As a sports betting proposal continues moving through the North Dakota legislature, it’s looking more and more like statewide digital sports wagering won’t arrive until late 2025 — at the very earliest. That is, if an amended version of HB 1234 moves forward and voters legalize sports betting on the 2022 ballot.
To recap, the North Dakota House in late February approved a pair of sports betting bills — one that would send the issue to the voters, and a second (HB 1234) that lays out the framework. Earlier in the month, the Senate shot down SB 2314, which would have given the state’s tribes exclusivity to mobile wagering.
And on Monday, when bill sponsor Rep. James Kasper introduced HB 1234 to the Senate Committee on Finance and Taxation, he pointed out some key changes he’d like to see, including giving local businesses with retail wagering (via kiosk) a 24-month head start on digital platforms, prohibiting the use of credit cards to fund mobile accounts, and banning betting on North Dakota college teams.
The bill would allow for kiosks at just about any business entity that wants one, from bars and restaurants to hotels or event centers, and has low tax rates — 6.75% on retail wagering and 10% on digital wagering.
Pushing for a digital waiting period
Kasper’s comments suggest North Dakota lawmakers not only want to give their businesses a leg up on sports betting, but that there is some concern about allowing digital operators into the state too soon. The original bill called for a 16-month waiting period for digital operators, but after hearing from local stakeholders, Kasper wants to up that number to 24 months. If passed, the effective date of the new law would be Aug. 1, 2023. From there, regulators would need to develop rules and license operators, which generally takes a minimum of four months (in the very best-case scenario), meaning the earliest possible online launch target would be late 2025.
“The DraftKings of the world, and the people who do mobile devices, they have absolutely no economic effect on our state other than taxes,” Kasper said in introducing his bill. “There is no work, except maybe some advertising. The kiosks, there are kiosk owners, they have to contact business owners in parts of our state, they have to provide support if they need it. … If mobile and retail start at the same time, then the mobile will garner 80-90% of the market, because there is no overhead and no catch-up and no lag time. In order to provide an opportunity for local business development … this bill provides for 24 months for kiosks to get started.”
— Sports Handle (@sports_handle) July 23, 2020
Illinois lawmakers included a similar provision in their sports wagering law, giving local casinos an 18-month head start on stand-alone mobile platforms, but in the end, both DraftKings and FanDuel found a way to circumvent the waiting period, aided by an COVID-related executive order to lift the in-person registration requirement.
Whether or not national operators would try to find a workaround in North Dakota is unknown.
DraftKings discourages delay, bans
Rebecca London, government affairs manager for DraftKings, didn’t directly address the idea that her company “has no overhead” or has “no economic affect” on a state other than taxes, but she did assert it’s been proven that a competitive market nets the most revenue and that any kind of ban on or impediment to wagering only helps the illegal market continue to thrive.
“DraftKings supports a sports wagering framework that protects consumers, generates maximum revenue for the state, and stamps out the pervasive illegal market,” she testified via video link. “There should be no unnecessary hurdles for consumers to bet in the regulated market. … it is crucial to allow for the ability to register and fund an account from a mobile device, and I would encourage you to allow people to register with a credit card, like they can in the illegal market.
“I would urge you to consider amending the ban on college sports. Wagers on college sports are happening in the illegal market … and consumers will continue to wager on the illegal market because it’s unlikely they will use multiple platforms.”
@CommonManRadio NV sports books lifted the ban on NV college sports betting 10 yrs ago to eliminate any thought that the fix could be in.
— Doug Wilhelm (@vegasbucks) April 29, 2016
Should North Dakota lawmakers choose to ban betting on local college, they won’t be the first — Illinois, New York, and Virginia are among more that a dozen states that limit betting on collegiate athletics in some fashion.
Multiple groups, including several tribes and a religious group, testified in opposition to the bill. The tribes, represented by the United Tribes Gaming Association, are opposed to statewide mobile gaming, suggesting it would hurt their retail business. Collette Brown, gaming executive director for the Spirit Lake Nation, pointed to e-tab machines as hurting the tribes’ business and said that adding yet another gaming option would cause further harm.
This bill is just “adding salt to our wounds. We have seen a 65% decrease in our Class III revenues and we cannot sustain that anymore.”
The hearing ended with no vote or resolution of the issues discussed. The North Dakota legislature is in session until April 28.