Last week, the path towards legalized sports betting in Minnesota became more complex after the state racing committee approved historical horse races and several gambling bills.
The state committees have taken a long time to approve the online and mobile legislation that Senator Matt Klein, along with Representative Zack Stephenson, introduced at the beginning of this session. Stephenson helped to broker a long-standing agreement between charitable gaming and the Minnesota tribes to remove a major barrier for legal sports betting.
Then, on 1 April 2011, the Minnesota horse racing commission approved historical horse races at race tracks. Others say it’s illegal and a violation to the exclusivity contract between the tribes, the state. In most jurisdictions, the machines are used as games of luck. They look like slot machines. The tribes also have exclusive rights to this area.
The decision, whatever the circumstances, has caused tempers to flare. Stephenson stated in an April 3rd informational hearing in front of the House Commerce, Finance and Policy Committee, which he chairs: “I want to make it clear that in no universe would a bill be left with historic horse racing.
Consider new bills
The day following the hearing, John Marty introduced a bill which would impose a tax of 40% on all legal sports wagering. The bill also bans the use of HHR and in-game betting and provides significant funding for problem gambling and responsible gaming programmes. Stephenson has added an amendment in his gambling bill, and another bill which expressly bans HHR.
Today (8 April) as well as tomorrow, House and Senate committees will be holding hearings to discuss the new legislation.
In response to the Racing Commission, the Minnesota Indian Gaming Association has used the strongest words yet. The MIGA is a group that monitors the betting bill’s progress and was present during the entire session.
According to The Minn Post, MIGA’s executive director Andy Platto stated in a Tuesday statement that slot machines located off tribal land are still illegal. After decades of discussion at the Capitol on this topic, the Racing Commission has decided to usurp the legislative authority by unilaterally approving slot machines in the state’s race tracks. “We will oppose the Commission’s decisions and consider all options available.”
Exclusiveness and sovereignty are at stake for tribes
MIGA is clear in its commitment to continue lobbying against HHR, and any legislation that could threaten the exclusivity of HHR. MIGA may also pursue legal action, if needed.
How the horsetracks in Minnesota fit into the equation has been one of the main sticking points when it comes to passing legal sports gambling in Minnesota in the past four years. They want to maintain their exclusivity, and by extension, their sovereignty.
Minnesota’s racing industry is in a decline. Horse racing is supported in some states by sports betting. These include Illinois, Louisiana, and Massachusetts. In these states, it’s legal for tracks to offer digital and on-site sports betting.
Study shows HHR could bring in $5.9 million for purses
There is, however, no precedent where a state that has gaming tribes who have a majority of the market shares would then cede their provision to racetracks. To try and support the tracks, legislators have proposed ways of compensating them. Stephenson’s bill would allocate $625,000 to purses. Commerce committee member Ann Neu Brindley referred to them as “pennies”.
Minneapolis Star-Tribune reports that an HHR study, commissioned by tracks, showed that the purses would be $5.9m. The money could also go to fund the retired racehorse programme and the breeders’ fund of the state. It was even possible to cover the regulatory costs.
The situation in Minnesota has just gotten more intense and difficult to resolve.
