Of the three bills in the Minnesota legislature to legalize sports betting, SF 1949 is arguably the front-runner to pass. However, it will be tough to get the state’s tribal nations on board with it.
Like HF 2000 in the Minnesota House and a competing Senate bill sponsored by Sen. Jeremy Miller, SF 1949 would create a Minnesota sports betting industry. On the other hand, as the bill progressed through several committees, lawmakers amended it to prohibit live betting.
It’s not unusual for states to add certain stipulations along with legal sports betting. For instance, some states don’t allow residents to bet on in-state college programs.
But this is very different. Minnesota would become the first state to implement a live betting ban.
Live betting has skyrocketed in popularity over the last few years as mobile sports betting boomed. And it could be viewed as a missed opportunity for Minnesota state coffers.
Minnesota has a clear priority for sports wagering to benefit its tribes. Tribes have exclusivity over casino gambling and most lawmakers are willing to give them control of sports betting, too.
But with two other legislative options, would this amendment force the tribes to oppose it?
SF 1949 amendment may hurt gambling revenue, funnel customers to offshore betting
Cutting out a significant part of a hypothetical sports betting market would theoretically diminish revenue numbers. That means less money for the tribes and the state when it’s time to collect taxes.
Sports Betting Alliance President Jeremy Kudon said that in-game bets comprise 50% of the nation’s market. His team believes 50% may shoot to 70% in the next six years.
“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.
A study from the International Betting Integrity Association notes that banning in-game wagers may lead to negative financial consequences, both for states and their bettors.
“Whilst politically attractive, this study confirms that bet restrictions are a blunt and counterproductive instrument,” International Betting Integrity Association CEO Khalid Ali said.
Live-betting restrictions ‘drive (customers) into the unregulated market’
It’s also worth noting that if players can’t find certain wagers in their markets, they will try to look elsewhere for the same bet.
“(Restrictions) don’t prevent betting, they just drive it into the unregulated market where most of the problems with sports integrity arise,” Ali said.
Enter offshore betting. Offshore wagering is illegal, and it comes with a heightened risk for players around the ability to collect funds, fall victim to scams and have personal information stolen.
Driving customers to illegal markets is the last thing Minnesota wants to do. Especially when this amendment calls for increased funding for responsible gambling studies and Minnesota’s problem gambling helpline.
Would Minnesota tribes support this bill?
You never want to rule anything out. But it’s not out of this world to believe Minnesta’s tribes aren’t totally on board with SF 1949.
For starters, the Minnesota Indian Gaming Association already supports House File 2000, a competing bill for sports betting legislation. MIGA also voiced support for SF 3803, otherwise known as Minnesota Sports Betting Act 2.0.
MIGA Executive Director Andy Platto noted that the tribes share concerns over the amendment.
“Some of these policy changes are of serious concern to MIGA tribes. However, tribal leaders do ask for the committee’s support of the bill as amended today so it can continue its progress in the Senate.”
Based on his comments, it appears as though SF 1949 isn’t a finished product. There will likely be more changes, but as Platto said, the tribes want legal sports betting and will ask for committee support.
If Minnesota tribes want the most revenue possible from sports betting, leaders will likely listen
It’s safe to assume that the tribes will want the most revenue possible when it comes to sports betting. And getting rid of in-game wagering, a sizeable chunk of the market, would muffle those figures.
Projections from the IBIA and the Minnesota Department of Revenue show that sports betting could lead to $400 million in revenue within three years of operation. That number could like quite different if live wagering isn’t a part of the equation.
To this point, Minnesota has tried to give exclusivity to tribes and prioritize their voices.
Sen. Matt Klein, the sponsor of SF 1949, advocated for this last year.
“Tribal exclusivity will not be violated,” he said last spring.
Time will tell what Platto meant when he said some changes are a “serious concern.” But the main one, banning in-game wagering, could be just that. And if the MIGA isn’t fully on board, changes will likely be made. Or another bill will end up leading the charge.
Are concerns around live betting justified?
The underlying reason for banning live betting is to help those with gambling addictions.
Sen. Jordan Rasmusson cited a testimony from Public Health Advocacy Institute Executive Director Mark Gottlieb for his reasoning. Gottlieb’s testimony highlighted research that indicated live betting is synonymous with addiction. Specifically, 80% of people engaging in live wagering “meet the criteria of having a gambling problem.”
Responsible gaming should be — and is, for the record — a top priority for Minnesota, as evidenced by this recent amendment’s emphasis. But if in-game betting was a clear-cut driver of problem gambling, why haven’t other states with legal sports betting banned it?
Klein also said that live betting leads to players chasing losses at a larger rate. But the idea of chasing a loss can go both ways. Let’s say Minnesota legalizes sports betting but still bans live betting. Once a game ends or the second a bet loses, someone looking to ‘chase their losses’ could easily wager on the next game. Chasing losses isn’t exclusive to in-game betting.
The amendment of SF 1949 raises plenty of questions. There needs to be unity, which includes tribal support, for a sports betting bill to pass to check off all the boxes. And it’s hard to imagine Minnesota’s tribes fully on board with less revenue due to the in-game wagering ban.
