Sports-wagering bill stalls in Senate committee

ST. PAUL — New e-pulltab requirements went into effect on Jan. 1, 2025, and in the first month, revenue from e-tabs are down 18 percent from the prior year, according to Gambling Control Board figures.

Allied Charities of Minnesota Director Rachel Jenner told lawmakers just that on Thursday during a hearing about the sports betting bill. Last year’s bill had tax cuts for sports betting. This year’s iteration gives a rebate of online sports betting to various groups, including the 1,155 licensed charities like Legion and VFW posts.

“The recent changes in 2023 legislation has had a significant impact on our electronic pulltab games, which generates the majority of our revenue. The removal of such features like the open all, bonus and game animations have led to a nearly 20 percent decline in revenue. In just one month, many organizations saw thousands, if not tens of thousands, of dollars in monthly revenue disappear,” Jenner told the Senate State & Local Government Committee.

The sports betting bill is SF757. On Thursday, it received a hearing followed by a 6-6 vote in the State & Local Government Committee. The vote was not along party lines.

After lengthy debate, Sens. Tou Xiong of Maplewood, Andrew Lang of Olivia, Heather Gustafson of Vadnais Heights, Jim Carlson of Eagan, Steve Cwodzinski of Eden Prairie, Ann  Johnson Stewart of Wayzata voted yes to forward the bill to the Judiciary Committee.

Erin Maye Quade of Apple Valley, Calvin Bahr of East Bethel, Steve Drazkowski of Mazeppa, Justin Eichorn of Grand Rapids, Omar Fateh of Minneapolis and Mark Koran of North Branch voted no.

Lang, who shares the chair power with Xiong and ran this hearing, announced the bill had stalled. This means it isn’t dead and could be brought back later for another hearing and vote.

Senate File 757 allows exclusive online sports betting through the 11 tribes within Minnesota. Sen. Matt Klein of Mendota Heights is the chief author.

The bill faced opposition from the Catholic Church and the Minnesota Family Council. The debate mainly was centered on good and bad that comes from gambling, along with discussions of self-determination.

The main point Klein made is that sports gambling already happens via offshore websites, and a majority of Minnesotans say they want a sports betting bill.

(A KSTP poll in May if 1,853 registered voters said 55 percent favor legal sports betting and 21 percent said it should remain illegal. The remainder was “not sure.”)

Minnesota remains one of 11 states without sports betting. Missouri has legalized it, but it isn’t operational yet. Minnesota is surrounded by states that allow it either at sites only (such as casinos) or through online sportsbooks.

Klein listed many of the groups that support SF757: senators from both parties, 11 tribes of Minnesota, Canterbury Park, Allied Charities of Minnesota, pro sports teams and even some groups who opposed it last year.

“There are other sports wagering bills before this committee this year. None of them enjoys the support of the coalition I have described,” he said.

Minnesota, he said, has learned many lessons from other states.

“If Senate File 757 is enacted, it will be the safest sports wagering bill in the nation,” he said.

Minnesota American Legion Legislative Chairwoman Kristy Janigo described the Legion’s strong support for last year’s sports betting bill and its tax cuts for charitable gambling.

This year’s bill, she said, is slightly different in that it doesn’t require a sunset on a provision allowing Legion, VFW and Amvets posts to repair their buildings with charitable receipts.

“There are 537 American Legion posts throughout Minnesota, and 193 of them have charitable gambling operations. Those operations account for roughly 10 percent of all charitable gambling in Minnesota,” she said.

“While some say, ‘Oh, it’s just gambling.’ We respectfully disagree. Charitable gambling is inextricably linked with crucial emergency support for veterans.”

She noted how posts will use charitable gambling funds to assist the efforts of county veteran service officers to get veterans back on their feet — veterans who face homelessness, substance abuse problems, food insecurity and justice involvement.

Janigo said government programs help in certain situations, but some of them take months and gambling dollars can act fast to address problems immediately.

“These funds are a big part of how we reached an effective end to veteran homelessness last fall in Hennepin County, with Ramsey County and the state of Minnesota as a whole soon able to make such a declaration,” she said.

Other groups speaking in favor of SF757 were Minnesota Indian Gaming Association, Canterbury Park, Coalition for Fantasy Sports and Minnesota Horsemen’s Benevolent & Protective Association.

Senate File 757 can be found here. Article 7 contains rebates for licensed charitable gambling organizations. However, to understand Article 7, read Article 2 first. It explains the tax mechanism.

The way it works is the state will tax sports betting at a rate of 22 percent on wagers placed online. (Wagers placed on Indian lands are not subject to state taxation.)

Of the state tax revenue, 45 percent will be appropriated to the 1,155 licensed charitable gambling organizations. This is commonly called a “rebate.” The amount distributed will be pro-rated by each license holder’s revenue.

The bill also allows posts of congressionally chartered veterans organization to use charitable gambling funds to make repairs to capital assets. The current version gives a five-year window. Janigo said she hopes to remove the window altogether, and to increase the amount allowed for meals for veterans and their spouses.

Future iterations of the bill might remain tax rebates or could return to the tax cuts proposed last year.