“This was really poorly thought out and it's not going to end well,” said Rep. Zack Stephenson, DFL-Coon Rapids, lead sponsor of the House bill to legalize sports betting.

On Monday night, the commission approved historic horse racing (HHR) at the behest of the state's two tracks: Canterbury Park in Shakopee and Running Aces in Columbus. HHR is a machine-based game that would generate cash for wallets at the state's two tracks. Starting May 21, each of the lanes could install up to 500 HHR terminals. The machines would generate a projected $6 million in revenue for wallets in their second year, according to clues.

A month before the vote, state Alcohol and Gaming Control Division Director Carla Cincotta sent a letter to Racing Commission Director Kyle Gustafson saying HHR devices are video slot machines. .

“The Racing Commission does not have the power to override state law and place gaming devices at tracks,” Stephenson said.

State law grants exclusive casino gaming rights to Native American nations, and they are already considering a lawsuit over this decision.

Lawmakers now say they are motivated to pass a bill specifically banning HHRs. What's more, the hints may ultimately hurt efforts to provide them with cash to offset the losses they say they will suffer from mobile sports betting.

“It's definitely changed things,” said Sen. Matt Klein, DFL-Mendota Heights and lead sponsor of the Senate sports betting bill. “Historical horse racing is basically slot machines.”

Stephenson agreed, calling HHR an understatement. “You don't even need to watch the race. “It’s a horse-themed slot machine,” he said.

The push to legalize mobile sports betting has been a balancing act of interests trying to muster enough bipartisan support to overcome opposition. It was assumed that to get support for approval financial support for the racetracks would be needed.

Major sports betting bills being considered this year would give exclusive rights to the state's tribes to partner with established betting platforms and allow Minnesotans to bet on their cellphones. The bills also include aid for roads. The House bill has $625,000 and the Senate included up to $3 million annually for road sharing.

There was a major breakthrough in sports betting recently when Stephenson announced a deal with Allied Charities of Minnesota that gave them about $40 million in tax breaks. In exchange, the charities agreed not to challenge the 2023 law that banned full-open features on e-tabs.

The state's tribal nations challenged the full-open feature because, they argued, it made electronic tabs too similar to video slot machines, in violation of their exclusive rights. The charities responded that banning the open access feature would hurt their revenue by slowing down e-pulltab players.

Republicans have been interested in providing aid to charities, so the deal was seen as a sweetener to attract the bipartisan votes needed to legalize sports betting. Republicans have also advocated both ways. One question now is whether the commission's decision will hamper efforts to help the roads. Stephenson thinks so.

“The path we were taking was to try to negotiate a compromise that everyone could live with,” Stephenson said. “This makes the road much more difficult. I think people will be much less willing to adapt to the slopes. But we'll have to see how everything else plays out.”

After the commission's vote Monday night, Andy Platto, executive director of the Minnesota Indian Gaming Association (MIGA), called the action “an extreme violation of legislative authority” and said the group “will study all available options” to stop tracks. to add the games. The commission had been warned.

In the March 1 letter, Cincotta told Gustafson that HHR is a casino game with video slot machines. Cincotta described HHR as a “multi-line video slot machine” with specific payouts for a player, not a parimutuel pool.

Stephenson was perturbed by the effective date the commission set to begin placing HHR machines, just after the Legislature adjourned.

“People shouldn't be mistaken: There will be no historic horse racing,” Stephenson said. “The Legislature will overturn it through a sports betting bill or a stand-alone bill and they will lose in court because they violated the law.”

The House sports betting bill already contains a ban on HHR. Klein said the Legislature will now be motivated to pass an outright ban, regardless of whether sports betting is legalized or not.

After Monday's vote, Running Aces CEO Taro Ito said in a written statement that he was satisfied. “At a time when many state politicians are pushing to exclude the horse racing industry from any significant benefits of sports betting legislation, (HHR) will improve track self-sufficiency, create new jobs and generate revenue.” additional for state and local governments without burdening taxpayers,” he wrote.