New Minnesota Sports Betting Bill Dedicates Majority of Revenue to Problem Gaming

Apr 21, 2023; Minneapolis, Minnesota, USA; Minnesota Timberwolves guard Anthony Edwards (1) goes to the basket as Denver Nuggets center Nikola Jokic (15) defends during the fourth quarter of game three of the 2023 NBA Playoffs at Target Center. Mandatory Credit: Jeffrey Becker-USA TODAY SportsA new Minnesota sports betting bill from Sen. John Marty (DFL-40) dedicates a majority of revenue to problem gamingThe bill requires operators to pay at least a 40% tax rateThe legislation also bans in-game sports betting

A newly introduced Minnesota sports betting bill dedicates 75% of sports betting revenue to combat problem gaming and educate students on the dangers of gaming addiction.

Sen. John Marty (DFL-40) introduced his bill, SF 5330, to the Senate this morning. The bill had its first reading on the Senate floor and was referred to the Committee on State and Local Government and Veterans.

The legislation is similar to other sports betting bills, as it gives Minnesota tribes sports betting exclusivity, but it earmarks a vast majority of sports betting revenue to combat problem gaming in the state and will require operators pay at least a 40% sports betting tax on gross revenue.

Bolstering Responsible Gaming in Minnesota

Marty’s bill will provide Minnesota sports betting exclusivity for state Indian Tribes, as do the other sports betting bills that are moving through the House and Senate committees. The following tribes will be eligible to offer sports betting:

Bois Forte Band of ChippewaFond du Lac Band of Lake Superior ChippewaGrand Portage Band of ChippewaLeech Lake Band of OjibweLower Sioux Indian CommunityMille Lacs Band of OjibwePrairie Island Indian CommunityRed Lake NationShakopee Mdewakanton Sioux CommunityUpper Sioux CommunityWhite Earth Nation

His bill, however, has several key differences between other pieces of Minnesota sports betting legislation. Marty’s bill earmarks the vast majority of sports betting tax revenue to combating problem gaming and educating young Minnesotans on addiction prevention and mental health services.

The bills distributes sports betting tax revenues as follows:

50% to the commission of human services. Half of the revenue will fund compulsive gambling treatment programs and half will be for a grant to the state affiliate recognized by the National Council of Problem Gambling to be used to increase public awareness of problem gambling, provide education and training25% to the commission of education for grants for addiction prevention and mental health services in public and charter schools25% to the general fund

His bill dedicates no funding for Minnesota horse tracks, which has been a large point of contention for the past several years. Track representatives have fought tribal exclusivity for sports betting and have petitioned for their own sports betting licenses, or at least a higher percentage of tax revenue earmarked for their facilities.

Marty’s bill does neither of those things.

Marty has long held the opinion that sports betting will not be a large revenue driver for the state and will only add taxpayer costs to treat gaming addiction. His bill certainly addresses those concerns with the majority of sports betting tax revenue being dedicated to combating problem gaming and educating young people in Minnesota about the dangers of addiction.

As chair of the Senate Finance Committee, I don't see legalized sports betting as a big revenue source for the state. I see the reality we face: huge additional costs to taxpayers in mental health and addiction problems. #mnleg #sportsbettinghttps://t.co/2imEXKq8LW

— Senator John Marty (@JohnMarty) March 14, 2024

Competitive License Bidding Process

The commission of public safety will issue licenses to platform providers, such as DraftKings or FanDuel, following a competitive bidding process. Applications for licenses will be due six months after the effective date of the legislation and operators will be required to pay at least a 40% sports betting tax rate on gross gaming revenue.

Each operator will submit a competitive bid package for licensure in the state. The commissioner will evaluate the following factors in their bid packages:

Tax rate willing to pay (at least 40%) and an estimation of overall online sports betting gaming revenue generatedNumber of operators the applicant will host on its online sports betting platformA description of geolocation technologyDemonstration that the applicant possesses the necessary qualifications to provide online sports bettingList of jurisdictions where the operator is liveA model for player acquisition and how operators will convert players from illegal sports betting channelsProposed timeline for sports betting launch after being awarded a licensePlans for integrity monitoring and reporting

Any operator with a license must provide a mechanism for users to set limits on how much they can deposit within a specified period, a limit on losses within a specific period, and a limit on time spent playing bets.