Minnesota’s gambling laws are heavily rooted in their commitment to promoting tribal casinos operated by Native American tribes under federal law. In a nutshell, casinos are only legal if they are operated on tribal land.

Minnesota’s gambling options are quite limited, only allowing for tribal casinos, pool betting on horse racing, the state lottery and charitable gambling. Despite this, with 38 tribal casinos available across the state, Minnesota sees a healthy revenue of around $839 million annually. Online gambling is not regulated at state level, which creates a bit of a legal grey area as locals can still access online casinos through international casino sites.

Gambling winnings are considered taxable income just like your monthly salary. This means you’ll need to report your winnings on your state income tax return and pay taxes based on your income tax bracket. Minnesota’s tax rates range from 5.35% to 9.85% depending on your total taxable income per annum.

Here’s where things take an interesting turn though compared to Illinois revenue collection. Tribal casinos are operated by Native American tribes and are seen as sovereign entities. This gives them a degree of self-governance. The Indian Gaming Regulatory Act (IGRA) of 1988 generally prohibits states from taxing tribal gaming revenue. The state therefore generates revenue through collecting payroll tax from casino employees and individual tax from winnings.

These differing laws around gambling impact each state’s bottom line as well as their resident’s ability to exercise freedom of choice. Illinois benefits hugely from the revenue generated by incorporating broader forms of gambling into its tax base. Minnesota sees less annual revenue because income is restricted primarily to tribal gambling and the lottery, and must then be shared between tribal revenue sharing, and the local government.

Restrictions regarding certain forms of gambling can also influence consumer behavior, with residents of one state potentially crossing borders to access activities not permitted in their home state.

It also means locals potentially expose themselves to dangers online by accessing international sites that operate outside US jurisdiction. There is a lack of consumer protection and no guarantee around fair gambling practices. This makes accessing these sites riskier than simply allowing them to operate under regulations.

Gambling law is fragmented across the United States but it can be surprising when nearby states take such different stances. Of course the cultural and socio-economic backgrounds of the two states heavily influence the law, with Minnesota understandably having to respect and prioritize tribal casinos. But the playing field could be levelled a little more if we see the passing of the sports betting bill in Minnesota in 2025.

Until then, it would be wise to enjoy the forms of gambling currently legal in your state and avoid exposing yourself to unnecessary risk through offshore casino sites.