There was a groan around the Christmas table as I told my 20-year-old nephew what I wanted to say in this column:
Minnesota lawmakers should take a moment and wait at least another year before legalizing sports betting.
I initially thought I was in favour, I told them. But it doesn’t make life better for anyone, so there should be no rush. And after listening to people in the industry, it was clear that none of the companies that could benefit greatly from sports betting are based in Minnesota.
My nephews didn’t buy it. Your life will be more fun, they said. I should side with the consumer, they added.
Many Minnesotans want to use sports betting apps on their cell phones, as is possible in all the states and provinces that surround us. In a KSTP-TV poll last spring, 57% of respondents said Minnesota should allow it. Since a Supreme Court ruling in 2018 gave states authority over sports betting, more than 30 states have legalized some form of it.
The 11 Tribes of Minnesota have had the exclusive right to operate casinos in the state since 1991. So why, I wondered, did they suddenly reverse their initial opposition to sports betting over the past year?
Tribal officials say they know Minnesotans want sports betting. While they suspect they’ll lose revenue if people switch to sports games at their casinos instead of video slots and table games, they said there’s a sense of inevitability that got them into the legislation debate.
At both the state’s casinos and two racetracks, the odds of sports betting are likely to be small. Unless they develop their own apps, they have to work with the big platform providers like DraftKings and FanDuel, who give them a tiny share – probably a single-digit percentage – of total sales.
There is little data on the impact mobile sports betting has had on existing casinos and circuits, or on people in other states. Taro Ito, general manager of Running Aces, the Columbus racetrack and resort, believes this will be “very negative” for his business.
“People only have a certain amount of disposable entertainment dollars,” Ito said. He added that the question for him is, “Are we losing a lot or really a lot?”
According to a spokesman for the Sports Betting Alliance, the trading group of platform companies, some Minnesotans are already betting on sports using apps that bypass territorial restrictions. A key reason lawmakers should legalize sports betting is that Minnesota companies “compete with illegal offshore sports betting,” he said.
But many social and religious organizations, recovery centers and academic researchers warn that making gambling so ubiquitous is exploitative and harmful.
That’s all true. And yet I’m inclined to make it legal in hopes that people will realize the risks that always-available gambling entails. But I’d like to see more data on the impact elsewhere first. I see no reason for the legislature to act quickly.
The tribes last year backed a sports betting bill created by DFL-Coon Rapids Rep. Zack Stephenson, who only licensed them. They resisted a Senate measure that would have licensed the two racetracks.
Those bills went nowhere in election year. Stephenson is ready to reintroduce his measure. Senator Karin Housley, Republican No. 2, will likely lead a version there. It’s an issue that doesn’t cut cleanly across party lines, with opponents and supporters in both parties.
Stephenson suggests that the taxes Minnesota levies on sports betting, after paying regulatory oversight, will be used to combat gambling addiction and fund youth sports, particularly in high-crime areas. (He is a Hennepin County prosecutor when the legislature is not in session and knows a lot about juvenile delinquency.)
But, he noted, the amount wagered on sports is far greater than the revenue it generates for corporations and the taxes it generates for government.
“It’s unlikely to be a huge revenue stream for anyone,” Stephenson said.
He wants to continue restricting sports betting licenses to casinos. And that upsets Ito at Running Aces.
“What we need is parity,” he said.
Executives at Canterbury Park, the racetrack in Shakopee, will present their views as early as Wednesday. Canterbury Park’s 10-year financial relationship with the Shakopee Mdewakanton Sioux Community appears to be nearing an end. This could bring a shock to Minnesota’s gaming scene that will affect more than just sports betting.
Stephenson said he was in no rush and wanted to make sure any expansion of gambling in Minnesota was “done well and correctly.” But he said: “A lot of work has already been done, which makes it easier, even while we take care of everything else, to move this sports betting law forward.”
Evan Ramstad is the Star Tribune’s new business columnist. He has been the newspaper’s deputy business editor since 2013. He previously worked for the Wall Street Journal, St. Paul Pioneer Press and Associated Press.
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