Robert A. Doty Executive director Minnesota State Lottery Roseville, Minn.
William Goede Chair Minnesota Gambling Control Board Roseville, Minn.
Hold onto your wallets! Gambling in Minnesota is about to explode. In May, the U.S. Supreme Court ruled that the federal government can no longer prohibit states from allowing gambling on professional and amateur sports. At the same time, we are undergoing a technology revolution in smartphones and the development of 5G technology. If our legislature enables it, Minnesotans will be able to gamble on any professional or amateur sports team they wish. Before we acknowledge this as the end of civilization as we know it, a little Minnesota gambling history is in order.
Gambling in Minnesota has had a slow and inexorable path toward acceptance. Twice, voters have approved constitutional amendments—to allow pari-mutuel racetrack betting (1982) and to establish a state lottery (1988). More than two-thirds of voters approved both measures, and so clearly a growing number of Minnesotans support the expansion of legalized gambling. Both of these earlier expansions were supported by arguments that taxes would go down and horse breeding would go up.
Readers of this column probably have not noticed their taxes going down, nor have our highways been congested with horse-drawn carriages. We have learned that running lotteries is expensive. Figures provided by the Minnesota State Lottery show a net contribution to the general fund over the last 28 years of approximately $700 million. But the current estimate of total illegal sports gambling in the country is $150 billion a year, and estimates of legal sports gambling (in Nevada) approximate $7.5 billion, according to recent media coverage. Clearly, professional and amateur sports gambling will eclipse all other forms of gambling, including American Indian casinos.
Congress established Indian gaming when it passed the Indian Gaming Regulatory Act in 1988. That act allowed sovereign nations (tribes) to enter into tribal-state compacts for casino-style gambling. Ultimately 40 tribal casinos were established in Minnesota alone.
However, to gamble in Minnesota, it still requires that you travel to a casino, a racetrack (Canterbury), a convenience store (to buy a lottery ticket), or a charitable outpost that sells pull-tabs. All of that is about to change. No longer will you have to go anywhere to gamble to your little heart’s content—you will have everything you need in your pocket.
In the past in Minnesota, you were limited to what you could bet on: You could bet on horses. You could bet in a card room at a racetrack. You could bet on mathematical ignorance (lotteries). You could bet on limited manual dexterity (pull-tabs). And you could bet at a temple of tribal statisticians (casinos). But you could not bet on professional sports or collegiate sports.
But no longer. Now that the Supreme Court has ruled in the Murphy case, states are free to establish their own rules and regulations on sports betting. The court did note that Congress could, alternatively, constitutionally outlaw sports betting countrywide. Don’t bet on it.
What would the ability to bet on pro and amateur sports from the phone in your pocket mean? In Europe, such gambling is allowed. At professional soccer games, people routinely bet on the outcome, whether a foul will be called, on penalty kick success, and other intra-game developments. Mark Cuban, in an interview on CNBC, suggested that baseball games would now be worth watching because people could bet on individual batters, whether a runner would be advanced, and other game developments. Smartphone graphical displays coupled with 5G technology will make all this possible in real time. Casinos are less convenient than the smartphone in your pocket and consequently they will see declining patronage.
Amateur sports, particularly NCAA collegiate sports, will now see much of its resultant gambling revenue on top of the table, where it can be counted. People will be shocked to discover how much money is actually generated by NCAA sports. Predictably, the pressure to pay the NCAA athletes who drive this spending will go up. But don’t count on your taxes going down.
And so, in the not-too-distant future, when people attend Gopher football games, most of them will be watching and betting on their smartphones. So, too, when the Gophers play basketball. A whole arena full of people will be bent intently over the tiny screen on their phones. In 1995, at the beginning of the digital revolution, a member of the National Information Infrastructure Advisory Council made the point that if the new internet ever allowed unlimited individual gambling, we would see the end of civilization as we know it. We will be inching closer to that demise when the Gophers announce that they are moving their broadcasts to BTN, the Big Tech Network.
Vance K. Opperman You can bet on it
Vance K. Opperman (email@example.com) is owner and CEO of MSP Communications, which publishes Twin Cities Business.