The Minnesota Legislature has seen another gambling measure come across its desk as lawmakers continue to file legislation that would authorize sports betting in the state.
Sen. Nick Frentz introduced Senate Bill 3414 which aims to legalize and regulate mobile sports betting and daily fantasy contests in Minnesota. Under SB 3414, residents and visitors over 21 years of age or older are legally allowed to wager.
Frentz’s measure ties mobile sports betting and DFS to federally recognized tribes. If enacted, the bill would require the governor to negotiate new tribal-state compacts.
SB 3141 allows the Minnesota Gambling Control Board to issue up to 11 mobile sports betting operator licenses that are valid for 20 years. Licenses can only be issued to a Minnesota tribe that conducts Class III casino gaming. Tribes approved for a mobile sports betting operator license can only hold one license. The state’s gaming commissioner must accept or reject license applications within 90 days of receipt.
Entities that are awarded an operator license must pay an annual licensing fee of just $2,125.
Licensing for suppliers and platform providers
While operator license would be offered at a relatively low cost, platform licenses would be substantially more expense. Licenses would be valid for two years with a $250,000 licensing fee. Renewals are $83,000.
Prospective sports betting suppliers must pay a $75,000 licensing fee if they are approved for an application that costs $16,500. Under SB 3414, supplier renewals are $33,000.
The measure also calls for supplier licenses to be valid for two years.
Advertising rules prohibit “risk-free”
SB 3414 requires all advertisements related to mobile sports betting to display “1-800-GAMBLER” or other toll-free problem gambling helplines. The bill also prohibits any license holder from depicting underage gambling and appealing to individuals under the age of 21.
Any marketing that is described as “risk-free” is also barred from being published.
Licensed operators are required to offer a 24-hour helpline for problem gambling. The helpline must be provided by the National Council on Problem Gambling.
While these are standard measures in most states, the bill does have a unique prohibition that would keep apps from using push notifications on phones to entice people back onto the app.
Potential tax rate in Minnesota
Under SB 3414, licensed operators must pay a 22% tax rate on net sports betting revenue. Any wager that is placed on tribal land in the state is not subject to the bill’s tax rate. Tax revenue from sports betting is to be deposited into a sports betting revenue account.
The account is responsible for further distributing the funds with 40% of the proceeds to be sent to the state’s gaming commission for tax relief payments. SB 3414 calls for 15% of the tax revenue from sports betting to be transferred to the Sports Betting Equalization Account with 10% to be transferred to bolster sports marketing and awareness.
The Commissioner of Human Services is set to receive 10% of the proceeds with another 10% to be transferred to an account to support amateur sports integrity and participation.
The lesser of $3 million or 15% must go to the Racing Economic Development Account.
Similar legislation in Minnesota
SB 3414 has similarities to a competing bill that has also been introduced in the Senate.
In January, Sen. Matt Klein introduced Senate Bill 757 as a piece of legislation that also ties mobile sports betting and DFS to federally recognized tribes that offer Class III gaming. SB 757 also allows for up to 11 mobile sports betting licenses to be awarded with licenses valid for 20 years. Minnesota’s tribes are also only eligible for one operator license.
Klein’s measure also levies a 22% tax rate on sports betting net sports betting revenue. The bill differs from SB 3414 through its distribution of the tax revenue from wagering.
SB 757 requires 45% of tax revenue to be sent to the gaming commissioner for tax relief payments while 15% is to be distributed to the Racing Economic Development Account. It calls for another 15% of tax revenue to be transferred to the Sports Betting Equalization Account. A small portion of revenue, 10%, is to be used to bring major sporting events to Minnesota with another 10% set to go to Human Services.
The bill also sees 5% of revenue allocated toward youth sports programs.
Sen. Jeremy Miller has also introduced a measure, the Minnesota Sports Betting Act 3.0, marking his third attempt to bring regulated mobile sports betting to the Gopher State.
Miller’s bill allows up to 11 mobile operator licenses with a 20% tax rate on revenue.
