The people trying to craft a bill to bring sports betting to Minnesota seven years after the U.S. Supreme Court turned the issue over to the states thought they’d finally found a deal.

After failing to find a way to bring all of the pro-gambling interests into agreement, backers that included national sports betting companies, tribal nations, horse racing tracks and charitable gambling finally produced a compromise last year.

“This bill for the first time enjoys the support of the previous combatants,” said prime sponsor, Sen. Matt Klein, DFL-Mendota Heights, during a hearing last week. “There are other sports wagering bills before this committee. None of them enjoys the support of the coalition I have described.”

So why did that bill fail on a tie-vote in its first committee stop of the 2025 session? While betting clichés abound on this issue, could bill backers have overplayed their hand? After last week’s failure, it is now possible that backers worried too much about splitting the profits among gambling interests and too little about anti-gambling forces. The six lawmakers who voted no last week in the Senate State Government Committee were an unlikely alliance of some of the Senate’s most-liberal and most-conservative members.

“I do not trust a predatory industry, especially the tech industry,” said Sen. Erin Maye Quade, DFL-Apple Valley. “Every single thing on our phones — from the notifications to the endless scroll functions — were modeled after the most addictive parts of gambling.”

And this from Sen. Steve Drazkowski, R-Mazeppa:  “Knowing it’s going to create a societal problem, we tax the industry we’re allowing in the bill, we pile that money up in government and develop programs with the hope that the government will solve the problem we created with the bill.

“Members, I call that insanity,” Drazkowski said.

Should have been easy?

When Klein’s  Senate File 757 came to a vote, it failed to advance out of the State Government committee on a 6-6 vote. Voting no were two DFLers and four Republicans. Voting yes were five DFLers and one Republican. Even one of the yes voters said he did so with trepidation.

“I’ll be voting yes but with so much pain and anguish,” said Sen. Steve Cwodzinski, DFL-Eden Prairie, who called it one of the three hardest votes he’s taken since joining the Legislature nine years ago. While he said he has reservations, he thinks voters in his district want it to pass.

Failing in its primary committee means the bill itself is dead, but not the issue. There are other bills having to do with sports betting that can be used to revive it. But Klein said afterward he did not have a plan yet to continue the push.

“It should have been easy, but it was hard,” Klein said after the vote. “People have legitimate concerns and weren’t ready to move forward today. I’m not sure where we go from here.”

But the vote last week suggests there is a new equation in the complicated math on the issue: It is possible that adding tribal supporters to horse track supporters no longer equals a majority of the House and Senate. And changing the bill to bring in those concerned about mobile betting and the power of the big sports betting corporations could subtract support from the coalition Klein referenced.

Bills in the last six sessions have failed because they either favored the tribes and not the tracks, which cost them GOP support, or favored tracks and not the tribes, which cost them DFL support. Klein had tried to work with gambling foes last year as a way of passing a DFL-only bill that excluded the tracks and the GOP votes they influenced. But that need went away with the bipartisan bill sponsored by Klein that emerged at the end of the 2023 session.

The package preserves the No. 1 priority of the state’s tribal nations: that gambling should be an exclusive offering of the tribes. Outside of some charitable gambling and betting at the two horse racing tracks, tribes have a monopoly. That, they argue, is justified by the fact that they use the money for the good works of the tribal nation and not for commercial profits.

To that end, the tribes insisted that the tracks not be able to offer sports betting. The Klein bill keeps the tribes at the table but also uses revenue from taxation on sports betting to get more money to the tracks and the charities. And it creates a fund to help smaller and rural tribes that might not make as much from sports betting as metro-area tribes.

Klein’s bill includes consumer protections and what he has called some of the nation’s strongest checks on the sports books’ attempts to keep troubled gamblers betting.

But it is the corporations that own the sports books — the FanDuels and Draft Kings and BetMGMs of the betting world — that will handle the betting and likely make most of the revenue. The sports books have become a top target of opponents. Senate Finance Committee Chair John Marty, DFL-Roseville, held an entire hearing earlier this year to look at predatory practices of those companies and the financial and social harms they cause for players and their families.

Marty has his own bill that allows sports betting but contains the strictest controls in the nation. While that bill likely lacks support as well, it illustrates the concerns raised by opponents. 

Skeptical of sports books

The response from backers of the bill to concerns about legalizing sports betting is, “Yes, but.” That is, yes there are valid concerns about problem gamblers and people suffering unaffordable losses. But illegal sports books already exist, proponents argue, and are being used by Minnesotans already. So isn’t it better to bring them under a legal and regulated and taxed system than an illicit one?

“People in very large numbers are gambling on their phones currently,” Klein said. “It’s probably happening among the members of this committee and the members of our audience frequently and in increasing numbers. And they are on unregulated, off-shore platforms that produce no revenue to the state and have no limits on underage youth or problem wagering.”

While it is a goal of legalization, use of illegal books did not fall in Massachusetts after state-regulated betting began. And opponents say there is evidence that it will increase as bettors seek better odds and fewer restrictions.

Since the issue emerged in 2018 after the court ruling in Murphy v. NCAA, there have been members of the House and Senate who were opposed to expanding gambling in the state — for moral reasons and because the gambling losses fall more heavily on low-income people. But there is now growing concern over the predatory practices of the big national sports books.

Last week, for example, Draft Kings was sued by a Pennsylvania psychiatrist who lost more than $400,000. Kavita Fischer was featured in a Wall Street Journal article that looked into the use of VIP hosts that target big players with special offers that ignored her growing losses and signs of addiction.

Some opponents simply oppose mobile betting as opposed to sports books inside physical casinos on tribal lands. In-casino sports betting, Maye Quade said, requires players to go somewhere. Mobile sports betting puts the casino in people’s hands, she said. And the business model for the industry is that “not everyone who could be addicted to gambling is addicted to gambling.” And despite claims that the bill protects consumers and responds to problem gambling, she said it isn’t enough.

“If the industry likes this bill, it’s probably not good because it is the lack of protections that make them money,” Maye Quade said.

Peter Callaghan

Peter Callaghan covers state government for MinnPost. Follow him on Twitter @CallaghanPeter or email him at [email protected].

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