A House bill that would legalize, regulate and tax sports betting and daily fantasy sports in Minnesota cleared its latest hurdle.
Lawmakers passed House File 2000 in a party-line 12-9 vote at a House Taxes Committee hearing Tuesday afternoon.
However, Republicans who voted against the measure were skeptical it would pass in the Senate.
Committee votes down Republican amendments
Even though Gov. Tim Waltz has said he will sign Minnesota sports betting legislation that emerges from the Capitol, hopes are dwindling that lawmakers will get him a bill to sign this year. Several issues remain, some directly related to sports betting and others not a part of sports betting at all.
During the hearing, Republicans offered amendments that were voted down. The proposed amendments regarded concerns previously expressed by Republican members of both chambers, including concessions to charitable gaming organizations.
Rep. Zack Stephenson, HF 2000’s author, appeared at the hearing to explain a recently added element of the bill that would, in three years, provide around $40 million in tax relief to charitable gaming operations. The tax cut, Stephenson said, would ensure that charities would be the primary beneficiaries of funds from their gaming operations.
Republicans have fought to get more concessions. Restrictions on charitable organizations’ electronic pull-tab games were implemented in last year’s tax bill. At the hearing, Rep. Patti Anderson called the tax relief in HF 2000 “scraps” that would not be enough to compensate for the “devastation” of revenue lost by the restrictions..
Rep. Kristin Robbins introduced an amendment that would lower taxes on charitable gaming operations to a flat 5%. She pointed out that the tax relief in the sports betting bill would only reach $39 million by Year 3, after which it would expire.
Stephenson countered that Robbins’ amendment would end up costing the state $260 million.
Proposed amendment would have allowed HHR machines
Committee member Rep. Jon Koznick proposed an amendment that would strip out a ban on Historical horse racing (HHR) machines at racetracks.
“The Legislature shall not pass a law that prohibits betting on historical horse racing.”
Stephenson’s amendment (which the Taxes Committee voted to adopt) further strengthened the prohibition of HHR machines in the state. In response to the Minnesota Racing Commission approving the installation of 500 machines each at the state’s two racetracks, Stephenson’s amendment states that the commission does not have “the authority to approve or regulate historical horse racing, slot machines, video games of chance and other gambling devices.”
Stephenson scoffed at the wording in Koznick’s proposed amendment.
“I’m not sure we should be passing bills that say the Legislature should not pass a law to do anything.”
Republican members express skepticism sports betting bill will pass Senate
During the hearing, a few Republican committee members were skeptical that sports betting legislation would get passed this year. In unsuccessfully arguing for her amendment, Robbins said:
“I think the sports bill is going to die.”
Koznick made an analogy to the upcoming Kentucky Derby.
“This bill doesn’t quite cross the finish line. I think it’s running out of steam and dying a slow, slow death.”
Rep. Greg Davids, who proposed an amendment to give more to charitable groups, complained the tax cut for charitable gaming was put into a bill that he felt had no chance of passing this session.
“It’s somewhat unfortunate that (charitable gaming) is going to go another year with nothing. Because this bill will not pass. It’ll probably pass the House, but it will not pass the Senate.”
DFL committee members push back on pessimism
Democratic-Farmer-Labor Rep. Dave Lislegard, a committee member, pushed back against the gloomy outlook. He cited the citizens who testified on behalf of the charitable gaming organizations and veterans groups. Not only were they in favor of those groups, but they all approved of HF 2000.
Lislegard said he noticed the demeanor of the veterans in attendance turn sour during the discussion of the bill. He directed a statement toward them.
“I feel for ya, because basically you were told that this has no chance. I’m not giving up. There’s work to be done. I’m not giving up on the Senate. I would encourage you guys to continue your advocacy to try to get this over.”
At the end of the hearing, Stephenson also expressed some optimism the bill could get passed.
“I appreciate the conversation today, though not necessarily the prognostication. There’s a long way to go left in session. Nothing’s ever dead until Sine Die (the final day of the session on May 20). Let’s keep working, would be my ask of my colleagues.”
The bill now moves to the House Ways and Means Committee for a hearing.
