The legislative journey of Minnesota sports betting took a few more turns Thursday. The framework of an existing proposal was modified significantly before passing out of the Minnesota Senate Tax Committee.
From here, that bill, SF 1949, advances to the Senate committee on finance. However, it remains to be seen if the proposed legislation is deemed workable by the rest of the Minnesota legislative bodies.
More on the Minnesota sports betting amendments
One of the first decisions made Thursday morning focused on the Minnesota sports betting tax rate. The legislation initially specified that rate at 10%. However, that was before the events of last week, when an amendment was passed prohibiting in-game betting.
As a response to that, another amendment was proposed doubling the tax rate to 20%. That amendment passed. However, even after the higher tax rate was worked in, leaders say the annual revenue potential of Minnesota sports betting is down to $18 million. Prior to the in-game betting ban, that number was $40 million (more than double that total).
In other news, the Tax Committee removed a cap on revenue proceeds for Minnesota racetracks. Previous drafts of the bill capped that number at $20 million, and those proceeds will now total 5% of overall revenue regardless of how well the industry does. However, given annual revenue estimates, that $20 million total was likely never going to be approached.
Several other amendments proposed by Sen. Scott Dibble, meanwhile, were voted down. This included installing a system where operators would bid for Minnesota sports betting licenses at a minimum 40% tax rate. That would be the second-highest tax rate in the country behind New York (which sits at 51%), and the proposal did not pass.
What’s next for Minnesota sports betting?
The Minnesota sports betting bill passing out of committee isn’t a bad sign, but there are several more hurdles to clear. Sen. Jeremy Miller, in particular, called SF 1949 “a work in progress” and said more needed to be done for charitable organizations within the state.
The ban on in-game wagering will also receive plenty of attention. One lawmaker, Rep. Pat Garofalo, referred to that provision as a “poison pill” that needs to be removed. His position may be strengthened by the numbers brought up at today’s hearing and the significant impact on annual revenue (even with a doubled tax rate).
