Are Western States Lagging on Sports Betting? Mountain StatesBy Robert H. Mann | Published: August 17, 2018 at 12:00 pm
This story is the second of two detailing the latest situations in the west. To read the first installment on the status in the West Coast states, click here.
Six states have either legalized sports betting or issued licenses for companies to offer sports betting since the Supreme Court on May 14 struck down the Professional and Amateur Sports Protection Act, making sports betting a states’ rights issue. All of those states are located in the east or south. Activity with regard to sports betting has been remarkably limited in the western states.
To no one’s shock, as the more western states see the revenue being generated in newly opened eastern sports betting markets, such as New Jersey and Delaware, legislators are growing increasingly eager to access, for their own jurisdictions, the tax dollars that sports betting can generate. Some states will require a change in gambling laws, others may need a state constitutional amendment in which voters could decide the issue.
As East Coast States Go Full Speed Ahead, When or Will Colorado or New Mexico Legal Sports Betting Arrive?
Arizona, like many of its western neighbors, is a state where tribal gaming is dominant. After PAPSA was overturned, government officials, including Governor Doug Ducey, quickly acknowledged that new laws would be needed to legalize sports betting and that this presented an opportunity to look at all tribal compacts in Arizona with the goal of modernizing and updating them.
Arizona has gaming compacts with more than 20 tribes that limit the types and number of games allowed at casinos and require the tribes to contribute 1-8 percent of gaming revenue to state and local governments. The state has taken in more than $1 billion since 2002, when casino gambling became legal in the state.
“This ruling (overturning PAPSA) gives Arizona options that could benefit our citizens and our general fund,” Ducey tweeted in May.
Attorney general Mark Brnovich, a former director of the state Department of Gaming, filed an amicus brief with the court last September, arguing the ban had violated states’ rights.
The next legislative session in Arizona begins on Jan. 14, 2019.
Brnovich said Arizona law generally bans gambling, with exceptions for things like the lottery, horse racing and compacts with tribes. Social gambling between friends is legal, but betting organized by a third party that takes a cut of the money is not.
The attorney general reminded residents in May that online gambling in the form of sports fantasy leagues run by third parties is illegal under Arizona law. However, online gambling in the form of casino games is legal in the state.
In Colorado, that state’s attorney general announced in late July that a legislative solution rather than a constitutional alteration would be needed to allow sports betting in the state.
“After conducting a full legal analysis, I have determined that commercial sports betting is not subject to state constitutional restrictions, but is prohibited gambling under Colorado’s current criminal code,” AG Cynthia Coffman said in a statement. “Whether or not sports gaming should be legalized in our state will ultimately be up to the legislature to determine.”
Her office began a legal analysis of sports betting soon after the U.S. Supreme Court ruled in May that PASPA was unconstitutional.
The analysis found that Title 18 in the Colorado Revised Statutes defines sports gambling as an “illegal activity,” and lawmakers would have to pass enabling legislation if they want to allow sports betting. Further she found that:
The Colorado Supreme Court has ruled that betting on horse and dog races is not a lottery, and there is no material difference between betting on horse and dog races and betting on other types of sporting events. Commercial sports betting therefore falls outside the restrictions in Article XVIII, Section 2.
Colorado voters previously voted against the idea of expanding gambling, after approving a 1992 constitutional amendment that granted “limited gaming” in Blackhawk, Cripple Creek and Central City. Coffman’s formal opinion says sports betting is not currently legal in those three cities.
“I think this is the opening of a much lengthier conversation,” said Democratic State Rep. Alec Garnett. “It’s important to understand where the Attorney General is coming from with a constitutional question.”
The Colorado General Assembly reconvenes on Jan. 4, 2019.
Here, as in many other western states, gambling laws are quite specific. The state constitution currently prohibits all types of gambling except for a state-sanctioned lottery, pari-mutuel betting typically used in horse racing, and bingo or raffle games operated by qualified charitable organizations. Like its neighbors, Idaho has numerous tribal gaming operations.
The Idaho State Lottery remains one of the few legal forms of betting in the state right now, and for that reason lottery officials seem to view sports betting in the state as unlikely.
“The way that the state constitution reads, absent to change, it’s an interesting decision for other states, but for Idaho right now, it’s going to be status quo,” David Workman, Idaho Lottery public information specialist, told KPVI in May.
Dustin Manwaring, Idaho State Representative for District 29, also said after the PAPSA ruling, “Do we want our policy in Idaho to be changed? Do we want to redefine the definition of gambling in our constitution to say it doesn’t prohibit betting on sports?”
Jan. 7, 2019 is the date for the next legislative session in Idaho.
This minimally populated state (just over 1 million in 2017) was among those partially grandfathered into limited sports betting when PAPSA, the now unconstitutional law largely banning single-team sports wagering everywhere except Nevada, was passed by Congress in 1992.
Sports tab games, sports pools and daily fantasy sports (DFS) are currently legal in Montana. The sports pools, although legal, demand that pools be designed so that the total of each participant’s wager(s) does not exceed $100, the total value of all prizes equals the total of all wagers, and the total value of all prizes awarded does not exceed $2,500.
Neil Peterson, executive director of the Gaming Industry Association of Montana, appears bullish on the future of Nevada-style sports betting in the state. Peterson told local media, “We have 150 legislators and so one might introduce a bill to allow sports betting in Montana.”
