A bill proposed by state Sen. Matt Klein that would have legalized online sports betting in Minnesota failed to make it out of a Senate committee, bringing an unceremonious end to that particular push to bring sports wagering to the North Star State.
The bill, SF 757, would have provided wide-ranging regulation for sports betting and fantasy contests. It would’ve allowed up to 11 sports betting operator licenses, as well as corresponding licenses for platform providers and suppliers.
Inside the Minnesota sports betting bill
Sports betting bills tend to be lengthy documents that include regulations such as background investigations for sportsbooks, procedures for punishing those that break sports betting laws, and what the sports betting governing body’s role and responsibilities will be.
What tends to grab the most attention, though, is what types of sports betting are available, which entities can offer it, and what the tax rates are.
The Minnesota bill would’ve legalized online sports betting, making 11 licenses available to the state’s federally recognized tribes that operate a Class III casino. Sports betting revenue would have been taxed at a rate of 22%.
Tax rate would’ve been one of the highest in country, region
Klein’s proposed tax rate of 22% would’ve been the seventh-highest in the country:
| State | Mobile sports betting tax rate | Rank |
|---|---|---|
| New York | 51% | #1 (tied) |
| Rhode Island | 51% | #1 (tied) |
| New Hampshire | 51% | #1 (tied) |
| Delaware | 50% | #4 |
| Illinois | Up to 40% | #5 |
| Vermont | 31.7% | #6 |
| Minnesota | 22% | #7 |
Additionally, the 22% tax rate would’ve been the second-highest in the region:
| State | Mobile sports betting tax rate | Regional rank |
|---|---|---|
| Illinois | Up to 40% | #1 |
| Minnesota | 22% | #2 |
| Ohio | 20% | #3 |
| Kansas | 10% | #4 |
| Indiana | 9.5% | #5 |
| Michigan | 8.4% | #6 |
| Iowa | 6.75% | #7 |
Tax structure would have sent 75% of revenue back to gaming
The bill called for taxes to be used in a way that made friends and enemies. Here’s how the tax revenue would’ve been split up, according to a summary of the bill:
- 45% to charitable gaming organizations
- 15% to the state’s horse racing industry via an economic development fund
- 15% to tribes
- 11.5% to sports marketing and awareness
- 8.5% to compulsive and problem gambling support
- 5% to the Minnesota Amateur Sports Commission via grants
The bill won the support of the Canterbury Park horse track and the Minnesota Indian Gaming Association.
However, the 11.5% share for sports marketing and awareness drew the opposition of some lawmakers, including Sen. Erin Maye Quade. The legislator told Legal Sports Report that she didn’t like how most of the tax revenue generated by sports betting would go back into the gambling industry.
“This benefits literally nobody except a predatory tech industry,” she said. “There is so much more work to get any sort of real protections. If the industry likes this bill, it’s probably not good.”
