Legalize Sports Betting in Minnesota

 

This bill will legalize sports betting within the State of Minnesota and establish a regulatory framework for

its operation. The Minnesota Gaming Control Board will carry out all regulatory actions including licensing operators,

conducting compliance audits, investigating violations, and enforcing age verification requirements. Adults aged 21 and

over will be permitted to place wagers on professional and collegiate

sporting events through licensed tribal casinos, racetracks, and online platforms operated by licensed

entities. Licensed operators will be required to pay an initial licensing fee of $250,000, annual renewal fees of

$100,000, and a 10% tax on gross gaming revenue (total wagers minus payouts). The Minnesota Gaming Control Board will

collect and distribute all tax revenue according to the following allocation: 26.5% (estimated $12 million annually) for

hiring additional school counselors in underserved districts, 15.5% (estimated $7 million annually) for expanding

after-school tutoring programs in math and literacy, 8% (estimated $3.5 million annually) for providing free breakfast

programs in Title I schools, 17.7% (estimated $8 million annually) for road resurfacing of deteriorated state highways,

7.8% (estimated $3.5 million

annually) for inspection and maintenance of structurally deficient county bridges, 4.5% (estimated $2 million annually)

for expansion of rural transit services in greater Minnesota counties, 6.6% (estimated $3 million annually) for hiring

full-time gambling addiction counselors, 4.5% (estimated $2 million annually) for statewide problem gambling awareness

campaigns, 2.2% (estimated $1 million annually) for a 24/7 multilingual gambling helpline, 1.7% (estimated $750,000

annually) for University of Minnesota gambling addiction research partnerships, 2.7% (estimated $1.2 million annually)

for Minnesota Gaming Control Board compliance officers, 1.3% (estimated $600,000 annually) for technology monitoring

systems, 0.7% (estimated $300,000 annually) for annual audits of licensed operators, and 0.3% (estimated $150,000

annually) for consumer education materials.

This bill aims to create a legal, regulated sports betting market that protects Minnesota consumers, generates state

revenue for critical services, and eliminates the need for Minnesotans to use illegal gambling operations.

 

This bill is necessary because Minnesota currently has no legal framework for sports betting, forcing residents into

dangerous and unregulated markets. An estimated $2.3 billion is wagered annually by Minnesotans through illegal offshore

websites and unlicensed bookmakers that operate beyond state jurisdiction. These illegal operators provide zero consumer

protections—when disputes arise over unpaid winnings, Minnesotans have no legal recourse. A 2024 University of Minnesota

survey found that 38% of Minnesota adults who bet on sports use illegal channels, exposing them to fraud, identity

theft, and rigged odds. The lack of regulation also means no age verification systems exist in the illegal market,

allowing minors to access gambling platforms. Additionally, problem gamblers using illegal sites have no access to

self-exclusion programs, betting limits, or treatment resources that would be mandatory under this bill's regulatory

framework. The current system generates zero tax revenue for Minnesota while the gambling occurs regardless. Minnesota

is losing economic opportunity and falling behind regional competitors. Iowa legalized sports betting in 2019 and

generated $16.3 million in tax revenue in 2023 alone. Wisconsin, Michigan, and South Dakota have also legalized sports

betting, creating a competitive disadvantage for Minnesota. Border communities are losing business as residents drive

across

state lines to place legal bets. Minnesota tribal casinos and racetracks are requesting this legislation to remain

competitive

and provide services their customers are seeking elsewhere.

This bill solves multiple critical problems simultaneously. It protects Minnesota consumers by bringing sports betting

into a regulated environment where the Gaming Control Board can enforce fair practices, investigate fraud, and ensure

prompt

payouts. It addresses the youth gambling problem by mandating strict age verification that illegal operators ignore. It

provides help for problem gamblers through mandatory funding for treatment programs and awareness campaigns. It keeps

Minnesota economically competitive with neighboring states while creating jobs in gaming operations, technology,

compliance, and customer service. Most importantly, it generates substantial revenue for underfunded priorities—school

counselors, crumbling infrastructure, and mental health services—without raising taxes on Minnesota families. The choice

is

not whether Minnesotans will bet on sports, but whether Minnesota will regulate it and benefit from it, or continue

allowing

illegal operators to profit while providing no protections or public benefit.

 

Sports Betting: The activity of placing wagers on the outcome of professional or collegiate sporting events, including

but not

limited to football, basketball, baseball, hockey, soccer, and golf.

Licensed Operator: Any tribal casino, racetrack, or approved online platform that has received authorization from the

Minnesota Gaming Control Board to accept sports wagers.

Eligible Participant: Any individual 21 years of age or older who is physically located within Minnesota state borders

at the

time of placing a bet.

Professional Sporting Events: Contests involving professional athletes participating in recognized leagues including but

not

limited to NFL, NBA, MLB, NHL, MLS, and similar organizations.

Collegiate Sporting Events: Athletic competitions involving colleges and universities.

Online Platform: Any mobile application or website operated by a licensed operator that allows eligible participants to

place

sports wagers remotely.

 

Initial implementation costs for the Minnesota Gaming Control Board, including hiring staff, developing technology

infrastructure, creating regulatory frameworks, and establishing licensing procedures, will be funded by operator

licensing

fees. Each licensed operator will pay a one-time initial licensing fee of $250,000 upon approval and an annual renewal

fee of

$100,000. With an estimated 10-15 operators seeking licenses in the first year, these fees will generate between $2.5

million and $3.75 million to cover all startup expenses. All ongoing programs and services established by this bill will

be funded through a 10% tax on gross gaming revenue from sports betting operations. Gross gaming revenue is defined as

the total amount wagered by consumers minus the total

amount paid out in winnings. Based on revenue data from comparable states with similar population sizes, Minnesota's

sports betting market is conservatively projected to generate $450 million in gross gaming revenue annually once fully

operational, producing approximately $45 million in annual tax revenue. This $45 million will be distributed according

to

the allocations specified in Section I. If tax revenue in any given year falls below projections, all program funding

will be reduced proportionally to match actual revenue collected. No program established by this bill may draw funds

from any other source in the state budget. If tax

revenue exceeds projections, surplus funds will be distributed according to the same percentage allocations outlined in

Section I. The Minnesota Gaming Control Board will publish quarterly revenue reports to ensure transparency and

accountability in fund distribution.

 

Any licensed operator found not paying the inital fee, renewal

fee, or taxes in full will be charged with tax evasion and convicted as such.

 

This bill will go into effect one year after passage.