The state of Minnesota's attempt to legalize sports gambling is on the ropes.
The Democratic-Farmer-Labor Party doesn't have the necessary votes to pass a bill making its way through committees and time is running out as there are less than two weeks left in the legislative session.
However, one of the key players affected by any bill—the state's two racetracks—is not feeling the love.
As it's been negotiated, the state's Native American tribes would have exclusive access to licenses. Meanwhile, Canterbury Park and Running Aces, a harness track, are left out in the cold.
Realizing that without the support of state Republicans, who want the tracks to receive some benefit, an amendment was filed by the DFL. That amendment proposes the tracks receive a percentage of the tax revenue—believed to be around 3%—from sports gambling up to $20 million. Once that cap number has been reached, they would then receive $3 million annually. These amounts would be split 50/50.
"If you're the harness track you say well, that's fair, but if you're looking at the realities of the business, harness purses and Thoroughbred purses aren't the same," said Canterbury media relations manager Jeff Maday. "So it's not realistic to split it 50/50. There needs to be a different number. That's part of the objection on our side. But I think Running Aces also has said all along...that they want to be treated the same as the tribes, which is realistically a non-starter. We're not going to be given a license at this point."
Maday said that Canterbury CEO and president Randy Sampson believes that the bill would work for the first couple of years, but once they hit the annual cap, it won't. He would like a long-term solution rather than a quick fix. That is at the core of the track's opposition to the legislation.
Canterbury does not believe the bill addresses how it negatively impacts simulcasting, advance-deposit wagering, and casino wagering which drives the track's funding.
The tribes for their part are fine with giving up a portion of the proceeds to the tracks, but that really underlines just how much money they stand to generate from legalized sports gambling.
According to American Gaming Association data cited by Front Office Sports, commercial sports betting generated $7.5 billion in revenue last year, up 77.3% from $4.3 billion in 2021. As more states move to legalize sports gambling, the number is sure to grow significantly higher.
Whether you are a state or a tribal government, the revenue from sports gambling creates funding for many vital programs.
Senator Matt Klein, who brought forth the amendment, has said that removing tribal exclusivity is not an option. And even though the DFL holds a one-vote advantage, there are some senators on the left who are refusing to vote in favor of any gambling bill. This is forcing the pro-gambling senators to reach across the aisle to find support. It is there that the horse racing industry is finding allies.
Klein told the MinnPost, "We're offering them what I think is gonna be their best offer this year. And the question on the table will be, would you rather have this or have nothing?"
If that language feels like a loaded gun pressed firmly against the tracks' heads, Maday wouldn't disagree.
"That is the problem, is that this is a short-term fix for a long-term problem. And that's what Randy is seeking here, something that's a long-term solution as we modernize gaming in the state. Racetracks should be a part of that solution. And right now, it's not shaking out that way, at least not in the way the bills have been proposed."
Maday said the state's Department of Revenue projected that in three to four years, sports gambling would generate $400 million in tax revenue for Minnesota. Were the cap lifted but the 3% the tracks were to receive remain intact, that would bring $12 million annually.
The bill also allows Minnesota residents to bet on in-state races. Currently, they can only bet on out-of-state racing.
Time is of the essence. There is a long way to go and no guarantee the distance can be covered in short order.
"Just from what I've read from various senators who say they feel that it's going to be a bit of a stretch to get there just because they need to make it through, I think, two more committees in the Senate yet before they can reach the floor," Maday said.
He added, "There's going to have to be some major developments here in the very near future for it to make it through."
