A newly introduced bill in the Minnesota Senate aims to establish a tribal-led online sports betting market, permitting Native American tribes to collaborate with one licensed mobile sportsbook platform provider for statewide betting activities.
The legislation, known as Senate File 4139 (S.F. 4139), was presented in the Minnesota Senate on Wednesday. As stated on the state legislature’s website, this proposal has been assigned to the Senate Commerce and Consumer Protection Committee as well as the Rules and Administration Committee.
This initiative has garnered bipartisan support. Advocates include DFL Senator Nick Frentz and Republican Senator Jeremy Miller, both of whom have previously endorsed sports betting legislation within the state.
According to the bill, the Minnesota commissioner of public safety would be responsible for regulating mobile sports wagering.
The commissioner would be allowed to grant up to 11 online sports betting operator licenses to Native American tribes. Each license would be valid for a 20-year term and would be exclusively available to tribes that legally operate Class III gaming in a physical casino in Minnesota.
Each tribe may partner with one licensed mobile sportsbook platform provider for their online betting operations.
Tribes would need to pay an annual licensing fee of $2,125. Platform providers associating with tribes would incur a one-time licensing fee of $250,000 and renewal charges of $83,000 every two years.
The legislation stipulates a 22% tax on net revenue generated from online sports betting. Net revenue will be calculated based on total wagers minus payouts and “the fair market value of noncash prizes awarded in winnings during the month.”
The tax proceeds will be allocated as follows:
- 50% to offset taxes on charitable gambling revenue
- 15% to support the horse racing industry
- 15% for Native American tribes lacking sportsbook partners with more than a 10% market share
- 15% for grants that promote major sporting events in Minnesota, aimed at “enhancing access to sports for residents of greater Minnesota”
- 4% for responsible and problem gambling programs
- 1% for initiatives supporting “amateur sports integrity and participation”
Additionally, tribes may provide in-person sports wagering at their casinos if they negotiate updated gaming compacts with the state. Bets placed on tribal lands will not be subject to state taxation.
The legislation incorporates various restrictions on sportsbook operations. Online sportsbooks will not be permitted to offer college prop bets. Furthermore, sportsbook apps will be limited in their push notifications, which can only alert users about “potentially fraudulent activities” related to their account or for responsible gambling and identity verification purposes.
Funding sportsbook accounts using credit cards will also be banned. The bill clarifies that “peer-to-peer wagers made on a betting exchange” will not be classified as legal sports wagering in Minnesota.
The proposal mandates that the commissioner of public safety conduct a comprehensive study on gambling activities in Minnesota before legal sports betting commences. This study aims to evaluate the current wagering landscape in the state and analyze the prevalence of problem gambling. Data collection must be completed before the commencement of mobile sports wagering, and the study is to be updated every three years.
Another study will assess the impact of sports betting on the rates of gambling disorders, associated suicides, and risks for youth developing gambling disorders, based on existing research from jurisdictions where sports betting is operational.
For several years, Minnesota lawmakers have debated the authorization of sports betting without any conclusive outcomes. During the current legislative session, other pressing issues, including allegations of fraud concerning government services and proposals for new firearm restrictions following the assassination of former House Speaker Melissa Hortman, are likely to take precedence.
DFL House Leader Zack Stephenson recently mentioned to Axios that sports betting ranks “issue No. 27 on this year’s agenda.” Despite the prioritization of other matters, lawmakers introduced S.F. 4139, which aims to address concerns from various sectors of Minnesota’s existing gambling industry, including tribal gaming, charitable gaming, and horse racing interests.