Online Sports Gambling Bills Approved by Minnesota Committee

The Minnesota house legislative committee recently announced the adoption of two bills that permit online sports gambling.  The web-based sports gambling will be operated by the Native American tribes that are federally recognized.  At the moment, Minnesota has nearly a dozen such tribes.  The shift toward online sports gambling in Minnesota is a bullish indicator for sports gambling investors and also constitutes a victory for those looking to place wagers on professional and collegiate sports events.

The progress made toward legal online sports gambling in Minnesota is important as the outlook for legalization wasn’t bright merely one year ago.  Rewind to 2021 when Minnesota senators introduced legislation to allow both web-based and retail sports gambling and there was a significant backlash.  

The proposed bill made its way to the Committee on State Government Finance and Policy and Elections yet never progressed to a vote.  However, this original bill did not contain language mentioning retail and web-based sports gambling.  Rather, the prior version permitted tribal operators and racetracks to apply for sports gambling licenses.

About The Bills

The state’s Committee for Finance and Policy recently wrapped up its review of a somewhat controversial tribal and commercial bill containing language to legalize online sports gambling.  The bills are House Bill 778 and House Bill 167.  It is particularly interesting to note the bill originally had nothing relating to sports gambling.  Rather, the language of the bill originally pertained to sentencing hearings.

The committee elected to amend each of the bills, generating identical legislation to legalize sports gambling by the tribes described above.  Both of the bills permit two master sports gambling licenses that are to be granted to organizations consisting of two or more Native American tribes.  

One of the licenses will be provided to an entity that has its headquarters slightly to the south of Highway 94.  Another license will be provided to a tribe located to the north of the Interstate Highway.  Readers will find it interesting to know that Interstate 94 begins at the border of Wisconsin by Minneapolis and heads northwest toward Fargo, North Dakota.

Master License Details

The master licenses referenced above will last for two full decades.  The holders of the master licenses are empowered to partner with mobile sports gambling operators that are required to be owned by Native American tribes.  It is at this point that the organization can apply for its own license.  The language of the bill also states the master licensee at the northern location is empowered to partner with upwards of seven tribes.  The southern licensee is eligible to partner with upwards of four tribes.

All in all, seven of the eligible tribes are positioned to the north of I-94.  Exactly four of the tribes are located to the south.  This setup means each of the tribes has the opportunity to generate revenue from sports gambling ventures.  However, the catch is the tribes are required to pay a yearly $2,125 sublicensing fee.  The tribes are permitted to partner with a single platform provider.  However, the specific tax rate for the bills has not yet been decided.

When Will The Bill Go Into Effect?

The bill detailed above will not go into effect until the state’s governor negotiates tribal compacts with the individual tribes to allow Class III sports gambling.  This process will take some time as the state has nearly a dozen eligible tribes.  

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