Future prospects for legal sports betting in Minnesota rests with tribes, horse tracks

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Zack Stephenson, a state representative, was positive when he presented a bill that would allow sports betting in Minnesota. He’d succeeded in moving the majority of federally recognized tribal governments within Minnesota from ‘heck no to’maybe yes span> over the four years that the U.S. Supreme Court had allowed them to offer this gambling.

MinnPost photo taken by Peter Callaghan
State Rep. Zack Stephenson


It was huge.


While the tribes do not have exclusive legal rights to gambling in the state, they do have political power. DFL Governor. Tim Walz, DFL House Speaker Melissa Hortman did not have any interest in betting bills that didn’t require tribal approval.


Stephenson, DFL -Coon Rapids said that he reached an understanding with tribal leaders throughout the state by first respecting their sovereignty, and then following a fundamental principle of the tribal position regarding gambling. His bill would grant the tribes control of the new-toMinnesota gambling form, while excluding other non-tribal players like race tracks.


Stephenson and others were encouraged by the inclusion of the tribes to the bill, which was further bolstered by the endorsement of Stephenson’s actual bill by the Minnesota Indian Gaming Association in March. Are Minnesotans legally allowed to bet on sports before the Vikings NFL season begins?


It turned out that no.


House File 788 was passed by the state House 70 to 57 in May, mostly with DFL votes, but also with some GOP votes. The Senate GOP bill was not the right version for the tribes, as adjournment was imminent.


span style=”font weight: 400 The Senate bill and the House Bill are almost identical,” stated Sen. Roger Chamberlain (Lino Lakes Republican) and chief backer of Senate version. Chamberlain gave the two horse racing tracks in the State – Canterbury Park, Shakopee, and Running Aces in Columbus – equal authority to sponsor betting via mobile platforms.

MinnPost photo taken by Peter Callaghan
State Sen. Roger Chamberlain


Chamberlain stated, “If the House is not willing to move forward on that, then it will go nowhere.”


The House DFL was not. The majority of tribes that have casinos were not. Andy Platto, executive director of the Minnesota Indian Gaming Association, stated that his organization has “consistently opposed” expansions in non-tribal commercial gambling and would continue to do so.


The Senate bill was not brought to the floor, and the session was adjourned with no sports betting bill. Again.


Are the tribes able to walk away from a treasure trove? Theyre they still financially able to benefit if they had agreed to take part in the sports betting action. Most likely not.

Sports betting, unlike state lotteries and slot machines, is a low-volume, high-margin type of gambling. The majority of money wagered is returned to the players, with a large portion of it covering expenses. The Stephenson bill would allow tribes to keep all the profits from the in-person sportsbooks at casino casinos. However, they would have to pay a 10% tax on net wins (the amount that players bet minus any payouts or expenses) to the state.


This would be the first significant share of gambling revenue with state (some fees are already paid now to cover state regulation costs), but taxes could only amount to $13million a year, according to an analysis of Senate committee research.


The profits didn’t seem to be enough to force a majority tribes to give up their exclusivity. Geographical and economic factors played into the lack of unity among the tribes. Gambling on mobile platforms might be more beneficial for those who have casinos in remote locations or those who were affected by the closure of Canada’s border because COVID-19, than those who live in the population centers.

According to those who are closely following the industry, sports betting is now available in all 50 states. This was after a 2018 U.S. Supreme Court decision against a federal law that only granted it to New Jersey and Nevada. Minnesota is still among the few states that have legalized sports betting. This means Minnesotans are forced to travel to other states or to the illegal, unregulated market.

It is very popular. SurveyUSA conducted a springtime poll on KSTP and found that 64% of the 650 adults surveyed support legalizing sports betting. The poll also found that 57% of respondents want mobile betting and that 57% support in-person betting in tribal casinos as well as horse tracks. Only 7 percent believed tribal casinos should be exclusive.

Gambling’s economic impacts


Gambling for tribal countries is more than a business. It is central for their economies, their political power and their sovereignty.

