The Minnesota Legislature is preparing to consider another piece of legislation that proposes the legalization and regulation of sports betting across the state.
State Sen. Matt Klein has introduced Senate Bill 757 as a measure that aims to authorize sports betting and fantasy contests in the Gopher State in partnership with federally recognized tribes that conduct Class III casino gaming. SB 757 allows for up to 11 online sports betting licenses to be awarded to the state’s tribes with licenses valid for 20 years.
Minnesota’s 11 tribal nations are eligible for only one online wagering license each.
Under SB 757, operators are subject to a 22% tax rate on sports betting net revenue with wagers placed on Indian land not subject to the tax rate.
SB 757 calls for 45% of tax revenue to be allocated to the gaming commissioner for tax relief payments while 15% is to be distributed to the Racing Economic Development Account. Under SB 757, another 15% of tax revenue is to be transferred to the Sports Betting Equalization Account with 10% of tax revenue to be deposited into an account designed to bring major sporting events to Minnesota. Another 10% is set to go to the commissioner of Human Services with 5% transferred to youth sports programs.
Klein’s bill also provides specific payment details for each account that receives revenue.
Minnesota’s potential DFS market
The bill also establishes a framework for fantasy contests with tribes having the opportunity to partner with DFS operators with up to 11 licenses available. DFS operators are only allowed to partner with tribes under SB 757 with 21 being the minimum age for DFS.
The measure also prohibits mobile push notifications sent by fantasy contest operators.
Under SB 757, fantasy contests are taxed at a 15% rate on adjusted gross receipts. The distribution of revenue from fantasy mirrors the allocation of sports wagering revenue.
Competing bill in Minnesota
Klein has filed SB 767 after Sen. Jeremy Miller recently introduced a sports betting bill marking his third attempt to bring regulated sports betting to Minnesota.
Last week, Miller released the Minnesota Sports Betting Act 3.0, a reiteration of the Senator’s previous legislative efforts to authorize sports betting in the state. The bill builds on two previously failed efforts to pass a sports wagering measure in Minnesota.
Miller’s latest bill also proposes up to 11 sports betting licenses that are valid for 20 years but the proposed measure levies a 20% tax rate on online sports betting net revenue.
Sports wagers placed on tribal land are also not subject to the tax under Miller’s measure.
His bill calls for 50% of tax revenue from sports betting to be allocated toward tax relief on charitable gaming while 25% would go toward bringing major sporting events to the state.
The Minnesota Racing Commission would receive 20% of sports wagering tax revenue while problem gambling efforts and grants for youth sports would each receive 2.5%.
Miller estimates Minnesota to generate $80 million in revenue annually from the 20% rate.
Legal tension for Minnesota tribes
Klein and Miller are considering sports betting legislation tied to Minnesota tribes as two tribes in the state find themselves in a federal lawsuit with Running Aces Harness Park.
The lawsuit stems over gaming offerings at the tribes’ casinos with Running Aces alleging that the tribes overstepped their authority to conduct gambling by offering table games.
In the complaint, Running Aces believes the tribes are violating the Racketeer Influenced and Corrupt Organizations (RICO) Act by offering games like Three Card Poker.
The two tribes are the Mille Lacs Band of Ojibwe and the Prairie Island Indian Community. According to court documents, a hearing on a motion to dismiss is Feb. 13.
Last April, the Shakopee Mdewakanton Sioux Community filed a lawsuit against the Minnesota Gaming Commission to challenge its decision to authorize historical horse racing machines, which are authorized to operate at Running Aces and Canterbury Park.
