Washington State moved closer Monday to pass sweeping legislation that would authorize legalized sports betting on a tribal-only basis, on premises only — but not without considerable opposition.
The bill, ESHB 2638, advanced out of the Senate Committee on Labor & Commerce at a hearing Monday and will be sent to the Senate’s Ways and Means Committee for review. Earlier this month, the bill passed by an overwhelming margin of 83-14 in the House.
While the committee voted a parallel bill, SB 6394, out of committee and onto the Senate floor Feb. 13, Senate leaders agreed to table a full vote to allow the House to take the lead on sports betting, the Seattle Times reported. The bill must pass both chambers before it heads to Gov. Jay Inslee’s desk for approval.
Last July, legislators in North Carolina passed a tribal-only bill that was later signed into law by Gov. Roy Cooper. The bill, however, is limited in scope as it only authorizes two casinos in the Tar Heel State to offer legalized sports wagering.
By comparison, as many as 29 tribal gaming facilities across Washington could offer sports betting under the bill. The list includes heavyweights such as Muckleshoot Casino Resort in Auburn, Tulalip Resort Casino in Marysville and Emerald Queen Casino in Tacoma, all of which are located within a 40-mile radius of Downtown Seattle.
All tribes with compacts with the state that wish to operate sports wagering will be able to re-negotiate their compact after the passage of the bill.
Will licensed card rooms be shut out?
Prior to the vote, the committee heard from Rep. Strom Peterson (R – 21st district), lead sponsor of the House bill. When the bill was debated in the House, Peterson noted that the two biggest concerns centered around problem gaming issues and access to sports betting among underaged bettors.
“Gambling brings with it the threat of addiction and corruption,” said Sen. Karen Keiser, chair of the Labor & Commerce Committee. “That’s why it’s wise for our state to take a very small first step and to work with our trusted partners who have shown their ability to contain the problem of addiction and thwart the threat of corruption.”
Sen. Curtis King, the committee’s ranking member, asked Peterson why the bill prohibits the state’s 44 licensed card rooms from offering sports betting. Peterson responded that several members from both parties had concerns with expanding sports betting too quickly. By limiting the market to tribal-only casinos at first, the state could control the size of the market upon rollout.
This is big — and will be disappointing for many and celebrated by some.
Probably headed to Governor this session.https://t.co/jZA7bhnaIZ
— Sports Handle (@sports_handle) February 14, 2020
“It seemed that my colleagues on both sides of the aisles were really concerned about the expansion of gambling,” Peterson said. “This was a good middle path, a narrow path to take this on, to investigate it and see how the citizens of Washington react to that.”
The bill received strong opposition from Nevada-based Maverick Gaming LLC, which has purchased more than a dozen card rooms over the last year. Vicki Christophersen, a lobbyist with Maverick Gaming, argued that the card rooms will be unfairly excluded from the market if it is limited to operators on a tribal-only basis.
She also took issue with an amendment adopted Feb. 13 that includes an emergency section aimed at fast-tracking sports betting. The section provides $6 million in funding to aid the Washington State Gambling Commission in conducting investigations.
The sum of six million dollars is appropriated from the general fund–state for the fiscal year ending June 30, 2020, and is provided solely for expenditure into the gambling revolving account. The gambling commission may expend from the gambling revolving account from moneys attributable to the appropriation in this section solely for enforcement actions in the illicit market for sports wagering. The appropriation in this section constitutes a loan from the general fund to the gambling revolving account that must be repaid with net interest by June 30, 2021. — ESHB 2638, Amended Section 14.
However, Christophersen argued the clause was written to simply prevent the public from weighing in on the subject.
“We cannot fathom why there needs to be a monopoly provided on a system to bet on sports,” Christophersen testified. “This proposal has no inclusivity, no tax revenue and no public voice.”
Sen. Maureen Walsh, a Republican from the 16th District, expressed disappointment that the bill doesn’t open the market to other Washington operators beyond the tribal casinos. A bill that limits sports betting to the tribal entities could also shut down businesses in some of the state’s most rural areas, she added.
“Here we go again down this path that is extremely counter-intuitive to the goals we’re trying to reach for equity and fairness in this state,” said Walsh, who voted against the bill.
Others on the committee supported the emergency clause as a mechanism for helping the commission combat illicit activities. Since neighboring Oregon has already legalized sports betting, it is incumbent on Washington to protect the revenue of its sovereign nations, said Sen. Rebecca Saldaña (D-Seattle).
“Protecting consumers is critical, and our approach is about integrity and intentionality about how we allow sports betting in Washington,” Saldana wrote in a statement provided to Sports Handle. “With sports betting activities only at tribes’ brick and mortar facilities, they will be doubly regulated — internally by the tribes as well as by the state Gambling Commission.”
But the lack of any mobile sports betting component, thus restricting wagering to on-premises, runs contrary to trends in other states, such as New Jersey and Pennsylvania, where mobile wagers have accounted for nearly 90% of all betting handle. Another state with a large tribal gaming premises, Michigan, legalized mobile sports betting at the end of 2019 and will allow tribes to offer mobile sports betting statewide with only licensed partner apiece, should they choose to go that route.
The legislative session is scheduled to end on March 12. If the bill passes the full Legislature while it is in session, the governor has five days to take action on it.