Legal sports betting may be coming to Minnesota. But it does not seem to be in much of a rush.
Consider that the Senate bill that could partially legalize sports books in Minnesota narrowly slipped from its first committee Thursday (and faces an uncertain reaction at its next stop). The majority leader of the Senate is not keen on the idea. The state’s 11 Native American tribes are opposed. Anti-gambling and several religious organizations tend to be more than And, oh yeah, it will not raise much money.
There’s this: the House bill on the exact same topic hasn’t been set for a hearing, lacks assistance from DFL leadership, and confronts many of the very same obligations as the Senate bill.
Aside from that, it is a sure thing.
Inspired by Senate Taxes Committee Chair Roger Chamberlain, R-Lino Lakes, the Senate’s sports gambling bill, SF 1894, will have exemptions from both Republican and DFL senators. Plus it made its first official appearance before Chamberlain’s own committee Thursday. “That is a business, it’s a profession, it is amusement,” Chamberlain said. “Individuals do make a living off of the… and they also have a great deal of fun”
And even though it isn’t lawful in Minnesota, there are many people who bet illegally or through offshore mobile or online websites. Chamberlain thinks by legalizing and regulating it, the state might bring to the surface what’s currently underground.
But sports betting gambling is a minimal profit business for casinos; a lot of what is wagered is returned to players as winnings, which means the part that would be subject to state taxation,”the grip,” is comparatively modest. 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’s a money-maker for them also it may be,” Chamberlain said. “But we are not in this to raise a whole lot of revenue. We would like people to take part in the company and have some fun doing it.” Casinos and race tracks could benefit using sports gambling as a way to bring more people into their casinos, he said.
The bill says that if the nation’s tribes wish to offer sports gambling, they would need to ask a new compact with the state, something demanded by federal law. The state is obligated to bargain in good faith which includes agreeing to some kind of gambling already allowed off reservation.
But 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, and therefore are in no hurry to add sports betting to their operations.
McCarthy said the tribes have invested billions of dollars in gaming facilities and use them to raise money to pay for”human services, schools, clinics, home, nutrition plans, wastewater treatment centers, law enforcement and emergency services, and other services.”
“Since these operations are essential to the capacity of tribal governments to satisfy the requirements of their people, MIGA has had a longstanding position opposing the growth of off-reservation gambling in Minnesota,” McCarthy said. The cellular facets of the bill, he said, would”make the most significant expansion of gambling in Minnesota in more than the usual quarter-century, and therefore MIGA must respectfully oppose SF1894.”
He said the tribes were particularly worried about mobile gaming and how it could lead to even more online gaming,”which represents an even more significant threat to all sorts of bricks-and-mortar facilities that now offer gaming: Japanese casinos, race tracks, lottery outlets, and bars with charitable gambling.”
Also opposed was an anti-gambling expansion group and a religious social justice organization. Ann Krisnik, executive director of the Joint Religious Legislative Coalition, mentioned the state financial note that stated the earnings impacts of the bill were unknown.
“It’s unknown not only concerning revenue, but it is unknown also concerning the greatest costs this creates for the state,” Krisnik said, citing societal expenses of more gambling.
Jake Grassel, the executive director of Citizens Against Gambling Expansion, said the bill was a bad deal for the nation. “The arguments in favour of legalizing sports betting may appear meritorious at first blush — which is, bringing an unregulated form of gambling out of the shadows,” Grassel said. “Upon further reflection and consideration, the costs are too high and the benefits are too little.”
A method to’begin conversations with the tribes’
The Senate bill finally passed the Taxes Committee with five votes, two no votes and a”pass” Two additional members were also absent. It now belongs to the Senate Government Operations Committee.
After the taxation committee vote, Chamberlain said he considers this a way 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 betting.
“We are hopeful that they’ll come on board,” Chamberlain said of these tribes. “Their business model won’t continue forever. Young folks do not visit casinos. I go to them sometimes with my partner and other people and often I am the youngest one there and I am in my mid-50s. We believe it is a business enhancer.
“I understand their care but we are right there with them and when they get more comfortable and more people know about it, I’m convinced we will proceed,” he explained.
Later in the day, Senate Majority Leader Paul Gazelka stated the GOP caucus has not met to discuss the matter and he isn’t in a hurry. He explained the cellular gambling aspects are of particular concerns to him and he is personally opposed.
“I really do know that it requires more time and that’s the 1 thing I’m gonna inquire of this bill,” Gazelka explained. “It’s come ahead around the country and we are gonna need to deal with it like any other issue. Nonetheless, it’s not a partisan matter.”
Some thorny questions that are legal All this became possible when the U.S. Supreme Court ruled last spring that Congress had exceeded its power when it declared that sports gambling was illegal (except in Nevada, in which it was operating at the time). New Jersey had sued to clear the way for sports novels at its struggling Atlantic City casinos.
The decision quickly led countries across the nation considering whether to legalize and regulate sports betting. Eight already have, and polls indicate legalizing sports gambling has broad popular support.
The problem for the country’s gaming tribes is whether they would make enough from the new gaming choice to compensate for the potentially gigantic expansion of this off-reservation. There’s no obvious response to whether tribes can do much with cellular gaming, since the federal Indian Gaming Regulatory Act that created the financial increase of casino gaming allows betting only on reservations. While some states have announced that having the computer servers that process bets on reservations is enough to comply with the law, the problem has not yet been litigated.
Both the House and Senate bills also increase a thorny political and legal dilemma since they apply state taxation to tribal gaming, something the federal Indian Gaming Regulatory Commission has ruled is not allowed. While tribes in different nations have agreed to share gambling revenue with states, it has come with valuable concession — such as tribal exclusivity over betting.
While the House bill gives 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 evaluation of the problem for the Minnesota Racing Commission calls sports betting a”momentous threat” to racing, but notes that each of the countries but one that have legalized sports gambling have let it be offered at race tracks. As reported by the commission, the Thoroughbred Idea Foundation has reasoned that”he obvious way of decreasing the possible negative effects of legalized sports betting on the racing market would be to allow sports gambling at racetracks and to direct internet revenues to the aid of breeding and racing in the state. ”
The Senate bill allows a kind of cellular betting but necessitates using geofencing to assure that the bettor is within state boundaries and requires them to get an account that has been produced in person in the casino or race track. It also creates a Minnesota Sports Wagering Commission, which will make rules including what kinds of bets would be permitted and control the matches.
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