A bill seeking to legalize online sports betting in Minnesota has cleared a key hurdle by passing through the House Judiciary, Finance and Civil Law Committee. Rep. Zack Stephenson, the bill’s sponsor, gave an impassioned speech to the committee about the need to roll out a regulated sports betting market in the state. He said that Minnesota is losing millions of dollars in tax revenue to the black market, and he urged fellow lawmakers to take decisive action. His bill, HF 778, advanced in a 9-6 vote.
Stephenson has now steered the bill through three House committees. It first cleared the Commerce, Finance, and Public Policy and State Government Finance Committees. The next step is the Taxes Committee. The bill has already been amended during its upward march. For example, Stephenson has committed to raising the minimum sports betting age from 18 to 21. It must eventually gain full approval from the House and the Senate before heading to Gov. Tim Walz’s desk to be signed into law.
HF 778 would legalize retail sports betting at tribal casinos. It would also hand control of online and mobile sports betting to the state’s 11 tribes. They would be awarded master licenses, which they could use to host leading operators such as FanDuel, DraftKings and BetMGM. However, the Senate is reportedly keen to add the state’s racetracks and professional sports teams to the mix – a similar framework to Arizona’s legal sports betting market – which could be a dealbreaker for the tribes.
Countering a Robust Black Market
Minnesota is now one of just 17 states that has not yet legalized sports betting. Stephenson has urged colleagues to move quickly and rectify that situation. “Let’s be clear from the onset that sports betting is already happening here in Minnesota,” said Stephenson during the virtual committee hearing. “We have a robust black market here with estimates over $2 billion in black market activity. People just use shady websites or digital workarounds and other means to place bets. What this bill is about is creating a legal market and that will displace the black market and in doing so, provide consumer protection, ensure the integrity of the game and limit money laundering and other illegal activities.”
Andy Platto, the executive director of the Minnesota Indian Gaming Association, also spoke at the committee hearing. “The impact of sports wagering expansion has been a positive one, but only when the authorizing legislation is carefully crafted to ensure that tribes play critical roles in bringing the marketplace to consumers,” he said. “In concept, House File 778 does recognize that the tribes, as the state’s gaming expert, are best positioned to operate Minnesota’s sports betting market, both in retail and mobile environments.”
The importance of regulating the sports betting market was underscored by the panic among customers of Sportsbook.ag – an unregulated, offshore sports betting site – this week. Yet another issue for Minnesota lawmakers is that residents can cross over the border and place legal sports bets in neighboring jurisdictions. Online sports betting is not yet legal in the Dakotas, to the state’s west, or in Wisconsin to the east. However, southern neighbor Iowa has legal sports
wagering, and Ontario to the north is poised to roll out a regulated sports betting industry on April 4.
Ontario Issues Online Gambling Licenses
In August 2021, Canada’s federal government ended a prohibition on single game sports betting by amending the country’s Criminal Code. In the past, only parlays were allowed. If Canadians wanted to bet on single games, they had to use offshore sites – either black market operators or gray market sportsbooks. The government now allows each province and territory to govern its own sports betting industry. Ontario has moved quicker than any other province. Its ProLine+ sportsbook is already offering single game sports betting, and it will roll out a competitive online sports wagering and casino gaming market with a variety of private operators on April 4.
The Ontario Alcohol and Gaming Commission created a subsidiary, iGaming Ontario, to process license applications. It has already issued licenses to 15 brands: bet365, FanDuel, BetMGM, 888, Unibet, PointsBet, LeoVegas, theScore, BetRivers, Coolbet, Fitzdares, Rivalry, Royal Panda, LottoGo and WSOP. Suppliers such as Kambi have also gained licenses. “We’re continuing to work closely with all who have applied to join the market,” said iGaming Ontario in a statement. “Not every operator will be ready to launch their services on day one. Some are more ready than others. This means Ontario’s new igaming market will steadily expand in the weeks and months following April 4.”
Ontario will become the second largest jurisdiction in North America with legal online sports betting, after New York. It will also be the largest jurisdiction with legal online casino gaming, ahead of Pennsylvania, New Jersey and Michigan. It is therefore a major new battleground for gambling operators, and industry analysts expect many more brands to obtain licenses in the weeks ahead.
States Report February Trading Figures
Pennsylvania’s sportsbooks handled $597.1 million in February. That was a 17.2% increase compared to February 2021. It was down 24.8% on the previous month, but that was to be expected, as February is a quieter time in the sporting calendar. However, it was a great month for bettors, as Keystone State sports betting operators reported a $442,847 loss in February. That compared to $32.2 million in revenue in January and $16.4 million revenue for February 2021.
It was a similar situation in New Hampshire. The state reported a total monthly handle of $70.9 million for February. That was down 28.8% on January’s total, but up 39% year-on-year compared to February 2021. Gross gaming revenue was just $1.01 million in February, a 43% year-on-year decrease, confirming a strong month for bettors. DraftKings Sportsbook is the sole online sports betting provider in New Hampshire. Analysts expect the handle and revenue figures to bounce back in March, with the NCAA Tournament raging on and several big favorites crashing out early.