Legal sports betting may be coming to Minnesota. But it does not appear to be in much of a rush.
Consider that the Senate bill that would partially legalize sports books in Minnesota narrowly slipped from its first questionnaire Thursday (and faces an uncertain response at its next stop). The majority leader of the Senate is not keen on the thought. The state’s 11 Native American tribes are opposed. Anti-gambling and many religious organizations tend to be more than And, oh yeah, it will not raise much money.
There’s also this: the House bill on the same topic hasn’t been set for a hearing, lacks support from DFL leadership, and faces many of the very same liabilities as the Senate bill.
Aside from that, it’s a certain thing.
Introduced by Senate Taxes Committee Chair Roger Chamberlain, R-Lino Lakes, the Senate’s sports gambling bill, SF 1894, does have sponsorship from the Republican and DFL senators. And it made its first official look before Chamberlain’s own committee Thursday. «That is a business, it is a profession, it’s amusement,» Chamberlain said. «People do make a living off of this… and they also have a great deal of fun.»
And although it isn’t legal in Minnesota, there are many people who gamble illegally or through abroad mobile or online websites. Chamberlain thinks by legalizing and regulating it, the state might bring to the surface what is currently underground.
But sports gambling is a low profit company for casinos; a lot of what’s wagered is returned to players as winnings, so the part that would be subject to state taxation,»the grip,» is comparatively small. Chamberlain’s bill would tax that amount — the amount of wagers minus winnings — in 6.75 percent.
State Sen. Roger Chamberlain
MinnPost photo by Peter Callaghan
State Sen. Roger Chamberlain
«Many nations think it is a money-maker for them and it may be,» Chamberlain said. «But we’re not in this to increase a great deal of revenue. We would like people to take part in the business and have some fun doing this.» Race and casinos tracks could benefit using sports gambling as a means to bring more people in their casinos, he said.
The bill says that if the state’s tribes wish to provide sports betting, they would need to request a new compact with the state, something demanded by federal law. The state is bound to bargain in good faith and that includes agreeing to some form of gaming already allowed off reservation.
Nevertheless, the executive director of the Minnesota Indian Gaming Association, John McCarthy, said Thursday that the tribes have lots of worries about both the House and Senate bills, also therefore are in no hurry to add sports betting to their surgeries.
McCarthy said the tribes have invested billions of dollars in gaming facilities and utilize them to raise money to cover»human services, schools, clinics, housing, nutrition programs, wastewater treatment centers, law enforcement and emergency services, and other services.»
«Because these operations are crucial to the ability of tribal governments to meet the needs of their own people, MIGA has had a longstanding position opposing the growth of off-reservation gaming in Minnesota,» McCarthy said. The cellular facets of the bill, » he explained, would»make the most significant expansion of gambling in Minnesota in more than the usual quarter-century, and consequently MIGA must respectfully oppose SF1894.»
He said the tribes were especially worried about mobile gaming and how it might lead to much more online gaming,»which signifies a much more significant threat to all types of bricks-and-mortar facilities that now provide gambling: Japanese casinos, race tracks, lottery outlets, and pubs with charitable gambling.»
Also opposed was an anti-gambling expansion set and a religious social justice organization. Ann Krisnik, executive director of the Joint Religious Legislative Coalition, cited the state financial note that said the revenue impacts of the invoice were unknown.
«It is unknown not only concerning revenue, but it is unknown also concerning the ultimate costs this generates for the nation,» Krisnik said, citing social 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 favour of legalizing sports gambling may appear meritorious at first blush — which is, bringing an unregulated form of gambling out of the shadows,» Grassel said. «Upon further consideration and reflection, the prices are too high and the benefits are too small.»
A way to’start conversations with the tribes’
The Senate bill finally passed the Taxes Committee with five yes votes, two no votes and a»pass.» Two additional members were absent. It now belongs to the Senate Government Operations Committee.
After the taxes committee vote, Chamberlain said he considers this a method to start conversations with all 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 gambling.
«We are hopeful that they will come on board,» Chamberlain said of these tribes. «Their business model won’t continue forever. Young people do not visit casinos. I visit them sometimes with my spouse and other people and frequently I’m the youngest one there and I’m within my mid-50s. We believe it is a business enhancer.
«I understand their care but we are right there together and when they get more comfortable and more people know about it, I am convinced we will proceed,» he explained.
Later in the afternoon, Senate Majority Leader Paul Gazelka said the GOP caucus has not met to discuss the issue and that he isn’t in a rush. He explained the mobile gambling aspects are of special concerns to him and he’s personally opposed.
«I do know that it requires more time and that is the 1 thing I’m gonna inquire of this invoice,» Gazelka explained. «It’s come forward around the nation and we’re gonna need to manage it like any other matter. But it’s not a partisan matter.»
Some thorny questions that are legal All of this became possible when the U.S. Supreme Court ruled last spring that Congress had exceeded its authority when it declared that sports gambling was illegal (except in Nevada, in which it was already 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 countries throughout the country considering whether to legalize and regulate sports betting. Eight already have, and surveys indicate legalizing sports betting has broad popular support.
The issue for the nation’s gambling tribes is whether they would make enough from the new gaming choice to compensate for the potentially gigantic expansion of it off-reservation. There is no clear response to if tribes could do much with mobile gambling, since the federal Indian Gaming Regulatory Act that generated the economic increase of casino gaming allows betting only on bookings. Though some states have declared that having the computer servers which procedure bets on reservations is enough to comply with the law, the problem has not yet been litigated.
The House and Senate bills also increase a thorny legal and political dilemma since they apply state taxation to tribal gaming, something the federal Indian Gaming Regulatory Commission has ruled is not allowed. While tribes in other nations have consented to share gaming revenue with countries, it’s come with valuable concession — such as tribal exclusivity over gambling.
Even though the House bill provides the tribes a monopoly for the time being, the Senate version cuts the nation’s two horse racing tracks in on the action. A 2018 analysis of the issue for the Minnesota Racing Commission calls sports gambling a»momentous threat» to racing, but notes that all the countries but one which have legalized sports gambling have let it be offered at race tracks. According to the commission, the Thoroughbred Idea Foundation has reasoned that»he most obvious means of minimizing the possible negative effects of legalized sports gambling on the racing industry is to allow sports betting at racetracks and also to direct internet revenues to the support of racing and breeding in the state. »
The Senate bill allows a kind of cellular betting but necessitates the use of geofencing to assure that the bettor is within state boundaries and needs them to get an account that’s been created in person in the casino or race track. Additionally, it generates a Minnesota Sports Wagering Commission, which will make rules such as what kinds of bets would be allowed and also regulate the games.
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