Lawmakers from at least three states have filed sports betting legislation ahead of their 2019 sessions. A Minnesota state senator could well make it four.
According to the MinnPost, Senate Taxes Committee chairman Roger Chamberlain (R-District 38) said he has a rough draft of a sports betting bill that he’ll share around the state house in the hopes of crafting passable legislation.
“It’s touching a lot of folks, and when you’ve got a lot of money involved, then people get a little concerned,” Chamberlain said. “But I think there’s popular support for it. Admittedly, this is not at the top of the list for priorities … but it is certainly something that can get done.”
Chamberlain is the second lawmaker in a week to promise sports betting legislation in a state that made no moves to legalize in 2018. Late last week, Fox 5 reported that Virginia Senator Chapman Petersen (D-District 34) was planning to file a sports betting bill. It would be the second pre-filed bill in Virginia, after Representative Mark Sickles (D-District 43) filed a bill that calls for a 15 percent tax rate on gross revenue and a $250,000 application fee.
Numbers and details
In Minnesota, Chamberlain and his co-sponsors will have to determine key issues, including tax rate, what the governing body will be, application fees, how to manage mobile sports betting, and to what extent if any they want to oblige certain professional sports leagues’ requests for a “royalty” or mandates regarding sportsbook data. Each of these issues is critical in its own way, though states that have legalized sports betting are all over the map on several of them.
As an example, the Nevada has the lowest tax rate in the nation at 6.75 percent of adjusted gross revenue, while Rhode Island’s is the highest at 51 percent within a revenue sharing structure. In some states, a gaming commission regulates sports betting, while in others, it’s the state lottery. Application fees range from $10,000 to $10 million (Pennsylvania), in some states, mobile sports betting is allowed within state borders and in others only in casinos, and no state has mandated a fee benefiting professional sports leagues.
During the 2018 session, a draft bill that included a one percent tax on handle was reportedly circulated in Minnesota. But like the “integrity fee” that the professional sports leagues proposed in early 2018, that would work out to roughly 20 percent of sportsbooks’ profits, which is an unmanageable number from an industry perspective.
Setting expectations
While Chamberlain wants to move quickly – he told the MinnPost that he thought a bill could be passed by the end of the 2019 session, which begins Jan. 8 – other states have shown that legalizing sports betting is not a quick endeavor. And beyond the fact that it has no commercial casinos (though there are two card rooms in the state), there are 18 Indian casinos run by 11 tribes that have 22 pacts with the state, according to the Minnesota Department of Public Safety.
Michigan and Connecticut lawmakers could speak to the challenges of managing their pacts with tribal interests. As it stands, sports betting is not addressed, or specifically contemplated, under the pacts. The Indian Gaming Regulatory Act defines Class III Gaming as “common casino games such as video games of chance (slot machines and video poker) roulette, craps, baccarat, and banking card games such as blackjack.”
According to the Minnesota Gaming Association, tribal gaming in Minnesota is tax exempt, so the tribes do not share a portion of their revenue with the state. The situation is similar in Mississippi, where the state gaming commission does not oversee tribal gaming. Because of this, the question in Minnesota will ultimately be political. While the tribes don’t pay the state for gaming, the pacts would likely need to be revisited to allow sports betting.
