With the stroke of his pen, Montana Governor Steve Bullock made single-game sports betting legal in the Big Sky State on May 3rd 2019.
Montana became the first state to authorize and regulate sportsbooks this year, following last May’s landmark ruling by the U.S. Supreme Court which repealed a federal ban on the industry.
Under the Professional and Amateur Sports Protection Act (PASPA) of 1992, only Nevada was permitted to offer full-scale sports betting, while Montana, Delaware, and Oregon received exemptions for parlay-style wagers operated as a lottery. But with PASPA struck down by the Court last May as an unconstitutional violation of states’ rights, Montana moved to join the growing list of jurisdictions to take full advantage of their newfound freedom.
Montana Opts for Brick and Mortar + Online Betting
When he learned that House Bill 725 had received the Governor’s assent, state representative and sponsor Ryan Lynch (D-76) pledged that the people of Montana will be well-served by legal wagering:
“It’s a good day for Montana to be able to see sports betting in the marketplace. I think Montanans will enjoy the new aspect of watching sports for entertainment as well as betting on it.”
Under the new law, Montana’s collection of 10 licensed casinos operated by federally recognized tribes will be eligible to apply for sportsbook licenses. Additionally, over 100 bars, taverns, and restaurants currently permitted to offer video gaming terminals (VGTs) can add sportsbook kiosks.
Online / mobile betting via websites and apps will also be available to any bettor over the age of 18 who is physically located inside one any licensed establishment.
Governor Backs Single-Operator Lottery Model
Bullock considered two sports betting bills approved by the Legislature before choosing to endorse HB-725.
Senate Bill 330 called for a multiple operator model akin to the thriving sports betting industry set up in New Jersey. There, privately-owned bookmakers like William Hill U.S., DraftKings, and FanDuel compete, and the state collects licensing fees and taxes on gross gaming revenue.
Conversely, HB-725 authorizes a single entity – Montana’s current lottery operator Intralot – to exclusively operate sportsbooks over a period of seven years.
Bullock chose to veto SB-330 and sign HB-725, a decision he explained in a subsequent letter to legislators:
“As Montana enters this new market, the Lottery’s proven track record of responsibility and integrity makes it the best choice to govern our first foray into sports wagering.
I fully expect that in two years, the legislature will assess the status of sports betting in our state and, if appropriate, entertain different and additional models like that envisioned by SB 330.
But until then, the market can only support one model if it is to succeed.”
Intralot has forecasted $65 million in total handle over the first year of betting, with Montana retaining approximately $3.7 million in revenue after player payouts and operational expenses.
Lottery officials expect handle to climb to $87 million by 2023, which would increase state revenue collection – funds will be contributed to the state treasury and scholarship initiatives – to $5.4 million
In his veto letter, Bullock cited higher revenue projections in explaining his preference for a single-operator setup:
“Like the private model, the Lottery model protects the taxpayer from risk. But the Lottery model builds on existing infrastructure and is projected to return significantly more revenue to taxpayers.
By contrast, the private model could risk favoring market entrants with the most resources to advertise and promote their products.
In that environment, competition between well-heeled, international purveyors of gambling could lead to a fragmented market with competing sportsbooks spending most of their profits on acquiring players-leaving little margin for return to the taxpayer.”
Despite Bullock’s bullish stance on Intralot, critics of Montana’s planned sports betting monopoly have already emerged.
Gaming Industry Association of Montana (GIAM) executive director Neil Peterson spoke with the Great Falls Tribune after HB-725 was signed, calling on lawmakers to revive the multiple-operator model down the road:
“We’re hopeful that the Legislature will take another look at the private model. We think that’s where sports betting ought to be positioned, not as a government-run operation.”