Minnesota Sports Betting Bill Faces Tribal Sovereignty

A new Minnesota sports betting bill (SB 757) aims to legalize statewide mobile wagering, but it raises major tribal concerns.

The bill grants tribes exclusive rights to sports betting but taxes off-reservation wagers at 22%, challenging tribal sovereignty.

Lawmakers see sports betting as a huge economic opportunity, but taxation issues and tribal opposition could delay legalization.

Learn how Minnesota’s latest sports betting proposal could impact tribal gaming, state revenues, and the future of legal wagering.

Minnesota Sports Betting Bill Proposes Mobile Wagering but Raises Tribal Sovereignty Concerns

3 Key Points:

1. Minnesota Proposes Tribal-Controlled Sports Betting: SB 757 allows tribes to operate sportsbooks while taxing off-reservation digital wagers at 22%.
2. Tribal Sovereignty at Risk: Some tribes may oppose state taxation, arguing it violates their gaming rights under the Indian Gaming Regulatory Act (IGRA).
3. Potential Economic Impact: The bill also allocates 15% of tax revenue to a horse racing economic development fund, aiming to satisfy racetracks.

Minnesota lawmakers have reintroduced sports betting legislation (SB 757), proposing a tribal-controlled, statewide mobile wagering model. Senator Matt Klein, a long-time advocate for legal sports betting, filed the bill on January 30.

The bill would:

• Authorize 11 sports betting operator licenses, exclusively for Minnesota’s tribal nations.
• Allow tribes to contract with third-party sportsbook operators for mobile betting platforms.
• Tax all bets placed outside Indian Country at 22%, significantly higher than many other U.S. states.

While the bill provides tribes exclusivity, the state taxation of off-reservation bets could create sovereignty conflicts similar to past sports betting disputes in Florida, Arizona, and Connecticut.

Tribal Sovereignty and the Taxation Debate

Across the U.S., tribes have taken different approaches to digital sports betting regulation.

• In Arizona, Connecticut, and Michigan, tribes agreed to state taxation and regulation of mobile betting.
• In Florida, the Seminole Tribe operates mobile betting but pays a revenue share instead of taxes, maintaining regulatory control.

Minnesota’s tribes have historically opposed sports betting models that challenge their exclusivity. While SB 757 gives tribes full control, some may oppose the 22% tax rate on off-reservation bets, arguing it violates tribal sovereignty.

The bill states:
“For purposes of this chapter, a wager is placed at the physical location of the individual placing the wager.”

This contradicts the Seminole Tribe’s legal argument in Florida, where a federal court ruled bets are “placed where received” if routed through tribal servers.

If Minnesota’s tribes reject the taxation provision, lawmakers may need to revise the bill to ensure tribal support.

What Else is Inside Minnesota’s Sports Betting Bill?

Beyond tribal gaming and taxation, SB 757 includes several key regulations:

• Banned betting activities: Wagering on life insurance contracts, sports-themed tipboards, and private social bets.
• Advertising restrictions: No ads targeting those under 21 or promotions on school campuses.
• Responsible gaming measures: Operators must offer deposit and time-limiting tools.
• Licensing structure:
  • Tribes pay $2,125 annually for an operator license.
  • Platform providers pay $250,000 upfront and $83,000 annually for renewal.
• Horse racing funding: 15% of sports betting tax revenue will support Minnesota racetracks, which have long sought a share of gaming revenues.

Additionally, the bill proposes an “equalization fund”, which would compensate smaller tribes that do not partner with major sportsbook operators. This mirrors California’s Revenue Sharing Trust Fund, which distributes gaming revenues to non-casino tribes.

Another Sports Betting Bill on the Way?

Senator Jeremy Miller, another sports betting advocate, is expected to introduce a competing proposal.

Miller has suggested:

• A 20% tax rate, slightly lower than Klein’s 22% proposal.
• 50% of tax revenue allocated for charitable gaming tax relief.
• 20% of tax revenue earmarked for Minnesota horse racing.

Miller believes 2025 could be the year for legalization, stating:
“Minnesota continues to miss out on what is now a $150 billion industry. We were on the brink of success last year.”

His proposal may appeal more to racetracks, but both bills will likely require negotiations with tribal nations to succeed.

Will Minnesota Finally Legalize Sports Betting?

Minnesota has debated sports betting for years, but tribal concerns over taxation and sovereignty have stalled progress.

While SB 757 gives tribes control, the state’s taxation of off-reservation wagers could complicate negotiations. With competing proposals emerging, lawmakers must balance tribal interests, state revenues, and industry growth to pass a bipartisan bill.

If Minnesota’s tribes accept the terms, 2025 could finally be the year sports betting launches in the North Star State. However, if sovereignty disputes remain unresolved, legalization may once again be delayed indefinitely.