“Much work remains to be done,” concludes a history of the issue at the Minnesota Indian Gaming Association’s. “But Indian gaming has made a significant impact on the reversal of the trend of poverty and neglect that generations of Minnesota’s Native Americans experienced due to the failed federal policy span>.


Anton Treuer is an Ojibwe professor at Bemidji State University. His 19 books include “Everything You Ever Wanted to Know About Indians, But Were Afraid To Ask span>

He writes that the political and economic power of Native countries has increased tremendously since the advent of casino gaming. “Tribal leaders are more comfortable and more effective in operating in the American or Canadian political systems. The public is slightly more informed about Indian country and this helps to generate outside support.”


Minnesota has a dozen counties where tribes are the biggest employer.


He writes: span style=”font weight: 400 You’d better be nice Indians there.” “You’ll likely end up working for one .”

Anton Treuer


Treuer (pronounced TROY’er) stated that there is a distinction between the economic impact of casino in states with exclusivity and those without.


He said that before the advent of gaming in Minnesota, tribal unemployment was approximately 50 percent. It is now at 20 percent in Minnesota, but it remains at 50 percent for South Dakota.


span style=”font weight: 400 ;”>” And that’s because South Dakota had already legalized statewide gambling,” he explained. “Anyone with better funding and better geography will have a more profitable casino.


Treuer asked. “The advantage of the tribes in gambling is not due to their superior geography, but rather because of their monopoly through state gaming.


A deal to bring in two horse tracks might not be a good deal.


Treuer stated that Minnesota’s tribes are pragmatic politically. It is possible that Republicans could control the government. Therefore, they are often a little politic about not inflaming right to make them ready for an attack on tribal sovereignty.


span style=”font weight: 400 That might cause them to move slower than they should because they are trying to get other things done. Treuer stated that while it might not be a factor in sports betting it is part of the political tapestry that tribes navigate.

Who’s in?


The State Capitol is home to the Minnesota Tribes, but it’s a very thin one. Although the Minnesota Indian Gaming Association acts as the public lobbyist, their employees aren’t particularly obvious. The association declined to interview anyone.


Platto was the current executive director and told Stephenson’s Commerce Committee that all but one tribe he represented supported Stephenson’s version.


“Font-weight: 400 In concept, the bill recognizes that the state’s gambling experts are best placed to manage Minnesota’s sports betting market in both mobile and retail environments.” Platto said. Platto said that the positive impact on existing tribal gaming was evident in other states that have legalized it. However, the law must be “carefully crafted” to ensure that the tribes are a key part of bringing the market to consumers .”


Chamberlain views the issue as one that allows consumers to choose and preserves horse racing in the state. Chamberlain stated that his bill would allow multiple bookmaking companies to set different odds and prices.


After his bill passed the Finance Committee, Chamberlain stated that he was willing to support the tribal business model. However, we can’t allow exclusivity in the case simply because it won’t be a good product. It would also make the tracks unprofitable, right? If you take the horse tracks out business, it will also mean a lot more jobs for the state .”


Canterbury has entered into a 10-year agreement with the Shakopee Mdewakanton Sioux Community (Mystic Lake Casino) in which the tribe provides financial support to purses, while the track owners agree to not seek expansion.


It is up to the racing associations and owners of Running Aces Columbus to represent those interests. Mike Cronin (executive director of the Minnesota Horsemen’s Benevolent & Protective Association) did not wish to discuss the topic more recently. However, he wrote via email during the session 2022 that the Stephenson bill was a danger to the industry.


Cronin wrote that span style=”font weight: 400 It would be like Burger King being unable to offer fries or beverages while McDonald’s can.” Cronin said, “Take a wild guess which race will succeed and which will die.” Both tracks have managed betting on horses for over a decade.

