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Minnesota House punts sports betting legalization to Friday

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The Minnesota House met on Wednesday, 15 May for over 11 hours but did not discuss the legal sports betting legislation. The bill will be re-introduced to the Minnesota house on Friday, 17 May.

According to two sources, Zack Stephenson’s bill is not likely to be passed. Stephenson merged the betting bill with a ban on historical horse race (HHR). The bill will now be HF 5274.

Minnesota’s regular session 2024 is scheduled to end on Monday, May 20, 2019. Legislators are running marathon sessions in order to pass bills on paid leave, taxes, and other important issues. The house session on Wednesday ended at midnight. The next meeting will be held at 11am on Friday local time.

Bill: Current rate of 20%, for 21+ and tribal exclusivity

Stephenson, a member of the state’s Democratic-Farmer-Labor (DFL) party, has been carrying legal betting for four sessions. The bill hasn’t been presented to the Governor in part due to disagreements between the tribes of the state and the tracks. In its current form, the bill gives the tribes the monopoly over digital betting. The platforms would be tied to the tribal casinos.

Stephenson’s DFL has the majority of the DFLers in the House, but it needs bipartisan support because the DFLers do not agree on the entire bill. It may still not make it through the Senate, even if the bill passes the House. Nicole Mitchell, a DFL senator who was suspended for being arrested and charged in April by the State House. The body is now in a deadlock, with 33 DFLers versus 33 Republicans.

It sets the tax rate at 20% on gross gaming revenues and raises betting to 21. The bill dedicates 50% of the state’s tax revenues to initiatives aimed at reducing problem gambling and promoting responsible gaming. It would legalise and tax daily fantasy sports at 10%.

The HHR, tracks, and tribes make it complicated

Stephenson was required to negotiate a deal with the charitable gaming group of the state and the tribal nations in order for the bill to get this far. In the end, $40m in revenue will be distributed to charitable gaming groups who have agreed not to alter their machines’ pull tabs.

It is still unclear how the two state horsetracks will get involved. The tracks have been cut off from sports betting, and the $625,000 per annum will go to the Racing Commission’s Economic Development Fund. Tracks want more but tribes refuse to sign a bill which would allow them to bet.

Minnesota’s race commission approved HHR machines on the tracks earlier this year. Stephenson filed almost instantly a bill banning those machines because they are too similar to traditional slots.

Minnesota has had a long history of legal wagering, but combining that with HHR issues makes the issue even more fraught.

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