Minnesota tracks and tribes clash over HHR and sports betting

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Tuesday’s meeting of the Minnesota House Commerce Finance and Policy Committee did not directly discuss sports betting but the contentious debate on a bill from Committee Chair Rep. Zack Stephenson could impact the legalization of the market.

The bill at the heart of the debate was HF5274, which, among other things, would roll back the Minnesota Gaming Commission’s recent decision to allow historical horse racing machines at Running Aces and Canterbury Park racetracks.

The committee advanced the bill by a 9-8 vote and it will move on to the State and Local Government Finance and Policy Committee next.

Bill would prohibit HHR machines and stadium-style card games

In addition to explicitly prohibiting HHR machines at racetracks, the bill also addresses what constitutes a card game and a gaming table. Currently, the rooms can offer video-assisted gaming where a single dealer can deal to more than the standard seven players that fit at a traditional table. The MGC approved these games seven years ago but this legislation would roll that approval back.

A number of Canterbury Park and Running Aces employees showed up to testify that they could potentially lose their jobs if these changes were to take effect. Running Aces CEO Tracy Wilson also appeared as did the company’s General Counsel Evan Nelson.

Both Nelson and Wilson pointed out that there are now two active lawsuits in the state courts about both of these issues. The Shakopee Mdewakanton Sioux Community filed suit to challenge the stadium-style card games in late 2023. Then, on Monday, the tribe filed a second suit against the MGC challenging the group’s decision to allow HHR machines.

“Please let this go through our legal system,” Wilson said. When discussing her reaction to Stephenson’s bill, she said she experienced “anger, sadness and disappointment.”

Many critics of the bill said it appeared as if the legislature was picking winners and losers and keeping the parimutuel industry from evolving. Wilson pointedly asked, “Why can’t we modernize our parimutuel product?”

Bill sponsor says lawmakers need to stop regulatory overstep

Stephenson defended his bill, saying the MGC overstepped and it is the legislature’s job to make laws, not to defer to the judicial branch on the matter. He also repeatedly stated that he believed MGC was overstepping its authority by authorizing HHR machines, as he views it as gambling expansion.

The debate ended with an understanding from all parties that this bill and sports betting are tied together in a broader discussion about a bill expanding gambling, including sports betting, in a manner that pleases everyone.

Tribes and tracks need to find compromise on sports betting and HHR

“The solution isn’t $600,000 for the racetracks,” quipped Rep. Brian Pfarr. The remark was a jab at Stephenson’s sports betting legislation, which earmarks $625,000 in annual racetrack funding.

Stephenson’s bill proposes to regulate fantasy sports and sports betting with licenses going to pro teams and tribes in the state. It is one of several pieces of sports betting legislation introduced this year.

Last month, a Senate sports betting vehicle passed out of committee but not without a controversial amendment banning in-game wagering.