You could almost hear the air escape from the lungs of lobbyists working for the sports betting industry and the state’s tribal governments.
The letdown happened as the Senate Commerce Committee adopted an amendment to a sports betting bill that already is struggling to find majority support. The amendment, offered by Sen. Jordan Rasmusson, would have prevented the big national sports books from accepting in-game bets, known as prop bets.
Instead of betting which team will win a game or make it to the playoffs, prop bets happen within a game: Which team will score first? Would a batter fresh off of a first home run hit a second? Even, how long will it take Reba McEntire to sing the National Anthem at the Super Bowl? (It was 90.5 seconds this year).
Rasmusson, R-Fergus Falls, argued that such wagers pose a danger to bettors at risk of gambling problems and gambling addiction. Responding to the sports books’ frequent pitches, often in the form of cellphone push notifications, to wager on an at-bat or a series of downs in football is especially tempting and leads to what is termed “loss chasing” or betting more to recover from lost bets earlier in a game.
“In-game betting is one of the most problematic for problem gamblers,” Rasmusson said. “It can take a single sporting event and turn it into hundreds of betting opportunities.”
The in-game betting ban — sometimes called whistle-to-whistle betting — was combined with other changes offered by Rasmussen, such as one to require bettors on each platform like DraftKings and FanDuel to set self betting limits before they can place wagers. Once limits are set — say $100 a day — there would be a waiting period before any increases would take effect.
The amendment passed with the support of Senate File 1949’s chief sponsor, Sen. Matt Klein, DFL-Mendota Heights. He said the changes would make Minnesota’s sports betting system “the safest in the United States.”
But what Klein calls safe worries the big sports betting companies. While they don’t oppose measures pushed by states to respond to addiction, killing off in-game betting would likely cut the betting action on the states in half, the industry lobbyists said Tuesday.
Minnesota would be the only sports betting state in the U.S. with such a ban.
“Those wagers account for over 50% of the sports wagers made in the U.S. Market, a number that we expect to grow to 75% by 2030 based on the experience in Europe,” said Jeremy Kudon, the president of the Sports Betting Alliance whose members make up 80% of the legal sports betting industry in the U.S. They are FanDuel, DraftKings, BetMGM and Fanatics.
He called the amendment a gift to illegal sports books that operate online sites that he said have 1 million players in Minnesota.
“Rather than drive these illegal operators out of the state, which would have been true prior to the amendment of the bill, it will make these sites more popular than ever,” Kudon said. It could also reduce the expected tax revenue in half, he said, cutting money that now would go to the racetracks, youth sports or problem gambling.
Andy Platto, the executive director of the Minnesota Indian Gaming Association, said the amendments caused concerns, but he asked that the bill be moved along to the Senate Judiciary Committee in order to keep the discussion moving. The bottom-line position of the tribes, however, remains the same: exclusivity for tribal gaming.
The conflict over in-game betting is the latest hitch for legalized sports betting, whose politics are complicated and don’t fall along party lines. Those concerned with its effects on gambling addiction think in-game betting is dangerous; those who run the sports books say it is necessary for the profitability of the business.
“Gone are the days when gambling was based on the result of the game, total points, or who would score the most points,” wrote Mark Gottlied, executive director of the Public Health Advocacy Institute in a letter to Rasmussen. “Rather, gambling companies and their sports business partners have found that they can dramatically increase revenue by encouraging customers to engage in constant and non-stop wagering.”
Another amendment offered by Rasmussen did not pass. It would have made it illegal for the sports books to offer gambling on college sports. Other states do ban bets on college sports or ban bets on in-state college teams or ban prop bets on college sports.
The audience for the amendments wasn’t really Klein. He supports the bill as it was presented to the committee. The target was the state senator sitting behind Klein during the hearing. Sen. John Marty, DFL-Roseville, has been a hard no on any expansion of gambling because of fears that it would harm low-income people and people of color.
But he has said he might be open to compromise if his concerns about the ill effects of gambling are addressed. That would give Klein 33 DFL votes. But he needs 34, and Sen. Scott Dibble, DFL-Minneapolis, is still not supporting sports betting.
“I’m not anti-gambling,” Marty said. “I’m more libertarian in terms of adults doing what they want. The problem is when a predatory industry steps in and encourages it to make money off of that.
“That’s the real risk here,” he said.
Afterward, Marty said the Rasmussen amendment is important for him but he said the bill has “a ways to go yet” and that the bill is still short of a Senate majority. An earlier version passed the state House last year, and bill sponsor Rep. Zack Stephenson, DFL-Coon Rapids, said he is waiting to see if Klein can pass a bill before he takes it up again.
“It’s one of many things we should be doing to protect against compulsive gambling,” Marty said. “It’s highly addictive and the numbers are just very high.”
Will the bill end up with in-game betting disallowed? There are so many permutations of the bill — none yet attracting a majority in the state Senate — that guessing what a final bill looks like is hazardous. But the Tuesday amendments illustrate the push-pull dilemma of backers: Seemingly every change that gains votes to bring it closer to a majority in the Senate, also loses votes and moves it the other way.
It was a 2018 U.S. Supreme Court ruling that opened the door to state-by-state decisions on sports betting. As of now, 38 states and the District of Columbia have legal sports betting, although rules vary widely.
The basics of the bill in Minnesota — and the basic problems with the bill — remain after Tuesday’s committee action. The bill gives the 11 tribal nations exclusive control over sports betting, though they are expected to contract with one or more of the big national sports books to operate games. The tribes will collect all revenue for bets made in brick-and-mortar betting parlors in tribal casinos, and there would be no state taxes collected. Any bets made via cellphones outside of reservations would be liable for state taxation — 10% on the amount bet minus what is paid out in winnings to players.
The proceeds of that taxation would go to a variety of causes including youth sports promotion, problem gambling treatment and education and subsidies for the two horse racing tracks — Running Aces in Columbus and Canterbury Park in Shakopee. But while the tracks would gain $20 million in the first few years, the annual support would drop to $3 million a year after that, an amount considered too little to help the struggling horse racing industry.
Tracie Wilson, the chief financial officer for Running Aces, said no other gambling entity in the state would have their share capped even as sports betting attracts more betting and raises more money.
Peter Callaghan
Peter Callaghan covers state government for MinnPost. Follow him on Twitter @CallaghanPeter or email him at pcallaghan@minnpost.com.
