HINCKLEY, Minn. — Amid the flat woodlands of east-central Minnesota, the Grand Casino stands out: Its hotel is the tallest building between the Twin Cities and Duluth. The casino floor beckons players with more than 1,900 slots and blackjack and poker tables around the clock.
With a golf course, an RV park and an amphitheater that has featured artists from Aretha Franklin to Peter Frampton and Toby Keith, the Ojibwe-owned compound is a gambling destination with just about everything.
Except for sports betting.
Minnesota is an outlier in the area. All neighboring states allow gambling on sporting events, although their policies vary widely.
Nationally, 36 states and the District of Columbia have legalized sports betting since the U.S. Supreme Court struck down Nevada's monopoly on sports betting in 2018. According to the American Gaming Association, an industry lobby group, Americans bet $93.2 billion on sports in 2022. generating $7.5 billion in revenue for regulatory jurisdictions.
In Minnesota, the push to join them continues. But first, the state should resolve an issue that has plagued other states: Tribal casinos, which have long enjoyed a monopoly on legal gambling in Minnesota, should be the only places through which gamblers can gamble. in games?
As the legislative session heads into session, lawmakers on both sides of the aisle have introduced bills that would legalize sports betting statewide, which polls show have widespread support. Whether a bill makes it to the May 22 finish line depends not so much on the merits of betting, but on the ability of lawmakers to overcome this long-standing issue.
Democrats, citing the financial support casinos provide to the state's 11 dominant tribal nations, want sports betting only at the state's 19 tribal casinos. Republicans say two metro area racetracks, professional sports teams and major sporting events should be allowed to offer sports betting.
A bill proposed by Democratic state Rep. Zack Stephenson, which has the support of tribes and the state's professional sports franchises, is the clear front-runner. He said it would bring in the billions of dollars now being spent illegally online or legally in other states.
Stephenson's bill would authorize casino and mobile sports gambling. Tribes will be licensed to open sportsbooks, areas in casinos that allow players to bet on sporting events around the world. The tribes will also get a license to offer betting on mobile apps, likely through a national sports gaming company like FanDuel or DraftKings. The state has no commercial (non-tribal) casinos.
“We have a strong black market here. People are just using shady websites, digital solutions and other means to place bets,” Stephenson said during a hearing in March. “This is this bill to create a legal market that will displace this illegal market and thereby provide consumer protection and ensure the integrity of the game and curb money laundering and other illegal activities.”
Stephenson also drew bipartisan laughter when he quoted Republican sports betting supporter state Rep. Pat Garofalo: “No Minnesotan should go to Iowa to have fun.”
Minnesota is one of six states with active or pending sports betting legislation, according to the American Gaming Association. The others are Hawaii, Missouri, South Carolina, Texas and Vermont. May marks the fifth anniversary of the US Supreme Court ruling that allowed states to offer betting on sporting events.
A Midwest Outlier
Casinos straddle Minnesota's borders in several neighboring states, although state policies vary.
Iowa was an early adopter of sports betting. Located at the first Interstate 35 exit from Minnesota, Diamond Jo Casino opened in 2019. Surrounded by miles of farmland, the casino has partnered with FanDuel.
It offers traditional betting windows plus 20 electronic kiosks, which extend betting hours. Through March of the 2023 fiscal year, which runs through June, the casino generated more than $52 million in wagers and brought in another $195 million in mobile and other online bets.
The Hawkeye State, which taxes betting receipts at 6.75%, has taken in more than $1.25 million from the rural casino so far in fiscal 2023. For the state's 19 licensed casinos, total tax revenue is more than $10.4 million .
In South Dakota, voters overwhelmingly approved sports betting in the Old West tourist town of Deadwood in 2020. In 2022, nearly $7.2 million was wagered at Deadwood sports books, according to trade publication SportsHandle.
Two South Dakota tribal casinos near the Minnesota border also offer sports betting under tribal agreements with the state. Mobile betting is not allowed statewide, and a bill to bring the issue before voters died in the state House in February amid concerns about gambling addiction and disagreements over how to expand mobile sports betting.
North Dakota allows sports betting and mobile apps at tribal casinos, including the Dakota Magic in Hankinson, 13 miles west of the Minnesota border and a few yards from South Dakota.
Republican state Rep. Greg Stemen has introduced a bill to put sports betting on the 2024 ballot, saying state residents bet $300 million on sports annually, mostly on illegal online sites. Previous efforts to bring the issue before voters have failed. It faced opposition from educators, including University of North Dakota Chancellor Mark Hagerott, who testified there would be “huge negative effects” on students.
Wisconsin's tribal casinos appeared poised to take a share of Minnesota's sports betting market when St. Croix Chippewa opened two sports books near the state border in April 2022. Both closed abruptly in mid-February with no reason given, just a notice on the casino websites saying they would be closed “until further notice.” A sportsbook manager declined to provide more information about the closing.
Currently, only Potawatomi in Milwaukee and Oneida near Green Bay offer sports betting. Sports betting revenue was not available.
Discussion in Minnesota
Minnesota came close to legalizing sports betting last year. The legislation cleared the Democratic-controlled Minnesota House but stalled in the Republican-led Senate. In this session, Democrats hold both houses, although their advantage in the Senate is a single vote.
Democratic Gov. Tim Walz has said he will sign any sports betting bill that has tribal support.
Poll 800 Minesota by Star TribuneMPR News and TV station KARE 11 in September 2022 found that 48% of Minnesotans polled approved of sports betting, with 33% opposed and nearly 20% undecided.
Stephenson said he traveled the state while researching his account and is also looking into other states with legalized betting. In the most recent hearing on the bill, he highlighted the benefits the state would receive from sports betting tax revenue: Youth sports and a problem gambling assistance program would each receive 40 percent of the funds. The Democrats' legislation also has the support of the state's professional sports.
“This would be the largest investment by far in any state in the country in problem gaming ever,” he said.
Religious groups and a gambling addiction expert raised concerns at the hearing.
“For every gambler there are seven to 10 others suffering from their loved one's gambling,” said Susan Sheridan Tucker, executive director of the Minnesota Alliance on Problem Gambling.
But the bill received modest praise from an interfaith group opposed to sports betting.
“It's basically a very good version of something that we just don't like,” said Leah Patton, executive director of the Joint Religious Legislative Coalition.
If sports betting fails again, it probably won't be because of religion or addiction.
Republicans have offered competing sports betting bills and appear just as committed to adding horse racing as race-exclusive Democrats.
“If Democrats want to support a very partisan sports betting bill, they have the votes to do it,” Republican state Sen. Jeremy Miller said when he introduced a GOP bill in January. “I don't think there's enough Democratic support to do that.”
Miller said his bill would “provide access to Minnesotans who want the ability to bet on sports, to participate in that fan experience,” by offering licenses to professional sports franchises and horse tracks.
The state's tribes, meanwhile, tout their experience managing gaming operations and the statewide benefits.
The Democratic legislation “would not only support the tribes, but also provide a well-regulated and accessible market for the state's sports players and a competitive market that is important to our state's professional sports teams and partners,” Andy Platto , executive director of the Minnesota Indian Gaming Association, wrote in a letter to legislative leaders.
“Gaming revenue,” he wrote, “produces the primary tax base upon which tribes rely to fund basic and essential government services for thousands of tribal members.”
