Minnesota Senate Committee Pushes Forward Sports Betting Legislation

As the legislative session draws near its end, the Minnesota Senate Committee has propelled forward a bill concerning sports betting legalization. Led by Senator Matt Klein, the progression of Senate File (SF) 1949 is now advancing to the Senate Finance Committee following its successful navigation through other Senate committees. Should it garner approval in the Senate, a similar process will ensue in the House of Representatives.

SF1949, serving as a companion to House File 2000, is a bill working towards legalizing retail and online sports betting across Minnesota. Under these measures, the bills empower Minnesota’s federally recognized Native American tribes, granting them a central role in the regulation and operation of these betting activities. Mobile sports betting licenses would be exclusively designated for the state’s 11 tribes.

More: Minnesota Sports Betting | Sports Betting Apps | Sportsbook Promos

SF 1949 Adjustment Proposal

During the hearing, deliberations centered on crucial adjustments, particularly regarding tax rates and the subsequent distribution of generated revenues.

Senator Aric Putnam played a prominent role during the session by introducing an amendment that introduced significant alterations to the proposed legislation. Hence, the amendment included a substantial increase in the tax rate on net revenues from sports betting, doubling it from the initial 10% to a notable 20%.

“The changes made in the Senate Taxes Committee today have made this a better bill for Minnesotans. I am thankful for the committee’s thoughtful consideration of this legislation and willingness to work toward the best balance of needs and interests,” said Senator Klein.

The amendment further stipulates that operators can fully deduct promotional play expenses for the initial two years, gradually reducing the deduction by 25% over four years until it reaches zero.

Furthermore, the allocation of funds generated from sports betting tax revenue is outlined in the amendment. This includes designating 10% for initiatives addressing problem gambling and promoting responsible gaming, as well as directing 5% of the revenue to support the state’s two racetracks.

Additionally, the bill specifies that 20% of the tax revenue will be allocated to provide tax relief for charitable foundations, while 15% will be earmarked for Minnesota’s tourism commission to attract sports and entertainment events to the state. Another 5% will be directed to the Minnesota High School League, with the remaining 45% allocated to the general fund.

“As a result of this work, we are now able to support our allied charities who engage in gaming so they can continue the good work they do for our state. We are also able to invest in the state high school league’s ability to foster participation in a wider array of activities, attract more large sporting events to Minnesota, and continue to focus efforts on problem wagering awareness,” Senator Klein continued.

Like every other judicial proposal, there’s usually an opposing party, either standing as the minority or the majority voice. Senator Steve Drazkowski, a representative of the opposing faction, has expressed dissent towards the tax amendment, contending that the proposed increment would impose undue strain on consumers.

“This is taxpayers, the public, paying for promotional activities for the industry to establish itself on this very addictive behavior. No matter how you try to disguise it or hide it, the people who engage in this activity are paying the taxes. If the tax isn’t there, the fees would be lower,” Drazkowski said.

Time Constraint

Lawmakers in Minnesota are aware of the approaching deadline and the need to reconcile divergent opinions as the legislative process progresses. Any law related to sports betting must receive committee approval in both chambers by Friday, March 22, while the Minnesota legislature needs to wrap up all its business for this year’s scheduled session by May 20.

Currently, the state stands among only 12 others that have yet to legalize sports betting, surrounded by neighboring jurisdictions such as Iowa, where sports wagering is already legal.


About the Author
Tebearau Egbe

Tebearau Egbe

Tebearau Egbe is a seasoned gambling writer with more than four years of experience. Armed with a Masters degree in philosophy, Egbe possesses a unique ability to dissect complex industry developments, distilling them into insightful narratives that captivate readers.

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