Two Proposals Support Betting Legalization in Minnesota

Just above a dozen US states currently do not offer legal sports betting or are in the process of establishing the relevant legislation. Since 2018, when the US Supreme Court struck down PASPA, nearly 40 states have legalized and launched some form of sports betting. While in some jurisdictions, wagering is available only via retail outlets, other US states offer both mobile and retail betting on sports. This statewide expansion helps reduce the share of the black market, provides a legal way for bettors to enjoy the activity and at the same time, continues to generate millions of tax revenue every month.

Minnesota, a state also popular as the Land of 10,000 Lakes, is yet to legalize sports wagering. While all of its neighboring states, Wisconsin, Iowa, South Dakota and North Dakota have already legalized wagering on sports, lawmakers in Minnesota are yet to develop legislation that regulates the activity. This doesn’t mean that there were no efforts over the last few years but rather that the process itself is complicated and requires not only a majority approval in the Senate and the House but a green light from the state’s tribes, who are an important stakeholder in the whole process.

Currently, the legalization of sports betting in the state enjoys bipartisan support. There are two separate bills that propose legal wagering. Both proposals are making their second appearance after they didn’t gain much traction during the last legislative session. One of the bills, is supported by Sen. Matt Klein. The proposal reappeared for the new legislative session after it didn’t progress during the last session.

Another proposal is the Minnesota Sports Betting Act 2.0, a bill filed by Sen. Jeremy Miller last month. Similarly to Klein, Sen. Miller’s proposal makes its second appearance.

Legalization of Betting to Generate Tax Revenue

Under Sen. Klein’s proposal, sports betting would be subject to a 10% tax. In a report released by KARE, the Senator estimated that his proposal, if greenlighted, would result in approximately $40 million in tax revenue for Minnesota. Sen. Klein spoke about the importance of legal wagering, explaining that residents in the state already participate in betting but they do it either via illegal operators or out of state. “So people are doing it anyway and we might as well make it safe, make it structured and make it legal,” he said.

On the other hand, Sen. Miller’s proposal suggests a tax rate of 15% for sports betting. This translates to an estimated $60 million in tax revenue annually from the legalization of the activity.

While there are two proposals, the future of legal wagering in Minnesota is not certain. This is because such a move is contingent on agreements with the state’s tribes that are likely to require exclusivity over the activity.