Some Minnesota lawmakers are looking to place an unprecedented restriction on the state’s possible sports betting industry.
At its March 5 meeting, the Minnesota Senate’s Committee on Commerce and Consumer Protection voted to amend SF 1949. The bill would legalize Minnesota sports betting. However, the amendment would prohibit all in-game betting in the state.
After they approved the amendment, committee members voted to move the bill forward. Next, members of the Senate Committee on Taxes will hear the bill. The move pushes the legislation one step further in the process of potentially legalizing sports betting in Minnesota.
The approved amendment also included increased funding for responsible gambling studies and the state’s problem gambling helpline. Lawmakers would also require online sportsbook operators to allow users to set their own betting limits proactively.
Testimony ties in-game betting to problem gambling
In-game betting is also known as live-betting or “micro-betting” for more moment-to-moment wagers. The bill defines it as “placing a wager after a sporting event has started but before the outcome of the wager is determined.”
Before approving the amendment, Sen. Jordan Rasmusson tied the activity to gambling addiction. He said problem gambling experts found it to be one of the most problematic forms of wagering. Rasmusson cited testimony from Mark Gottlieb, executive director of the Public Health Advocacy Institute.
In written testimony, Gottlieb cited research suggesting in-game betting is synonymous with gambling addiction. The study said around 80% of people using in-game betting “meet the criteria of having a gambling problem.”
But he also said the ban wouldn’t drive bettors to offshore sportsbooks. Gottlieb testified that illegal betting sites can’t offer in-game betting. Those markets require cooperation with official governing sports bodies that offshore sportsbooks don’t have.
In-game betting ban would be ‘unique in the nation’
The bill’s sponsor, Sen. Matt Klein, and committee chair concurred with Rasmusson. They said in-game betting was highly problematic. It could lead to bettors chasing losses at a higher rate.
“This would be unique in the nation,” Klein said of the in-game wagering ban. “The prohibition on in-game wagering just says get all your betting lined up before the whistle blows, and you’re done for that game.”
Sports Betting Alliance says in-game bet ban would cut tax revenue
Klein noted that there would likely be pushback from the gaming industry over the in-game betting ban. Later, public testimony from Jeremy Kudon, the president of the Sports Betting Alliance, presented the opposing side’s view.
Kudon testified that in-game bets account for over 50% of U.S. sports betting market wagers. He said the SBA expects that number to grow to 70% by 2030.
Contrary to Gottlieb’s testimony, Kudon said banning in-game betting wouldn’t have good outcomes. Instead, it would drive bettors to illegal sports betting sites and make them more popular than ever.
Kudon said banning in-game wagering would also greatly decrease tax revenue for the state.
“Rather than bring in what we estimate to be $50-$75 million (in tax revenue) in Year 1, you’re talking about collecting maybe $20 million,” Kudon said.
Committee declines amendment banning betting on college sports
The Commerce and Consumer Protection Committee considered other amendments to SF 1949. That included a ban on any type of betting on any and all collegiate sports. That proposed amendment also received supportive written testimony from the Public Health Advocacy Institute’s Gottlieb.
Gottlieb referred to the ban on betting in-state college teams in Massachusetts and Ohio’s recent prohibition of college player prop bets.
“Students deserve greater protection, and this requires a ban of gambling involving all college sports,” said Gottlieb.
Rasmusson said he was open to allowing wagering on college sports in the future. Still, he supported this current amendment so that the state could focus on getting sports betting centered on professional athletics first.
Klein urged the committee not to vote for the college betting ban, saying such wagering amounts to about 50% of the total sports betting market. Banning betting on college sports, Klein said, would be “devastating” to the Native American tribes that, under SF 1949, would hold all of the sports betting licenses.
The college sports ban amendment was voted down by committee members and not adopted.
Republican senator proposes — then withdraws — two amendments
In a nod to SF 3803 introduced this year by Republican Sen. Jeremy Miller, fellow Republican Zach Duckworth proposed an amendment to SF 1949 that would allow the state’s horseracing tracks to partner with the tribes on retail sportsbooks.
Acknowledging that ceding tribal exclusivity of sports betting was a deal breaker with the DFL majority in Minnesota’s House and Senate, the senator withdrew the amendment before it could be voted on. He similarly withdrew another amendment that would reinstate some restrictions on charitable gaming implemented last year, another concession included in Miller’s bill.
Miller’s SF 3803 is awaiting its first committee hearing after being referred to the Committee on State and Local Government and Veterans in mid-February.
A sports betting bill in the House, HF 2000, was approved by its first committee in the current session on Feb. 22. The House bill, a DFL-led companion bill to SF 1949, is awaiting a hearing from the State Local Government Finance and Policy committee.
