State Senator Matt Klein’s sports betting bill, SF1949, has had several amendments added before the Senate Tax Committee of Minnesota advanced the legislation to the Senate Finance Committee for further consideration.
Tax Hike
The Minnesota legislature is getting closer to bringing sports betting to those residing in the North Star State after a tax committee made several alterations that could make it more palatable to those lawmakers who are on the fence.
Some of those changes include banning in-game betting to protect those with gambling problems while also allowing bettors to set voluntary limits on how much money they can bet in one day. But both measures would have an adverse effect on revenues, lowering the projected annual tax stream on sports betting from $40 million to $18 million.
“You can’t sort of bet in the first quarter and then bet again in the third quarter on the same game,” says Senator Matt Klein, DFL-Mendota Heights. “You have to have all your wagers lined up before the whistle blows and you’re done for that game.”
That revenue shortfall includes another amendment that doubles the tax rate on the sportsbooks’ adjusted gross revenues from 10% to 20% which made some Republican lawmakers wince. Nevertheless, the changes are expected to enhance the prospect of getting the bill passed and ultimately launching sports betting in Minnesota.
The bill’s sponsor, Senator Matt Klein, understood the need for compromise, and after learning of the amendments, said, “The changes made in Senate Taxes Committee today have made this a better bill for Minnesotans. I am thankful for the committee’s thoughtful consideration of this legislation and willingness to work toward the best balance of needs and interests.
Revenue Allocation
The allocation of resources generated from the sports betting revenues was also amended and the alterations see the money dispersed as follows:
- 20% for tax relief for charitable gaming organizations.
- 10% for treatment and awareness programs for problem wagering.
- 15% for Explore Minnesota Tourism to bolster large sporting events.
- 5% to the Minnesota Racing Commission for racetracks.
- 5% for the Minnesota State High School League to support youth sports and activities.
- The remainder is to be allocated to the general fund.
“We need to do more for our charities,” says Sen. Jeremy Miller, R-Winona. “I’ll also continue to advocate for more money and more flexibility for the horse racing tracks to enhance the horse racing industry here in the state of Minnesota.”
The bill’s legislative journey is far from over and will need additional scrutiny in both the House and Senate before it is sent to Governor Tim Walz for his signature. All reports indicate the governor will sign the legislation when it reaches his desk.
