Minnesota imposes 22% tax on mobile sports betting net revenue

On April 22, 2025, the Minnesota State Legislature introduced Senate Bill 3414, a significant piece of legislation aimed at regulating and taxing mobile sports betting within the state. This bill comes in response to the growing popularity of sports betting across the United States and seeks to establish a legal framework for online wagering while generating revenue for state programs.

The primary purpose of Senate Bill 3414 is to impose a 22 percent tax on the net revenue generated by mobile sports betting operators. This revenue is defined as the total cash and cash equivalents received from wagers, minus payouts made to winners. Notably, the bill exempts wagers placed on Indian lands from state taxation, recognizing the sovereignty of tribal nations in Minnesota. This provision has sparked discussions about the balance between state revenue generation and tribal rights.

Key provisions of the bill include the establishment of definitions for terms such as "cash equivalent," "mobile sports betting operator," and "sports betting net revenue." These definitions aim to clarify the scope of the legislation and ensure compliance among operators. Additionally, mobile sports betting operators are required to file monthly returns detailing their wagers and tax obligations, promoting transparency and accountability in the industry.

The introduction of this bill has not been without controversy. Opponents argue that the tax rate may deter potential operators from entering the market, limiting competition and consumer choice. Supporters, however, emphasize the potential for significant revenue generation that could be allocated to public services, including education and infrastructure.

Economically, the bill could have far-reaching implications for Minnesota. By legalizing and taxing mobile sports betting, the state could tap into a lucrative market that has already proven profitable in other states. This move could also create jobs in the tech and gaming sectors, further stimulating the local economy.

As the bill progresses through the legislative process, stakeholders from various sectors will be closely monitoring its developments. The outcome could set a precedent for how Minnesota approaches gambling regulation and taxation in the future. With the potential for both economic benefits and social implications, Senate Bill 3414 represents a pivotal moment in the state's legislative landscape.