Sports betting in Minnesota

The Senate Tax Committee considered a proposal this week to legalize sports wagering in Minnesota and collect taxes on the earnings. This is a new topic since last year’s U.S. Supreme Court decision in Murphy v. NCAA, which found a federal ban on the practice in all states but Nevada was unconstitutional. Since that ruling, seven additional states (DE, NJ, MS, WV, NM, PA, RI) have moved to legalize sports betting in some format.

The Senate bill would establish a Sports Wagering Commission that would be responsible for many rules and regulations surrounding the new form of gaming, including determining which sporting events could legally be bet upon. Federally recognized Native American tribes and racetracks that are licensed to conduct wagering would be eligible to apply for licenses. The tax rate in this bill – 6.75% – is the same that Nevada imposes on a casino’s take of the pool in that state. Supporters are aiming for a tax rate that generates adequate revenue but doesn’t discourage betters from engaging in legal betting and instead staying in the underground market.

Advocates for this bill say sports betting is already happening through unregulated forms. Providing for a legal structure in Minnesota would provide recourse for consumers who are cheated through the underground market and would provide regulation and tax revenue. Opponents include those against gambling, who see this as an expansion of a dangerous habit and something that could encourage a new generation of gamblers. Minnesota’s tribal communities also have expressed serious concerns. They fear rushing to legalize this could degrade Minnesota’s current legal gaming structures, including tribal casinos, charitable gaming operations, and the state lottery. They prefer a study that assesses other states’ experiences before moving toward full legalization in Minnesota. The bill was referred to the Committee on State Government. (SF 1894)