Why legalizing sports betting (still) faces such long odds at the Legislature this year
- T6, 09 / 2019
Legal sports betting may be coming to Minnesota. However, it does not appear to be in much of a rush.
Consider the Senate bill that would partly conjure sports books in Minnesota narrowly slipped from its original committee Thursday (and faces an uncertain reaction during its next stop). The majority leader of the Senate is not keen on the idea. The state’s 11 Native American tribes are opposed. Anti-gambling and many religious organizations tend to be more than And, oh yeah, it doesn’t increase much money.
There’s also this: the House bill on the same topic hasn’t been set for a hearing, lacks support in DFL leadership, and faces many of the very same obligations as the Senate bill.
Aside from that, it’s a certain thing.
Inspired by Senate Taxes Committee Chair Roger Chamberlain, R-Lino Lakes, the Senate’s sports betting bill, SF 1894, does have sponsorship from the Republican and DFL senators. Plus it made its first official appearance before Chamberlain’s own committee Thursday. “This is a company, it is a profession, it’s amusement,” Chamberlain said. “Individuals do make a living off of the… and they also have a great deal of fun”
And although it isn’t legal in Minnesota, there are many men and women who bet illegally or through offshore mobile or online sites. Chamberlain believes by legalizing and controlling it, the state might bring to the surface what is now underground.
But sports gambling is a minimal profit company for casinos; a lot of what’s wagered is returned to players as winnings, which means that could be subject to state taxation,”the hold,” is relatively small. Chamberlain’s bill would tax that amount — the sum of all wagers minus winnings — in 6.75 percent.
State Sen. Roger Chamberlain
MinnPost photograph by Peter Callaghan
State Sen. Roger Chamberlain
“Many nations think it is a money-maker for them also it might be,” Chamberlain said. “But we’re not in this to raise a great deal of revenue. We would like people to share in the company and have some fun doing it.” Casinos and race tracks could benefit by using sports gambling as a means to attract more people in their casinos,” he said.
The bill claims that if the state’s tribes want to offer sports betting, they’d need to request a new compact with the state, something required by national law. The state is obligated to bargain in good faith which includes agreeing to some form of gambling already permitted off reservation.
But the executive director of the Minnesota Indian Gaming Association, John McCarthy, said Thursday that the tribes have many worries about the House and Senate bills, also therefore are in no rush to incorporate sports gambling to their operations.
McCarthy said the tribes have spent billions of dollars in gambling facilities and use them to raise money to pay for”human services, schools, schools, home, nutrition programs, wastewater treatment facilities, law enforcement and emergency services, and other solutions.”
“Because these operations are crucial to the ability of tribal governments to meet the requirements of the own people, MIGA has had a longstanding position opposing the growth of off-reservation gambling in Minnesota,” McCarthy explained. The cellular aspects of the bill, he explained, would”create the most significant expansion of gambling in Minnesota in over a quarter-century, and consequently MIGA must respectfully oppose SF1894.”
He said the tribes were particularly concerned about mobile gaming and how it could lead to much more online gaming,”which represents an even more significant threat to all sorts of bricks-and-mortar facilities which now provide gambling: tribal casinos, race tracks, lottery outlets, and bars together with charitable gambling”
Also opposed was an anti-gambling expansion group and a religious social justice firm. Ann Krisnik, executive director of the Joint Religious Legislative Coalition, mentioned the state fiscal note that stated the revenue impacts of the bill were unknown.
“It is unknown not only in terms of revenue, but it is unknown also concerning the greatest costs this creates for the state,” Krisnik stated, mentioning societal costs of gambling.
Jake Grassel, the executive director of Citizens Against Gambling Expansion, said the bill was a terrible deal for the nation. “The arguments in favor of legalizing sports betting may seem meritorious at first blush — that is, bringing an unregulated form of betting from the shadows,” Grassel said. “Upon further reflection and consideration, the costs are too high and the advantages are too little.”
A way to’start conversations with the tribes’
The Senate bill ultimately passed the Taxes Committee with five votesno votes and a”pass.” Two additional members were also absent. It now belongs to the Senate Government Operations Committee.
Following the taxes committee vote, Chamberlain stated he considers this a way to start conversations with the tribes. Even if the bill passes, it will not take effect until September of 2020. And compacts would have to be negotiated to clear the way for on-reservation sports betting.
“We’re hopeful that they will come on board,” Chamberlain said of the tribes. “Their business model will not continue forever. Young folks do not visit casinos. I go to them occasionally with my partner and other people and frequently I am the youngest one there and I’m in my mid-50s. We believe it is a business enhancer.
“I know their care but we are right there with them and when they get more comfortable and more individuals understand about it, I’m convinced we’ll proceed,” he said.
Later in the afternoon, Senate Majority Leader Paul Gazelka stated the GOP caucus has not met to talk about the issue and that he isn’t in a rush. He said the mobile gambling aspects are of special concerns to him and he is personally opposed.
“I really do know that it requires more time and that is the 1 thing I am gonna inquire of this invoice,” Gazelka said. “It’s come ahead around the country and we’re gonna need to manage it like any other issue. Nonetheless, it is not a partisan issue.”
Some thorny questions All of this became possible when the U.S. Supreme Court ruled last spring that Congress had exceeded its power when it announced that sports betting was illegal (except in Nevada, where it was operating at the time). New Jersey had sued to clear the way for sports books at its fighting Atlantic City casinos.
The decision quickly led states throughout the nation contemplating whether to legalize and regulate sports betting. Eight already have, and surveys indicate legalizing sports betting has wide popular support.
The problem for the country’s gaming tribes is if they’d make enough from the new gaming choice to compensate for the potentially gigantic growth of this off-reservation. There’s also no obvious response to if tribes could do much with mobile gaming, since the federal Indian Gaming Regulatory Act that created the economic boost of casino gaming allows betting only on reservations. Though some countries have declared that using the computer servers that procedure bets on reservations is sufficient to obey the law, the problem has yet to be litigated.
The House and Senate bills also increase a thorny political and legal issue because they apply state taxation to tribal gaming, something the federal Indian Gaming Regulatory Commission has ruled is not permitted. While tribes in other nations have agreed to discuss gambling revenue with countries, it’s come with invaluable concession — for example tribal exclusivity over betting.
Even though the House bill gives the tribes a monopoly for the time being, the Senate version cuts the state’s two horse racing tracks in on the activity. A 2018 evaluation of the issue for the Minnesota Racing Commission calls sports betting a”momentous threat” to racing, but notes that each of the countries but one which have legalized sports gambling have let it be offered at race tracks. As reported by the commission, the Thoroughbred Idea Foundation has concluded that”he obvious way of minimizing the possible negative effects of legalized sports gambling on the racing industry would be to allow sports betting at racetracks and also to direct net revenues to the aid of breeding and racing in the state. ”
The Senate bill enables a type of mobile betting but requires using geofencing to ensure the bettor is within state boundaries and needs them to have an account that’s been produced in person at the casino or race track. It also generates a Minnesota Sports Wagering Commission, which would make rules such as what types of bets will be allowed and regulate the games.
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