Will Minnesota Pave The Way For Legalized Betting?

In the wake of recent events regarding the proposed legislation of U.S. sports betting, the state of Minnesota is considering the advantages and disadvantages of implementing the new regulations that would significantly change the local online betting scene.

While the potential benefits and impressive would-be revenues of more than $40million to boost the state economy, are cited as primary motives for the legalization of this popular form of internet betting…

…an American politician and member of the Minnesota House of Representatives, Pat Garofalo, firmly believes that the above perks are not valid enough reasons to encourage the acceptance of the bill.

The Floodgate Opens

Earlier this year, the U.S. Supreme Court presented a verdict in the well-known case of “Murphy v. National College Athletic Association,” which is currently transforming the sports betting market.

Since the court’s decision, seven states, including New Jersey have permitted sports wagering.

There are many advantages within a regulated sports betting sector, with approximately 28% of U.S. adults already engaged to some extent. Also, the security, safety and protections of consumers is among the top priorities due to black market platforms growing exponentially in numbers and scope.

The Challenges of Minnesota Legalization

Back in 2002, one of the most common forms of illegal gambling, was sports wagering in Minnesota, and the black market has only increased since then.

A Republican and one of the state’s most active advocates for legalization, Pat Garofalo, designed sports wagering measures earlier in November.

During this period he was also re-elected to Minnesota’s House, and soon after he focused on assembling stakeholder positions.

The lawmaker regularly speaks publicly about this issue. Recently, he tweeted:

“Legalize sports gambling to help defund organized crime. Do not legalize sports gambling because you think it will generate tax revenue for politicians to spend.”

There has been plenty of discussion regarding this situation, but the aim is the same- Minnesota needs an agreement.

As reported by Oxford Economics study in 2017, Minnesota’s wagering white market could see $5.3 billion in an annual handle and around $350 million in gaming revenue…

…and, as stated in the study, a tax rate of 15% decreases those predictions to $4.4 billion and $313 million respectively.

Those higher rates can be interpreted to less engaging odds for players, and could keep the black market untouched.

On the other hand:

It might keep more people from participating in sports gambling. Simply put, the reduced tax rate helps grow the white market, which, of course, provides greater profit for the state.

The Tax Rate Concern

It was intriguing to see what residents of Minnesota think about this matter. A recent state poll presented that Minnesotans are divided regarding the issue of whether a regulated and legalized market is of any real value or not.

The House of Representatives found that…

• 41.6% are opposed
• 40.7% supported the legislation and
• Almost 18% remain undecided

Furthermore, Minnesota has approximately 4.2 million adults, and based on the findings, there could be as many as 1.7 million punters engaged in sports gambling on the internet.

State Senator Roger Chamberlain, a Republican, shares Garofalo’s opinion, stating:

“Tax revenue should be low so that Minnesotans do business with legal sportsbooks.”

The tax base rate of 10% could produce $1.8 billion for state funds across the country.

As a result, Garofalo is expecting Minnesota to gain about $4 billion annually from sports betting wagers. These predictions can significantly differ, which supports the fact that the regulation should be about user protection first and foremost.

The Minnesota Legislature is planned for January 8, 2019. Along with a number of advantages and disadvantages, it is up to Minnesotans to decide the future of sports betting in the state.

Source:

“Minnesota Lawmaker Says Tax Revenue Not Top Priority For Sports Betting Push”, Brian Pempus, usbets.com, December 27, 2018