A hearing Wednesday exploring the social and financial harms that come from sports betting certainly got the attention of the gambling industry.
Lobbyists representing the large national sportsbooks as well as the state’s tribal nations listened from the audience while testifier after testifier warned of the problems caused in other states when sports betting was legalized.
They didn’t testify, though. Sen. John Marty, the Roseville DFLer who sponsored the hearing of his Finance Committee, said they were welcome if they talked about predatory practices and addiction. Up until now, he said, the hearings have focused on who profits from sports betting and how much rather than who suffers.
Marty, who has opposed additional gambling in the state, said Wednesday that it is already legal for residents to bet on games with friends or even strangers.
“What is not legal in Minnesota is sportsbook making, where a corporate entity can profit off of your betting and encourage you to bet more and more and more,” Marty said. And he dismissed claims that legal book making will replace the illegal and unregulated betting sites, noting studies that show such betting increases in states after they became one of the 38 that legalized the practice.
A letter from some members of Congress to U.S. Attorney General Merrick Garland asked him to crack down on off-shore betting sites that were seeing increased activity from the U.S. since the Supreme Court gave states, not Congress, the authority to legalize sports betting.
“As this nascent legal market continues to expand, we cannot turn a blind eye to the fact that the illegal market is thriving and operating unfettered,” the members of Congress wrote in June 2022. “Internet searches nationwide for offshore sportsbooks increased by almost 40 percent in 2021, outpacing searches for legal ones.”
And Sen. Erin Maye Quade, a DFLer from Apple Valley, said she could support sports betting in physical casinos but not the mobile sports apps that are the primary location for bets made. Nine of 10 sports bets are made on mobile devices.
Maye Quade spoke of the burden of distance when bets can only be made in person at a casino. But the national sports betting companies prefer mobile. The companies, she said, know that if “they can’t gamble from the carpool lane or standing in line at the bank or from the bathroom — they don’t have the opportunity to turn people who might casually bet on the Vikings beating the Rams next week to place bet after bet after bet, play after play after play, dopamine hit after dopamine hit after dopamine hit.”
And she noted data from Connecticut showing how sportsbooks make most of their revenue from a relative handful of bettors. There, 71% of legal bets are made by 7% of residents. In addition, half of the sports book revenue was made from just 1.8% of residents.
A year ago, Marty was working with Sen. Matt Klein, DFL-Mendota Heights, to see if they could agree on a bill. Klein has been the main sponsor of sport betting legislation in the Senate, and Marty has been opposed. At the time, Klein needed to get the entire DFL caucus to support a bill because Republicans were insisting on help for the two horse racing tracks. While some changes were made to address Marty’s concerns about problem gambling and predatory betting, the political math changed with a new deal that, for the first time, brought both the state’s tribal nations and the horse tracks together on a single bill.
Still, Klein said he wants to include Marty’s ideas in a bill he said would be introduced shortly (this year’s legislative session begins Tuesday).
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“If passed, this bill will make Minnesota the safest state for legal sports wagering in the country,” Klein said. “This will be a significant improvement over the status quo, where illicit sports wagering on unregulated offshore platforms is widespread in our state.”
The protections, Klein said, would include a gambling helpline, a push to identify high-risk gamblers for help, restrictions on advertising around schools and colleges and advertising targeting minors or problem gamblers, wagering limits, bans on push notifications on mobile devices and dedication of 10% of revenue to problem gambling programs.
It will also place a three-hour delay between when money is put into a gamblers account and when bets can be made and a ban on so-called prop bets on college sports. Prop bets are side bets that might include which team scores first or how many three-point shots a basketball player makes.
The Finance Committee heard testimony from two national sports betting opponents who described practices of what are called “VIP hosts” who are assigned to frequent gamblers to encourage them to bet more, often with frequent text messages. Using personal relationships, prizes, trips and so-called free bets, the host keeps bettors betting even after big losses, said Matt Litt, a New Jersey attorney who has sued big national companies on behalf of addicted gamblers who suffered big losses.
“There’s no escaping it,” Litt said. “Text messages are happening first thing in the morning, late at night, on holidays. There can be no result with these individuals but that they will hit rock bottom, and the VIP host knows it.
“People ask, ‘Isn’t it the gambler’s fault?’” Litt asked. “Of course it is. But that responsibility is not exclusive. The casinos with their VIP hosts take an active role in the addiction, turning minor mistakes into catastrophic financial events.”
Litt suggested that any bill legalizing sports betting make a stated declaration that the sponsors of the gambling bear legal responsibility for the damage done by and to people who they helped addict and should have known were addicted. He compared it to existing dram shop laws that hold bars responsible for damage caused by people who were sold too much alcohol.
The committee also heard from researchers who found increased financial hardship and spikes in intimate partner violence after states legalized mobile sports betting.
Proponents of sport betting in Minnesota and the companies that will make the most money from it are entering the 2025 session with some momentum. A deal reached at the end of the last session was the first to bring both the tribal nations and the two horse racing tracks into agreement.
While there were supporters of the tribes’ position — mostly from DFLers — and supporters of the tracks’ position — mostly from Republicans — neither made up a majority needed to pass a bill. Combining those two groups of lawmakers could put the bill over the top. (That is, if the Legislature can organize itself in time to pass significant policy legislation like this.)
The bill would give the tribes exclusive control over mobile betting but would likely see them contract with the large national sport books. Much of the revenue from state taxation would go to the tracks, smaller tribes and the beneficiaries of charitable gambling.
Shifting the focus on problem gambling and evidence of predatory practices by the sports books would not help the bill’s chances. So while backers didn’t testify, they did issue statements to the media and the committee.
Andy Platto, the executive director of the Minnesota Indian Gaming Association, said the nine tribes he represents think a state sport betting system will help shrink illegal and unregulated gambling sites.
“Tribal gaming at Minnesota destinations is the most highly regulated gaming in the state, with an impeccable record of regulatory success and responsible management,” Platto wrote. “Legal mobile sports betting operated by MN tribes would bring the activity under a strong regulatory construct to protect consumers and to provide needed resources to address problem gambling. Recent versions of a Minnesota sports wagering bill have included the strongest provisions to protect bettors of any law in the nation. MIGA tribes support those measures and are committed to the goal of addressing problem gambling responsibly, with thoughtful policy and new dedicated resources.”
A lobbying entity called the Sports Betting Alliance represents four of the largest sports betting companies: BetMGM, DraftKings, FanDuel and Fanatics. Its spokesperson, Blois Olson, issued a statement arguing that the betting going on in the state now is illegal by books that don’t have the same consumer protections as legal sites.
In fact, some unregulated platforms have been shown to actively target minors,” Olson said. He also criticized the way the hearing was conducted.
“It’s also worth noting that Senator Marty, a longtime opponent of sports betting, did not include the perspective of Minnesota sovereign tribal nations who are key stakeholders in gaming in the state,” the statement said. “In fact, he did not permit anyone to testify who did not share his perspective — not responsible gaming experts, industry representatives, or experts in the dangers of the thriving illegal sports betting market in Minnesota.”
