Montana businesses gear up for sports betting

Legal sports betting has arrived in the state of Montana, and Chris Gillette, owner of Fatt Boys Sports Bar and Casino in Kalispell, said he is “pumped” about being able to offer sports wagering at his establishment.

“Our facilities are designed for sports betting,” he said. “It will bring a lot more excitement to our facility.”

Gillette said he hopes sports wagering will be in place before the NCAA men’s basketball tournament in March. But the Montana Lottery is still unsure when Montanans will be able to place their first bets.

“We’ve been working a long time for this and we’re excited to see that hard work pay off and excited to start the process of launching sports betting,” Montana Lottery Director Angela Wong said in a Dec. 9 press release.

The Montana Lottery began taking applications for sports-wagering licenses on Dec. 9, yet the Lottery – the only entity in the state legally authorized to offer sports betting – is still trying to figure out when it will have its Sports Bet Montana sports-wagering equipment installed in licensed Montana sports bars and casinos.

Jennifer McKee, communications manager for The Montana Lottery, said there is no timetable for when Montanans will be able to participate. The Lottery has to install the infrastructure and perform extensive training to go with the equipment.

“We want a responsible rollout of sports-betting equipment and sports betting in general,” McKee said, adding the Lottery still wants to “have Montanans participating in sports betting as quickly as possible.”

She said there is a chance customers in Northwest Montana will be able to place bets by March.

When the sports-betting equipment is installed and ready for use, gamblers will have two ways to place their bets: either at Sports Bet Montana wagering kiosks or through a phone application. Bettors will have to be on the premises of the licensed establishment to place bets on their phones, as per the new sports-betting regulations. Online gambling remains illegal in Montana.

Having a full liquor license is a prerequisite for applying for a sports-wagering license, a point of contention in the rule-making process after Montana’s sports-wagering bill was signed into law by Gov. Steve Bullock on May 3, 2019.

Since gamblers will be required to go to a business like Fatt Boys to place their bets, Gillette said he wants the state to “get it right” as they move through the process.

“I don’t want it to be rushed,” Gillette said. “The last thing you need is to get everything started and then it goes down.”

After legalizing sports betting through House Bill 725 in early 2019, Montana is officially part of a recent wave of states legalizing sports gambling.

The wave came on the heels of a May 2018 U.S. Supreme Court decision that paved the way for sports betting by declaring the Professional and Amateur Sports Protection Act unconstitutional. The 1992 act was a blanket prohibition on state-sponsored sports gambling in all states except Nevada, though it still allowed legal sports pools to continue in Montana, Delaware and Oregon.

Now, 14 states have legal, regulated sports-betting industries, and Montana is one of six states planning a 2020 launch, according to the legislative tracker on the website Legal Sports Report.

Legal Sports Report has also tracked state-by-state tax revenue from sports wagering since June 2018, which totaled $140 million across the nation from June 2018 through Dec. 31, 2019. However, as no individual state with legalized sports wagering has the same regulatory system as Montana, no state offers a good predictor for the revenues the Montana Lottery could expect.

For example, while Oregon’s state lottery also runs its sports wagering program, Oregonians can bet from anywhere with a mobile device. Mississippi’s is more restrictive, only allowing sports wagering in a very limited number of casinos, according to a state-by-state rundown of sports-betting laws on ESPN.com.

Despite the lack of a good comparison point, the House Bill passed by the Montana Legislature estimated sports betting could bring in $3.7 million in annual tax revenues.

The Lottery will tax sports wagering just like it taxes other lottery games, McKee explained, which is a 6.9% state tax and a 24% federal tax on prizes greater than $5,000, or a 24% federal tax on prizes $600 or over for those who cannot produce Social Security or tax identification numbers.

But regardless of what the state collects in tax revenue, sports wagering is a big deal to a business like Scotty’s Bar in Kalispell.

Scotty’s featured simulcast horse racing and off-track betting until last June, according to owner Karla Levengood-Swank. Montana Simulcast Racing announced last week it had ceased operations as of Dec. 31.

“Horse racing is very expensive to run,” she said, and it is “dying” as the older generation moves on and younger generations are just interested in bigger races such as the Kentucky Derby.

But sports wagering can fill in the hole left behind by horse racing. Levengood-Swank said it will be a “good alternative,” adding she is “excited and a lot of customers are excited.”

When the Inter Lake spoke to her on Jan. 2, she had just submitted her $50 application to the Montana Lottery for a sports-wagering license.

Yet Levengood-Swank still had a lot of questions about the process. She did not have an idea of when the Lottery would come to install the Sports Bet Montana kiosks and train her and her employees, nor did she know the variety of sports wagers the Lottery would offer.

“It’s been promised for so long,” she said. “It’s an unbelievable amount of money the state is missing out on because they’re so behind the ball.”

“It’s gonna take a while to take off until people get comfortable,” she added.

McKee said the interest from Montana bars and casinos is about what the Lottery expected, saying it is “not a waterfall” but “a steady stream” of applications since the Lottery began accepting applications.

The Lottery is currently preparing for equipment installation and training. According to Brian Pellen, sales representative for Montana Lottery, sales agents and trainers will begin working in the area that submits the most applications. This means Northwest Montana will probably be behind cities like Billings or Missoula.

“We’re not going to leave a location until the people who have the equipment know how to use it,” McKee said.

As sports gambling offers a new source of potential gambling addiction, McKee emphasized that the Lottery takes responsible gambling seriously. “It’s truly built into everything we do,” she said.

She said Sports Bet Montana has a tool that lets gamblers put themselves on a “no play list,” so people can prevent themselves from wagering if it becomes a problem.

“We do not want Montanans making bad financial decisions,” McKee said.

Reporter Colin Gaiser may be reached at cgaiser@dailyinterlake.com or 758-4439