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MINNESOTA BILL: TRIBAL EXCLUSIVITY AND PUSHING THE BOUNDS OF IGRA?


TRIBES AND PROFESSIONAL SPORTS TEAMS BACK TRIBAL-ONLY PROPOSALS

by Jill R. Dorson
February 23, 2023
in Legislation


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A pair of new Minnesota sports betting bills appear to try to work around the
Indian Gaming Regulatory Act (IGRA), similar to what Florida lawmakers and
tribes agreed to in 2021. The Florida language is now part of a federal court
case that could ultimately determine what mobile sports betting operated by
tribes will look like.

HF 2000, brought by Rep. Zach Stephenson, was set for a hearing Wednesday that
was postponed due to inclement weather in St. Paul, where up to 20 inches of
snow are expected this week. Sen. Matt Klein also filed the companion SF 1949 on
Monday.

Stephenson’s 2022 bill, which would have allowed for retail and digital sports
betting at a 10% tax rate and given exclusivity to the state’s 11 tribes, passed
the House last year. The Senate passed a more inclusive bill that would have
allowed for commercial sports betting as well.  Neither measure received
approval in both chambers.

The 2023 version of Stephenson’s and Klein’s bills still gives the tribes
exclusivity, sets a 10% tax rate for bets not taken on tribal lands, sets the
legal wagering age at 18, and would allow for retail and digital wagering. The
bills would effectively cap the number of digital platforms at 11 — one for each
tribe — and tribal compacts with the state to offer wagering would be in effect
for 20 years.

A consortium of Minnesota professional sports teams — including the MLB Twins,
NBA Timberwolves, the NFL Vikings, and NHL Wild — wrote a letter in support of
the bills despite being shut out of having platforms or retail sportsbooks.


WHERE BETS PLACED, TAKEN AN ISSUE

The bills also include a line that seems to stretch the bounds of IGRA, the 1988
federal law that governs tribal gaming but does not contemplate digital
wagering.

In a section titled “wager location,” the bills read, “The incidental routing of
a mobile sports wager shall not determine the location or locations in which the
wager is initiated, received, or otherwise made.”

In Florida, the Seminole Tribe and the state agreed to a compact which would
have required that all bets placed in the state flow through servers on Seminole
lands. The compact was approved by the U.S. Department of the Interior and then
a pair of parimutuels sued the DOI, saying that the compact is illegal because
IGRA only addresses gaming that takes place on tribal lands. As in Florida, the
Minnesota bill seeks to massage the location of the bettor (other than to
require them to be in the state), which could bring a challenge if the bill
passes and compacts are made.





In other states where tribal gaming is part of the mix, like Arizona or
Connecticut, commercial operators are also allowed to offer wagering. In some
cases, tribes have multiple servers, one on tribal lands and one
off-reservation. In situations where tribes offer digital wagering and wagers
initiated off tribal lands are taxed but those initiated on tribal land are not,
operators use two servers in order to track the wagers.

The only state to broadly preserve tribal exclusivity is Washington, where in
March 2020 the legislature approved a compacting process that awarded
retail-only betting to tribes.

The Minnesota bills have the backing of the Minnesota Indian Gaming Association
and would be favorable to the tribes while excluding participation by commercial
casinos or professional sports teams. There could be pushback in the Senate,
where the 2022 bill would have allowed two horse racetracks to have legal
wagering. Last year, MIGA supported Stephenson’s bill but was clearly opposed to
any other bill that would infringe on its exclusivity.


RESPONSIBLE GAMBLING A PRIORITY

The bills prioritize responsible gambling. Beyond prohibiting advertising to
minors and requiring the curation of a self-exclusion list, the legislation also
allows for problem and responsible gambling programs to get a percentage of
revenue after certain expenses are deducted, with funds earmarked specifically
for the National Council on Problem Gambling and the Commissioner of Human
Services.





According to the text of the bills, the funds must cover up to 60 hours of
“intervention services” for impacted individuals or family members. The bills
also have some additional unique language, including:

 * Deposits must be made at least three hours before a wager is placed.
 * Push notifications from a platform are prohibited when the consumer is not
   engaged in the platform, with the exception of notifications related to
   fraudulent information.
 * Sports betting advertising would be prohibited on private cars, taxis, limos,
   bus or train stops, taxi stands, and at airports.


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JILL R. DORSON

Jill has covered everything from steeplechase to the NFL and then some during a
more than 30-year career in sports journalism. The highlight of her career was
covering Oakland Raiders during the Charles Woodson/Jon Gruden era, including
the infamous “Snow Bowl” and the Raiders’ 2003 trip to Super Bowl XXXVII. Her
specialty these days is covering sports betting legislation across the country.
You can reach Jill at jill@bettercollective.com




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