Montana became the first state to legalize sports betting in 2019 and the ninth overall, when Governor Steve Bullock signed House Bill 725 on Friday. The Governor also vetoed a second sports betting bill, Senate Bill 330. The bill is effectively immediate; supporters hope that sports betting will be ready to go in the state by the football season.
The primary difference between the two bills is that under HB 725, the one that the Governor approved, the state lottery commission is in charge of sports betting, with the ability to authorize restaurants and taverns to have betting kiosks and mobile apps that can be used only on the premises. The Senate bill would have opened up the Montana market to private operators who could have opened sportsbooks.
In a letter explaining his veto of the Senate bill, Governor Bullock essentially said that the state needs to walk before it can run.
“For the market to succeed, Montana needs to enter the sports wagering market conservatively-adopting only one of the two models now,” Governor Bullock wrote in the letter obtained and published by Legal Sports Report. “If, in two years, the market can tolerate more entrants, then I fully expect the legislature will revisit whether a second model is prudent for our state.”
Under the Lottery model in HB 725, the state will have the ability to control, monitor, and protect sports wagering products and players through security and integrity protocols, policies around responsible gaming, and policies to ensure that sports wagering is competitive, transparent, and reliable. 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.
The lottery commission has done a good job up until now, Bullock is basically saying, so why change it up? I get the sense that there might be some lottery protectionism going on, but at least Bullock’s reasoning in the letter makes sense. Competition can be great, but I can see his point. Besides, Montana might not have the population base to support such widespread competition. To Bullock’s credit, he seems very willing to readdress the Senate bill once Montana’s sports wagering market matures.
Of course, the Montana Tavern Association is thrilled with what is happening, as sports betting will drive traffic to taverns and restaurants.
John Iverson, the Association’s counsel for government affairs, told the Associated Press, “Extra cheeseburgers; extra slices of pizza, a few more people filling seats. The actual revenue from the gaming isn’t going to be significant.”