The author of the sports betting bill working its way through the Minnesota House of Representatives provided an update on the bill’s state in an April 3 informational House committee hearing.
Rep. Zack Stephenson outlined a recent amendment to his House File 2000. It would legalize daily fantasy sports, increase the tax on sportsbooks from 10% to 20% and provide tax relief for charitable gaming organizations.
The House Commerce Finance and Policy Committee held an informational-only hearing. In other words, lawmakers would not vote on the Minnesota sports betting bill. Instead, Stephenson wanted to update the committee he chairs.
HF 2000 is currently in the House Taxes Committee awaiting a vote. The Taxes Committee originally scheduled a hearing to discuss the bill, but legislators made a last-minute change to a different committee.
A companion bill in the Senate, SF 1949, currently sits in that chamber’s Finance Committee. The legislative session ends on May 20.
Members ask about possibility for tribal profit-sharing
Governor Tim Walz said he would sign a sports betting bill if one advanced to his desk. All bills to legalize sports betting have failed to pass the Minnesota Legislature in the past five years.
HF 2000 would give Minnesota’s 11 tribes control over online licenses. They would partner with sportsbook operators to offer sports betting statewide.
A couple of Republican committee members asked whether a provision should be added to require tribes partnering with the larger sportsbook operators to share revenue with tribes that partner with smaller operators.
Rep. Anne Neu Brindley said that since larger operators like DraftKings and FanDuel tend to account for the vast majority of market share, the bill should address the revenue inequality among the participating tribes.
“Does this leave some folks out of the profits without a profit-sharing mechanism? Is that another way to get this done that’s fair to all the tribes?”
Stephenson said the bill allows tribes to negotiate with sportsbook operators separately. He added the State shouldn’t be involved in how their revenue is dispersed.
“I am tickled to hear a Republican concerned about income disparities. We’re talking about sovereign governments here, and it’s probably not appropriate for the state of Minnesota to be telling them what to do with their money.”
The state’s tribes have expressed support for HF 2000. They’ve said they have some misgivings but nothing regarding profit-sharing.
Lawmakers discuss legality of ‘historical horse racing’ machines
Discussing another part of HF 2000’s recent amendment got a little more testy. It prohibits the state’s horse racing tracks from operating “historical horse racing” (HHR) machines. Minnesota Republicans have been fighting for ways to offer the state’s two tracks some benefits in the sports betting bill. They say the struggling tracks will be negatively impacted.
The current bill includes $625,000 in annual funding for the tracks. But it also includes language explicitly prohibiting HHR machines, which Stephenson says are just slot machines.
Neu Brindley called the purse supplements “literally couch-cushion money.” He suggested permitting HHR machines might go a long way in passing the bill.
“It seems like this is a really easy way to help make these other organizations whole.”
The Minnesota Racing Commission voted to allow HHR machines at tracks earlier this week. Stephenson called the move illegal, reiterating that the machines are against Minnesota law. He said he expected the commission’s move to be nullified either legislatively, like in the sports betting bill, or in the courts.
Stephenson was emphatic that HHR legalization should never be a part of HF 2000.
“There is no universe in which any bill that leaves this committee is going to authorize historical horse racing at the tracks. That’s a total non-starter, will not happen, will not be part of a sports betting deal – bright red line in the sand.”