Bipartisan push


Sometimes it is overlooked that legislators have never gotten to the question of who should be running sports betting. Both the left and right-leaning lawmakers oppose expanding gambling to address moral and social justice concerns. Gambling addiction is still a major problem. The negative effects fall on the poorer and communities of color more than the others. A bipartisan coalition is necessary to have a pro-sports betting majority. There are also differences of opinion about who benefits and controls the new betting.


Stephenson’s view shifted from the casino-only betting at 19 casinos to mobile betting via app. Stephenson stated that he was convinced that mobile is the key to the success of the sports betting industry. He was then convinced to stay with tribal gambling managers, who have been operating gambling for many years.


span style=”font weight: 400 Expanding gambling from specific locations is a big thing. Stephenson stated that it is a great development to be allowed to gamble from your home. “If we want to do that, we should stick to the most established, sophisticated players on the market, which is the tribal casinos span>


Whether it is coincidental or not, this also aligns with the central DFL belief in which the tribes are the primary beneficiaries of gambling revenue. This revenue is used to fund tribal members’ social, economic, and health development programs.

Stephenson’s bill would have created master sports betting licenses for two tribes in Dakota: one for each of the Ojibwe/Chippewa and one for each of the four Dakota tribes. These master licensees will then be able to grant licenses for the tribes that fall under their jurisdiction. The master licensees will most likely contract with one or more of the major private sports betting companies like DraftKings, Bet MGM, and FanDuel. These companies formed the Sports Betting Alliance and lobbied heavily in St. Paul.

Sports betting may be legalized in all 50 states once it is. This could happen following negotiations with the tribes and the state under the federal Indian Gaming Regulatory Act. This 1988 law created the framework for tribal gambling in the United States


There are no sunset clauses in the existing compacts, which offered slots machines, a variety that imitates other card games and one that offered Blackjack. The tribes prefer it that way. They don’t have to return to state for any further negotiations or concessions.


Stephenson stated that the span style=”font weight: 400 That’s a red limit for them.” Both Chamberlain and Stephenson versions direct the governors to negotiate a third set compacts for sports betting in-person at existing casinos.


Stephenson acknowledged that tracks are having trouble maintaining prize money to support their industry. He said that tribal leaders asked him about sports betting. “Why are you giving preferential treatment this industry that’s not working out ?”

What’s next?


Two legislators who had been advocating legalization for sports betting were present in the minority during the session: Rep. Pat Garofalo (R-Farmington) and Sen. KarlaBigham (DFL-Cottage Grove). They weren’t able to make decisions on the bills and strategies so they were able to observe the process from a safer distance.

Pat Garofalo, State Rep.


Garofalo stated that the three main players, which he calls the Three T’s must agree to a plan before anything else can happen. These are the tribes and tracks, as well as the professional and collegiate teams.


He said that as we move from a black market into a regulated one, people will compete for market share and access. “When you regulate a dark market, government decides who will be in it.” Despite the tribal status that is federally recognized, others will continue to lobby for a share.


Garofalo stated that span style=”font weight: 400 ;”>”It is to be expected.” If all three parties are in support of the bill, then sports betting will be legalized in Minnesota. It is unlikely that any of these three parties will oppose the bill .”


Garofalo co-sponsored the Stephenson bill, and was one of five Republicans who voted for it. Four DFLers voted against. He said that his motivation was to get some legislation out of the House and into a conference with the Senate. That path was ended by the Senate’s inability to pass anything.

State Sen. Karla Bigham


Bigham sponsored bills that included both tribal casinos as well as horse tracks, so she is less attached to exclusivity than other DFLers.


span style=”font weight: 400 That’s not a purity check of mine,” she stated. Bigham, however, is leaving the Senate in pursuit of a seat on the Washington County Board. She stated that she would not support a bill unless all the tribes were supporting it.


She stated that she believes the end game will be accessible to all people, even if it is not in tribal casinos.

In response to questions regarding the future of sports betting, the Minnesota Indian Gaming Association (MIGA), issued a brief statement: “The MIGA tribes continue to evaluate the outcomes of the 2022 Legislative Sessions and consider their future policy positions going into 2023.”

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