Sports betting bill, charitable tax relief fail to pass Legislature

ST. PAUL — The sports betting bill containing tax relief for charitable gambling failed to pass the Minnesota Legislature on Sunday night. Also failing to get over the finish line were increased values for the disabled veteran market value exclusion.

The sports betting bill passed out of the House Ways & Means Committee on Friday, May 10. Now numbered House File 5274, it awaited a hearing on the House floor on Wednesday, May 15. That never came. It was rescheduled for Friday, May 17. Nothing.

As for the disabled veteran market value exclusion, it was stripped out of tax bill by the tax conference committee.

“Sports betting is not going to happen,” said American Legion Legislative Chairwoman Kristy Janigo, who watched the proceedings from the Senate Gallery at the State Capitol. “We put in some valiant effort including some last ditch things the past few hours. We won’t have our charitable gambling tax cuts. Next year we need to watch our numbers closely to assess how much the e-tab changes affect our revenues.”

Rising e-pulltab revenue has helped licensed gambling operations offset inflation and still keep programs going. However, in the 2023 legislative session, state lawmakers passed a tax omnibus bill that stripped many features from e-tab games — open-all buttons, free plays and bonus games. This was done under the premise of e-tabs appearing  too much like slot machines. However, slot machines have unlimited jackpots, variable prize structures and unlimited bets. To anyone who has played both, it was clear they were not at all like e-tabs. Nevertheless, one side of the aisle pressed ahead with last-second shenanigans and got it across the finish line. Many lawmakers later claimed they didn’t know what they were voting on.

The changes go into effect in January 2025. Without the tax relief, many gambling operations could struggle to donate to their causes in the same levels they had before.

The sports betting bill, if approved, would have provided relief for charitable gambling estimated to be $7 million the first year, $24 million the second and $40 million onward. It included language to allow posts to use more of their net receipts to fix their buildings.

Janigo said a measure to allow disabled veterans to get into the University of Minnesota Landscape Arboretum did pass.

The impression made in one session often translates over to the next. Janigo hopes the tax cuts can be accomplished in the 2025 session.