Felony Charges, Unresolved Issues Upended Minnesota’s Sports Betting Chances

Jerome Miron-USA TODAY SportsRep. Pat Garofalo (R-58B) discussed Minnesota’s failure to legalize sports betting this sessionGarofalo, a major proponent of sports betting, said there were too many unresolved issues to push it across the finish lineA Democrat Senator’s felony burglary charges also made compromise difficult at the end of the session

While it was true that a framework was in place for legalized Minnesota sports betting, one of the state’s largest sports betting proponents said there were too many unresolved issues remaining to move it across the finish line for this session.

Rep. Pat Garofalo (R-58B) described the end of the the 2024 legislative session as “frustrating” for sports betting, with several unresolved issues and the highly-publicized felony burglary charges for a Democratic Senator making its legalization all but impossible.

“The two reasons why: One, there were still unresolved issues, but also the felony issue, those two things combined is what caused it. It’s disappointing,” he told Sports Betting Dime.

Typical End for Minnesota Sports Betting

Despite a last minute flurry of activity and a first-time deal between tribes, tracks, and charities, Minnesota lawmakers could not find the necessary votes for a sports betting bill during the final day of the state’s legislative session.

Rep. Zack Stephenson’s (DFL-35A) sports betting bill, HF 5274, was added to an omnibus tax bill and moved forward to the House of Representatives on the final day of the session. It never received a vote on the House floor.

Despite the bill’s failure, it was widely reported that the framework of a revenue sharing deal between Minnesota tribes, tracks, and charities had been agreed to during the session’s final few days. According to MINNPOST, an agreement centered around this sports betting tax revenue sharing arrangement:

45% to charitable gambling15% to horse tracks15% tribal equalization fund10% problem gaming10% to recruit national events5% for youth sports and activities

The tribal equalization fund would have provided Minnesota tribes not participating in sports betting with a source of the tax revenue. To supplement the new arrangement, the legislature agreed to raise the proposed sports betting tax rate from 20% to 22%.

Garofalo noted that the framework of a deal was in place, which was encouraging, but there was too much left undetermined to approve the bill.

“The first thing is, realize when people say there was an agreement, what that means in the legislature is different than what it means in the real world. There was a framework in place, but there were many things still left unresolved,” Garofalo said.

Unresolved Minnesota Sports Betting Issues

While the sports betting tax revenue disbursement framework was a step in the right direction, three issues were still in play when the session expired, Garofalo said.

The first was the proposed sports betting tax rate of 22%. The rate was higher than several lawmakers had hoped to see, he noted, and was still being debated during the final few days of the session.

The second was the issue of the Minnesota tribal gaming compacts. To participate in sports betting, the state and tribes would have to modify their compacts to allow for the new form of gaming.  Garofalo said a decision on whether or not the compacts would expire or live on in perpetuity was still being negotiated as well.

Finally, a disagreement on the age of in-person sports betting was still very much in play. Several contingencies wanted to lower the age of in-person sports betting to 18, while keeping the online sports betting age at 21.

“Again, those are important issues that were not fully resolved,” he said.

Felony Charges “Screwed Up” Session

But the primary reason why sports betting was not approved? Garofalo pointed to the felony burglary charges of Sen. Nicole Mitchell (DFL-47) for breaking down collaboration and compromise between the two parties in the Minnesota legislature.

Mitchell was charged with felony burglary after allegedly breaking into her stepmother’s home in April to take back several of her late father’s belongings, including his ashes.

The Democratic Senator was stripped of her committee assignments, but was allowed to return to the Senate in early May. Democrats hold a one-member majority over Republicans in the Senate, so when she was allowed to return and cast deciding votes on important issues, this rubbed some in the Senate the wrong way, Garofalo said.

It broke down bipartisan negotiations at the end of the session.

“When she started casting the deciding votes on things, despite being charged with a felony, it really made compromise and collaboration difficult. It really screwed up the end of session,” he said.

Moving Forward to 2025

Garofalo, who announced he would retire from the House this year, hopes his colleagues will continue to become better informed on sports betting to improve its chances in 2025.

There’s a purveying sentiment among many in the Minnesota legislature that legalized sports betting will result in a “huge societal ruin,” he said.

“Sports betting is one of the least compulsive forms of gambling out there. Slot machines have many more problems than sports gambling, and we already have those in Minnesota. Every form of gambling can have a compulsion, but sports gambling is actually pretty low compared with the other types of gambling out there,” Garofalo said.

But there are reasons to be optimistic about sports betting in Minnesota. Sports betting is a popular issue with the public, he said, and generally speaking when something is this popular “it eventually happens.”

An amendment Garofalo created this year will also help sports betting quickly get off the ground when, and if, sports betting is legalized in Minnesota. His “Iowa Plan,” which was supported in the legislature, allows sports betting companies who are licensed and operating in Iowa to “have provisional approval to operate in Minnesota.”

Prior to the amendment, under the original bill it was expected that sports betting wouldn’t start in Minnesota until January 2026.

“The industry told us that they could have been up and running by this NFL season. That’s something that’s helpful, the shorter lead time. It’s an important provision that turns thing around quicker, gives people a sense of urgency, compared with waiting 20 months to launch,” he said.