Montana First State of 2019 To Legalize Sports Betting

• Montana becomes the 10th state to give sports betting the green light.
• SB 25 and HB 725 authorize sports betting tabs and single-game betting, respectively.
• The Montana Lottery will administer single-game betting, while taverns and bars will offer sports pools and tabs.

HELENA, Mont. – While this past weekend was all about horse racing betting, things were a bit different in Montana as Gov. Steve Bullock signed SB 25 and HB 725 into law on Friday afternoon, legalizing sports betting in Big Sky Country.

Montana is the first state to legalize sports wagering in 2019, and it’s the tenth state in the US to legalize the pastime after the repeal of the federal ban (PASPA) in May 2018.

The Treasure State joins Nevada, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, Arkansas, New York, and Connecticut as having formally legalized the activity.

The latter three of these states, like Montana, have not yet launched any actual customer-facing sports betting services to date, however.

New Mexico also offers the pastime in a legal capacity, though the state’s situation is unique in that the legislature did not have to pass any new laws in order for tribes to open sports wagering parlors at tribal casinos.

Despite some uncertainty leading up to the passage of both bills, there was a feeling of inevitability as they went to the governor’s desk. Bill sponsors Sen. Mark Blasdel (R-4) and Rep. Ryan Lynch (D-76) both felt their laws would be signed together, and such proved to be the case.

While these two laws take different approaches to legalizing sports betting, they do not conflict. This allowed both to be signed, effectively giving sports wagering the green light via two distinct avenues.

How SB 25 And HB 725 Differ

These two bills – SB 25 and HB 725 – were passed without undermining one another because they effectively legalize Montana sports betting by two different tacks.

SB 25 calls for the legalization of sports tabs and pools.

Effectively, the law allows those retail venues with liquor licenses – like Montana’s many famous taverns – to operate sports pools and sports tab games. Sports tabs are taxed at a rate of $1 per 100 tabs sold and cannot exceed sales prices of $25 per tab.

Additionally, sports pool payouts are capped at $2,500, and the tavern operator can keep only whatever portion of the total that is necessary to compensate for administration costs. All taxes and expenditure reports must be submitted on a quarterly basis to the Montana state government.

HB 725 is the more publicly-anticipated law, which allows Montana residents and guests to experience full-service sports wagering. The Montana Lottery will oversee and administer single-game sports betting in the state.

Montana residents and visitors will be able to wager on professional and collegiate athletics (as well as amateur events like the Olympics) at any lottery retailer or certified self-service kiosk.

Sports betting will also be available over the Internet via laptop, desktop, and mobile betting apps.

The legal age to bet on sports in Montana is 18 years old, and the lottery will pay out a minimum of 45 percent of all handle as winnings. The remaining 55 percent is considered revenue for the state and is to be transferred to the Montana general fund.

Montana Sports Betting: A Guaranteed Moneymaker

Most states that have – or are considering to offer – sports wagering products tend to go with the traditional house-banked concept. Under this kind of betting (commonly called “Vegas-style” betting), the bookmaker sets the line, and this line is a contract.

This means that a sportsbook is compelled to pay out all wagers as advertised, whether that book makes or loses money on the transaction. These kinds of books can lose money as readily as they can make money, and inattentive or unseasoned books can actually be in the red for any given week, month, season, or year.

For traditional sports wagering shops, a hold – or “win” – of between five percent and seven percent is considered to be successful, and that’s the range of revenue they typically shoot for.

This is the type of wagering that the Montana Lottery will provide under the auspices of HB 725. That said, because the lottery is a state-owned enterprise, it operates on a much higher take, effectively preventing any sportsbook losses.

At Montana taverns operating sports tabs, however, there is similarly no real gamble on the operator side. These taverns are guaranteed their profits right off the top, akin to how racebooks function at horse tracks. In a pari-mutuel system of wagering, the posted odds are estimates of what the final volume will produce.

Pari-mutuel sports wagering limits how much a book can make, but it also prevents said book from ever actually losing money on any bets. This is a form of hedged betting product, itself a sort of sports wager that Montana’s taking with its industry as it steps into the post-ban world of sports betting.

For Montana’s popular taverns, this is a positive boon for preservation, as there is no chance that legalized betting will negatively impact any bar business’ bottom line.

Combined, Montana’s legalized sports betting products are estimated to generate * GMA_An-Examination-of-Sports-Betting-in-America-Forecast-of-Revenues-by-State_FINAL.pdf * between $6.6 million and $26.3 million in annual revenue for the state by 2023.

News tags: Montana | MT HB 725 | MT SB 25 | sports betting