanisms.”
One of many
Stephenson’s bill, H.F. 2000, would try to change that fact by authorizing in-person and online sports betting in Minnesota. Mobile licenses would be reserved for the state’s 11 federally recognized Native American tribes, who could partner with operators such as DraftKings or FanDuel.
H.F. 2000 was discussed on Thursday by the Minnesota House of Representatives Human Services Finance Committee. It was then referred on to the House's State and Local Government Finance and Policy after it was amended.
Unsurprisingly, it looks to have the support of Minnesota’s gaming tribes.
"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 sportsbettors [sic] and a competitive market that is important to our state's professional sports teams and market partners," said Andy Platto, executive director of the Minnesota Indian Gaming Association, in a Feb. 21 letter to the committee.
However, several bills are circulating in the Minnesota legislature at the moment that have to do with legalizing sports betting, and there is no guarantee any of them ever become law. H.F. 2000 was introduced a year ago, in February 2023, and was revived earlier this month before being referred to committee.
It’s also unclear if lawmakers and various industry and tribal stakeholders will be able to resolve the differences that prevented Minnesota from legalizing sports betting in the past, such as who should offer wagering and where.
"Any time the state changes the gaming landscape, tribes must carefully consider whether such proposals strengthen or, in fact, threaten tribal sovereignty and self-determination," Platto wrote to the committee.
A PG approach
At any rate, Minnesota is one of just 12 states without legal sports betting and it is surrounded by jurisdictions that have authorized event wagering, including Canada to the north and Iowa to the south. While no sports betting bill has passed, it has not stopped lawmakers from trying to pass them. The governor also stands ready to sign a bill into law.
Stephenson told the committee on Thursday that the main reason for its stop there was to address problem gambling. H.F. 2000 contains a 10% tax rate for mobile sports betting revenue. The bill would require that money to go to a special revenue account and then would take half of the funds not used to pay for oversight to combat problem gambling.
The exact destination of the problem gambling funding was the subject of an amendment to the bill that the committee approved. It would devote a third to treatment, a third to “downstream impacts,” and a third to education and prevention, the last of which Stephenson said would see a “substantial increase” from the legislation.
Stephenson noted that there is plenty of “official” advertising by online sports betting companies but also a “gambling tint” to sports talk radio and broadcasts as well, which can also be a powerful pull.
“And so it's time to devote substantial resources to education and awareness around problem gaming,” the lawmaker told the committee.
Susan Sheridan Tucker, the executive director of the Minnesota Alliance on Problem Gambling (MNAPG), told the committee that there are already 250,000 residents struggling with a gambling addiction, including around 6,000 high school students.
"Yet we have no prevention materials in the schools right now," she said. "And so I'm just asking you as policymakers that you see this addiction, you understand its impact on families, communities, the individual, and that additional funding is absolutely necessary, because we have a lot of work to do."
More than one problem
But the concerns voiced during the committee meeting went beyond funding for problem gambling programs, such as the possible risks of "normalizing" event wagering.
"It's going to create fights, it's going to create shootings, and it's going to be things that we ultimately will be dealing with in a different way down the road," Republican Rep. Dave Baker said of legalizing sports betting. "And other things are doing it now, it's not just this. It's just adding more components to lifestyles and making it easy for people to get access to it. And that's what your bill is ultimately going to do."
Baker asked why it was so important to add a mobile component to sports betting versus confining it to a physical location like a casino. Stephenson responded that Minnesotans are already wagering on their phones.
"This bill, I don't believe, makes it any easier to do," Stephenson said. "There's already rampant advertising to do it across Minnesota from national sources. What this bill does is create a regulatory framework around that activity."
That framework would put protections in place for consumers that offshore sites lack, Stephenson said, such as a ban on push notifications and a mandatory three-hour delay between depositing with an operator and wagering with that money.
But Baker warned lawmakers would create "more addictive behaviors" with their proposed rules.
"Just because it's happening doesn't mean it's right," said Baker. "I guess that's my point."
