A pair of new Minnesota sports betting bills appear to try to work around the Indian Gaming Regulatory Act (IGRA), similar to what Florida lawmakers and tribes agreed to in 2021. The Florida language is now part of a federal court case that could ultimately determine what mobile sports betting operated by tribes will look like.
HF 2000, brought by Rep. Zach Stephenson, was set for a hearing Wednesday that was postponed due to inclement weather in St. Paul, where up to 20 inches of snow are expected this week. Sen. Matt Klein also filed the companion SF 1949 on Monday.
Stephenson’s 2022 bill, which would have allowed for retail and digital sports betting at a 10% tax rate and given exclusivity to the state’s 11 tribes, passed the House last year. The Senate passed a more inclusive bill that would have allowed for commercial sports betting as well. Neither measure received approval in both chambers.
The 2023 version of Stephenson’s and Klein’s bills still gives the tribes exclusivity, sets a 10% tax rate for bets not taken on tribal lands, sets the legal wagering age at 18, and would allow for retail and digital wagering. The bills would effectively cap the number of digital platforms at 11 — one for each tribe — and tribal compacts with the state to offer wagering would be in effect for 20 years.
A consortium of Minnesota professional sports teams — including the MLB Twins, NBA Timberwolves, the NFL Vikings, and NHL Wild — wrote a letter in support of the bills despite being shut out of having platforms or retail sportsbooks.
Where bets placed, taken an issue
The bills also include a line that seems to stretch the bounds of IGRA, the 1988 federal law that governs tribal gaming but does not contemplate digital wagering.
In a section titled “wager location,” the bills read, “The incidental routing of a mobile sports wager shall not determine the location or locations in which the wager is initiated, received, or otherwise made.”
In Florida, the Seminole Tribe and the state agreed to a compact which would have required that all bets placed in the state flow through servers on Seminole lands. The compact was approved by the U.S. Department of the Interior and then a pair of parimutuels sued the DOI, saying that the compact is illegal because IGRA only addresses gaming that takes place on tribal lands. As in Florida, the Minnesota bill seeks to massage the location of the bettor (other than to require them to be in the state), which could bring a challenge if the bill passes and compacts are made.
And the letter from tribes supporting sports betting bill in Minnesota pic.twitter.com/S4OrfwjfWY
— Peter Callaghan (@CallaghanPeter) February 21, 2023
In other states where tribal gaming is part of the mix, like Arizona or Connecticut, commercial operators are also allowed to offer wagering. In some cases, tribes have multiple servers, one on tribal lands and one off-reservation. In situations where tribes offer digital wagering and wagers initiated off tribal lands are taxed but those initiated on tribal land are not, operators use two servers in order to track the wagers.
The only state to broadly preserve tribal exclusivity is Washington, where in March 2020 the legislature approved a compacting process that awarded retail-only betting to tribes.
The Minnesota bills have the backing of the Minnesota Indian Gaming Association and would be favorable to the tribes while excluding participation by commercial casinos or professional sports teams. There could be pushback in the Senate, where the 2022 bill would have allowed two horse racetracks to have legal wagering. Last year, MIGA supported Stephenson’s bill but was clearly opposed to any other bill that would infringe on its exclusivity.
Responsible gambling a priority
The bills prioritize responsible gambling. Beyond prohibiting advertising to minors and requiring the curation of a self-exclusion list, the legislation also allows for problem and responsible gambling programs to get a percentage of revenue after certain expenses are deducted, with funds earmarked specifically for the National Council on Problem Gambling and the Commissioner of Human Services.
In the September @MPRnews| @Kare11| @StarTribune Minnesota Poll, far more Minnesotans supported legalized sports betting than opposed it, including similar proportions of Republicans and Democratshttps://t.co/zGBLo9RlNN https://t.co/q2VH8A9EUD pic.twitter.com/zFTcGOhLAj
— Craig Helmstetter (@c_helmstetter) February 22, 2023
According to the text of the bills, the funds must cover up to 60 hours of “intervention services” for impacted individuals or family members. The bills also have some additional unique language, including:
- Deposits must be made at least three hours before a wager is placed.
- Push notifications from a platform are prohibited when the consumer is not engaged in the platform, with the exception of notifications related to fraudulent information.
- Sports betting advertising would be prohibited on private cars, taxis, limos, bus or train stops, taxi stands, and at airports.
