Overview: Online Sports Betting In Montana
Montana sports betting is confined to its bars and taverns. Montana’s population is small for its size, and it won’t steal bettors from surrounding states when Nevada is nearby. Bars and taverns benefit the most from sports betting legalization. Those businesses can get their patrons to stay a little longer and spend a little more by offering sports betting. Montana’s lottery-run mobile app is also confined to businesses that put sportsbook kiosks in their places of business.
However, Montana almost had a private-run sports betting model. The original plan was to create two dueling sports betting systems. One is the lottery-run system that Montana has now. But the other was a private-run sports betting industry vetoed by Governor Steve Bullock.
Montana’s Dueling Sports Betting Proposals
Sports betting in Montana began with two sports betting bills:
These bills had different tax rates, too. Representative Lynch’s House bill is the one that passed. It allowed the Lottery to direct any sportsbook winnings to the state’s general fund. Part of those winnings would also fund STEM scholarships. The Lottery would contract out the operation of the sportsbook, but the Lottery’s sportsbook would be the only one allowed in Montana’s bars.
Representative Blasdel’s Senate bill had a different vision. It would’ve taxed sports betting revenue at 8.5%. Montana’s Department of Justice would’ve issued licenses and overseen the industry like Gaming Commissions in other states. It would’ve looked like other sports betting industries around the countries.
Both bills made it to the Governor’s desk. Both bills would’ve kept sports betting confined to bars and taverns. So, why did the House bill succeed where the Senate bill failed?
|House Bill 725
||Ryan Lynch (D)
||Let the Montana Lottery offer sports betting
|Senate Bill 330
||Mark Blasdel (R)
||Let the Montana Department of Justice license private sportsbooks
No, The Democratic Governor Didn’t Embrace Socialism
Don’t send this article around trying to prove Montana is run by a socialist cabal. The two tiebreakers didn’t have anything to do with creating a planned economy. Governor Bullock’s reasons for selecting the House bill and vetoing the Senate bill were:
Governor Bullock cited agreement from legislators that the market could only support a lottery-run or private-run sports betting model. However, the lottery model won because the Montana Lottery already had the enforcement infrastructure in place to run sports betting. Governor Bullock’s veto cites security concerns as one of the reasons to favor the tried-and-true lottery over private companies.
But profitability was the main tiebreaker. One set of fiscal analyses found that both bills would raise similar amounts of money for the state’s general fund. However, the House bill was projected to earn $3-4 million for STEM scholarships. That’s an easy tiebreaker.
Here are the main differences between a lottery-run and private-run sportsbook industry:
- Room for one proposal
- Additional funding for STEM scholarships
Although the lottery-run system doesn’t seem favorable, individual circumstances can make it a reasonable choice for certain states. The revenue difference doesn’t matter to Montana, because it doesn’t have the environment for a large sports betting industry, anyway. It would matter more if Montana was surrounded by competitive sports betting industries.
|One Government-run Sportsbook Brand
||Multiple Private Sportsbook Brands
|Higher tax rate
||Lower tax rate
|Lower total revenue
||Higher total revenue
Private Sportsbooks Could Come To Montana
Adopting the Lottery model doesn’t mean that Montana is forbidden from adopting the private model later. The Governor said that Montana could reconsider it in two years. However, Montana’s sports betting industry already began opening up at the end of 2020. A Montana judge ruled that the Montana Lottery couldn’t limit sportsbooks to businesses with liquor licenses. Since the Legislature didn’t make that rule, the Lottery couldn’t either. That seems to run counter to the bill directing the Lottery to set industry policy. So, expect appeals.
Judicial opinions aside, we also have the benefit of hindsight. Private-run sportsbook industries tend to markedly outperform lottery-run industries. The competition between private companies generally leads to:
However, a private-run sports betting model is less important for Montana than
- Better odds
- Attractive sportsbook bonuses
states with larger markets. The main benefits of Montana sports betting go to Montana businesses that keep their customers longer. The private-run model would also have to make up for the STEM scholarship funds that the Lottery-run model funds. It’s worthy of consideration, and Representative Blasdel’s proposal may not be the only one on the table. But there’s no push to do it now. At the time of this writing, Montana has these issues on the docket:
Tribal sovereignty, abortion, and healthcare are all bigger issues than sports betting. So don’t expect private-run sports betting to be a legislative priority.
Online Sports Betting In Montana
Montana allows mobile sports betting in licensed facilities. That means businesses that have secured sports betting licenses and installed kiosks. It’s basically retail sports betting with a fancy smartphone feature. The Lottery runs the only online sportsbook, whose proceeds go to the general fund and STEM scholarships. Business’ sports betting kiosks split revenue among themselves, the State, and the sportsbook operator contracted to provide the kiosks. The profits are modest, but local restaurants are happy to offer something new to their customers.
Sports betting is never going to be a massive moneymaker for Montana. But bettors who want to get in on Montana’s sports betting action can read up on our Gambling 101 guides. It’ll pass the time at the local sports bar – especially after the pandemic.