A brief letter from a major player in the world of legal gambling has changed the politics around the issue of sports betting in Minnesota. At least for now.
Last week, Charles Vig, the chair of the Minnesota Indian Gaming Association, wrote Gov. Tim Walz and the four legislative leaders to say the state’s gambling tribes weren’t interested in adding sports betting to their offerings.
But he didn’t stop there. In the letter, Vig said the tribes will oppose passage of legislation to add Minnesota to the growing list of states with legalized sports betting. “The Minnesota Indian Gaming Association continues to oppose the expansion of off-reservation gambling, including the legalization of sports betting,” he wrote.
The seven casino-owning tribes in Minnesota join a group of unusual allies in opposing sports betting bills this year, including groups like Citizens Against Gambling Expansion, which worries about the ill effects of gambling, including addiction.
The tribes don’t have a veto over non-tribal gambling, but their voices are influential, especially among DFLers like Gov. Tim Walz and the new House majority. Under federal law, states must bargain in good faith to permit tribes to offer the same types of gambling that is legal off-reservation.
Until a U.S. Supreme Court decision last spring cleared the way for states to offer sports betting similar to what is legal in Nevada casino sports books, that law wasn’t an issue in Minnesota. Now it is. By a 6-3 majority, the court ruled in Murphy v. NCAA that Congress exceeded its authority by preventing states from legalizing and regulating sports betting. The case had been brought by New Jersey, which wanted to give a boost to its struggling Atlantic City casinos, and had tried a series of legal moves to end the federal ban against sports betting in all states except Nevada.
In the majority opinion, Justice Samuel Alito, Jr. wrote that Congress has the authority to pass legislation to regulate sports gambling itself. But if it decides not to, each state is free to do so, and many have already done just that.
A draft bill circulated at the Minnesota capitol at the end of the 2018 session but no formal bill was ever filed and no hearings were held. Supporters of the legislation, led by Sen. Roger Chamberlain, R-Blaine, have been preparing a bill for this session,.
Chamberlain, who is chair of the Senate Taxes Committee, was surprised and a bit disappointed in the tribes’ position, which he found out about via Twitter. “We met with them and while they’re not necessarily in alignment they are obviously concerned about losing their economic base, the economic engine,” Chamberlain said. “We understand that. We’ve reassured them that we’re not interested in harming that interest or jeopardizing tribal compacts.”
But Chamberlain said he is optimistic that it remains subject to negotiations, and he said he thinks it could be a win for the state, the tribes and for non-tribal gambling. “There’s no reason to shut out the rest of the state and the rest of the potential consumers and players and operators from taking part in a perfectly safe and legal business,” he said. “We hope to get to a place where everyone can agree and I think we can.”
While it appears clear that tribes would be able to offer sports betting in their casinos if it is made legal for non-tribal gambling, legal advisors note that sports betting sets up some hard choices for tribes. The first issue is that betting on sports — on the results of games, on scores and other outcomes — isn’t especially lucrative for casinos. The other is that under federal law, tribes can only offer gambling within the boundaries of reservations. That makes the most-promising aspect of sports betting — remote betting online or via mobile devices — might be off limits to them, but not to non-tribal sports books.
Chamberlain said mobile betting must be part of the state law because that is where much of the betting action is. Part of the rationale for legalizing it state by state is to capture some of the bets now made illegally.
“In this economy and culture you need mobile access to be profitable,” Chamberlain said.
Online betting would also make gambling available in rural and remote parts of the state that might not have casinos or commercial sports books nearby. One possible solution for the tribes is to declare that the gambling takes place not where a player’s phone is, but where the computer server that processes the bet is located. That is far from resolved law, however.
“We can find our way around these problems and get it done,” Chamberlain said.
Vig is chairman of the Shakopee Mdewakanton Sioux Community of Minnesota, which owns the Mystic Lake and Little Six casinos, did not close the door on eventual tribal interest in sports betting. He did, however, ask the state to move slowly.
“While there is a desire by some to consider this matter during the present session, it seems that the public interest would be best served first by careful study of sports betting’s implications in this state, examination of other states’ experiences where sports betting has been legalized, and thorough consultation with the large number of stakeholders interested in it,” Vig wrote.
The chair of the House committee that would consider any sports betting bills said the tribal association’s letter doesn’t change her position on the issue. Rep. Laurie Halverson, DFL-Eagan, said there are still no sponsors within her caucus pushing a bill. Ever before the tribes made their position known, Halverson said she intended to be cautious and deliberate on the subject.
“I have yet to see language or have anything introduced,” she said.
But she expects legislation will surface, and she wants to have at least an information hearing so lawmakers can understand the impacts and hear from both backers and opponents. “I think we’re all in learning mode,” she said. “When something is this new, that’s the legislative model typically. Things take time and we need to be deliberative about such major changes to Minnesota law.”
At a press conference Wednesday, Walz said his basic position on the issue is to legalize and regulate. But he said that should come only after a process of hearings and discussion. “I trust adults to make adult decisions,” he said of gambling. “I also recognize that addiction comes in many forms, whether that be alcohol, tobacco or cannabis or sports betting and these can have societal consequences that are pretty devastating.
“If the Legislature chooses to take that up, we’re certainly interested in working with them to get it right,” Walz said.