New deal improves odds for legalized sports betting in Minnesota

The odds of Minnesota legalizing sports betting got a lot better Tuesday.

Its political supporters have negotiated a deal with one of the biggest groups opposing a bill to open the books.

The House author tells FOX 9 the deal got the chances of a bill passing the divided legislature to better than even odds.

Electronic pull tabs will get zapped next year under a 2023 law eliminating the open-all option. Tribal casinos argued that it made the games too close to slot machines. The same tribes want the state to open up sports betting at their casinos.

Charitable gaming groups that get a big chunk of money from pull tabs lobbied against it until Tuesday.

"We're still trying to figure out how do you arrange the pieces of the puzzle in such a way that everyone can live with it," said Rep. Zack Stephenson, DFL-Coon Rapids. "We're making good progress. This is a big step in the right direction. We're nowhere near done."

The House and Senate are now agreeing to raise the tax on sports betting from 10% to 20%.

Using some of that extra revenue, Rep. Stephenson negotiated a deal giving a tax cut to charitable gaming, so they can counteract any losses from pull tabs.

"Every dollar you spend on pull tabs at a bar right now, more money is going to the state in the form of taxes than is going to supporting youth hockey or veterans services or what have you," he said.

But there are still obstacles to passing the bill.

Some legislators in both parties don’t want to see any gambling expansion.

And the state’s racetracks still oppose the bill.

Running Aces CEO Taro Ito tells us the tracks have offered sports betting for 39 years, but they’d be excluded under the bill.

"Racetracks must be compensated fairly to make up for a loss of business from tribal-only sports betting," he said.

The Senate bill offers tracks 5% of the state’s tax revenue from sports betting.

And Stephenson says he’s trying to thread a needle to get enough bipartisan support to get a bill over the biggest remaining hurdles.

"I'd say horse tracks, problem gaming, and then trying to fit into the larger, budget puzzle of the whole state," Rep. Stephenson said.

The new House bill gets a hearing Thursday, and as Stephenson said, it’ll still have a long way to go from there.