However, state senator Mark Blasdel (R), who is on the Gaming Advisory Council that examines and advises on gambling, noting the state’s population said, “I don’t think it’s a significant revenue source. It’d be another option if that’s what they put forward, but it all depends on what the framework and the legislation looks like. It’s hard to gauge what sort of revenue expanded sports betting would bring here.”
Currently, the state doesn’t tax or charge fees on bars or establishments that offer sports pools, nor is a permit required. The Gambling Control Division falls under the Montana Department of Justice. The division has a $1 tax on sports tabs, which aren’t nearly as popular as sports pools. And there’s only a $25 fee on Calcutta applications to help make sure the paperwork is processed correctly.
As in Washington, Montana law demands a 100 percent payout from those types of gaming.
Currently, the Montana Lottery also has two fantasy sports betting games that it operates on behalf of the Board of Horse Racing through a memorandum of understanding. Sales for those games are somewhat miniscule, with $43,417 spent on fantasy racing and $132,412 on fantasy football. The Board of Horse Racing gets $55,127 from those operations.
Although Peterson believes “We’re fairly small as far as gaming is concerned,” the state’s largest slot route (distributed gaming) operator is Las Vegas-based Golden Entertainment, a company now operating sportsbooks in numerous southern Nevada locations.
Golden, in its earnings call with analysts last week, said its distributed gaming business in Montana generated $15.9 million in the second quarter, an increase of 4.2 percent compared to last year. Known as Golden Route Operations (GRO) the company’s website notes it is one of the largest distributed gaming operators in the country with more than 10,500 gaming devices in approximately 980 locations across Nevada and Montana.
If Montana legalized it and GRO incorporated a sports betting platform into its current terminals, a significant business operation and a new tax source for the state would be imminent.
The Montana constitution dictates that the legislature meet in regular session for no longer than 90 days in each odd-numbered year. The next session begins Jan. 7, 2019.
In New Mexico, the lottery authority is examining the viability of offering new lottery games tied to sports results.
CEO David Barden said a contract attorney for the agency is examining what the authority can or cannot do legally when it comes to sports-related betting. Barden has floated the concept of a lottery game that would be tied to football game scores. However, he indicated it would be tied to football results randomly rather than involving any actual handicapping.
“We’re always looking for ways to increase revenues,” Barden said. He doesn’t, nevertheless, envision the authority becoming a sportsbook, offering bettors a full menu of wagering opportunities.”
Meanwhile, horseracing interests let by Ismael “Izzy” Trejo, executive director of the New Mexico Racing Commission, believes the state’s horse-racing tracks, which have slot machine casinos, should be permitted to offer Nevada-style sports betting.
As with most other states, it will fall on elected state legislators to pass laws that would license, regulate and tax sports betting. Again, as with other jurisdictions, allowing sports betting to include a mobile element would open the pathway to online gambling, if a state so chooses. In any state where Indian casinos are dominant, such gambling, including sports betting would most likely create a major increase of gambling outside the confines of the compacts (the contract between the state and the Native American casino operator) thus necessitating a new agreement between the parties involved.
In New Mexico, Native American-controlled casinos contribute revenue sharing of more than $150 million yearly. Lawmakers would clearly have to grapple with any decision that might be seen as a violation of the compacts and jeopardize those funds.
The next session of the New Mexico legislature begins Jan. 15, 2019.
Common sense would dictate that there’s little chance of sports betting ever coming to Utah and its largely Mormon constituency.
The Church of Jesus Christ of Latter-day Saints is opposed to gambling, including lotteries sponsored by governments. Church leaders have encouraged Church members to join with others in opposing the legalization and government sponsorship of any form of gambling.
Thus, Utah remains one of the few states without a lottery (Alabama, Alaska, Hawaii, Mississippi and Nevada are the others) and has no tribal casinos because the state outlaws all forms of gambling. State lawmakers have moved to specifically outlaw slot machine-like devices that have recently popped up in some state gas stations and truck stops and numerous arrests have occurred in recent months when they pop up in the state.
In addition, longtime Republican senator Orrin Hatch of Utah, one of the original architects of PASPA, has vowed to introduce new legislation that would regulate sports betting at a federal level.
Not that it matters to prospective sports bettors within Utah, the state legislature reconvenes on Jan. 28, 2019.
Another lightly populated state, Wyoming does allow gambling in the form of tribal casinos, bingo, pull tabs, live horse racing, historical horse racing, poker rooms (only two at last count) and card games for money among friends.
Apparently, there’s lots of gambling that happens in Wyoming, but Indian casinos only came into being when leaders sued the state on the grounds that they would be operating on federally controlled land, not on state land.
Put this state down as another that would need legislative action to allow sports betting.
State senator Drew Perkins of Natrona County is on record telling local media in May, “I think looking at potentially putting together a gaming commission (is a good idea). What is going on in Wyoming? How much gambling is happening? Is there revenue that should be coming to the state because of that. I think that is the one thing that can be looked at and I wouldn’t be surprised if it was.”
A recent Sports Illustrated poll included the Cowboy State as one of 32 that would have sports betting within five years. The Wyoming legislature convenes again on Jan. 8, 2019.