Montana Sports Betting Bills Advance In House, Senate

• Both chambers of the Montana Congress have advanced sports wagering bills.
• The bills limit MT sports betting to pari-mutuel or “sports pool” style wagering.
• The state has until May 1 to advance any sports betting legislation to the Governor’s desk.

HELENA, Mont. – Compared to many states, Montana is in an enviable position re sports wagering legalization. As one of the few states originally exempt from the Professional and Amateur Sports Protection Act (PASPA, 1992), the state doesn’t need total congressional approval to legalize all forms of sports betting.

However, Montana lawmakers still have to legalize so-called single-game sports betting (aka “Vegas-style” sports betting), which is admittedly the only kind most bettors care about. Currently, the Montana House and Senate have advanced two separate sports wagering bills that seek to do just that. After a fashion, at least.

On Saturday, HB 475 passed the House by a vote of 88-10. The following Monday saw the Senate pass a competing bill, SB 25, by a vote of 36-14.

The next step is for these bills to be approved by the other chambers. The House bill must be approved by the Senate, while the Senate bill must be approved by the House. Should this happen, the bills would go to Governor Steve Bullock (D), who could then sign or veto them.

Given Bullock’s historical support for sports wagering products, it seems like a sure thing that if either (or both) of the bills makes it that far, the Governor will sign them. Bullock was Montana’s Attorney General before becoming Governor of the state, and in 2009, he worked to exempt Montana’s existing sports pools from the NCAA’s various prohibition-based policies.

Pari-Mutuel Sports Betting Vs. Traditional Sports Betting

One of the ways that Montana breaks from the pack of other states courting sports wagering legalization is in the exact kind of betting the state is actually considering. Most states seeking to regulate sports wagering are busy installing the traditional type we’re all used to.

However, Montana is taking a different tack. Both of the state’s legislative proposals specify that only pari-mutuel sports betting (aka sports pool betting) is being considered. That’s not quite what most Montana sports betting enthusiasts expect.

Most sports wagering of the single-game variety works on the basis of house odds. In this model, a bookmaker sets lines and is on the hook for all payouts, regardless of whether or not said book makes any money. If a book has a bad month, it could end up in the red, having paid out more in winnings that it collected in lost bets and vigorish (aka the “house take”).

With pool-based – or pari-mutuel – betting, it’s not possible for a bookmaker to take a bath. Their money is raked off the top, and bettors are paid out on a sliding scale. This scale, the “pool,” is a function of how much money has been paid into the pot by the players.

The most familiar pari-mutuel betting model in the United States is that employed by racebooks. Horse racing betting is almost always conducted via the pari-mutuel system.

Pari-mutuel wagering can be desirable for bookmakers, as it guarantees profit for the sportsbook in question (provided the actual betting volume is enough to cover expenses, which isn’t always the case at aging racetracks and the like).

The other side is that the rake will often have a lower ceiling than the profit margin a traditional, savvy sportsbook might garner. In other words, pari-mutuel sports betting is a sure thing, though it doesn’t have the potential payoff that riskier options might.

How The House And Senate Bills Differ

The Montana House and Senate sports wagering bills are only substantively different in one key way: administration. The House bill grants full oversight of legal sports betting to the state lottery. This guarantees a larger take for Montana, as all lottery revenue goes to the state as a matter of course.

Under the HB 475 proposal, the state would receive 85.75% of all sportsbook revenue. Rep. Ryan Lynch (D-Butte), sponsor of the bill, reckons that this model would generate $5.4 million in annual funds by 2023.

Conversely, SB 25 would privatize two sportsbooks, taxing their adjusted gross revenues at an 8.5% rate. Unlike the House bill, the Senate bill is estimated to generate just about $1 million for the state via annual taxation.

The big difference is in down-market money, according to bill sponsor Sen. Mark Blasdel (R-Kalispell). Blasdel sees sports wagering kiosks drawing crowds to Montana’s various bars and saloons statewide, boosting area economies through ancillary or tangential spending.

Which tack will win out remains to be seen, though in order for Montana to legalize sports wagering this year, some version of either (or both) will have to hit Bullock’s desk by May 1.

News tags: Montana | Montana sports betting | MT HB 475 | MT SB 25