Montana Lottery Sued by Company that Wants Booze-Free Sports-Betting License

Posted on: January 16, 2020, 02:36h. 

Last updated on: January 16, 2020, 03:18h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

A lawsuit filed against the Montana Lottery this week threatens to heap further delays on the launch of the state’s sports betting market.

Governor Steve Bullock signed a bill into law last May that legalized sports betting, and gave the Lottery powers to oversee it. But Billings-based investment group Arete says there was nothing in the bill that prevents it from applying for a license.

The Lottery disagrees, arguing that only bars, taverns, and restaurants with specific liquor licenses are eligible.

Glaring Omission

Uniquely in Montana, most gambling is tied to liquor licensing. Businesses must have an alcoholic beverages license before they can conduct certain gambling activities, such as live card games, sports tab games, and video gambling machines. That means almost all off-reservation gaming takes place at bars and taverns.

In its original form, the bill merely stipulated that sports-betting applicants must possess an existing gambling operator license, which Arete says it does.

Casino.org has been unable to discover what type of gambling the company operates, although holders of gambling operator licenses who do not also have the required liquor license are permitted to offer bingo and keno, according to the Gambling Control Division of the Montana Department of Justice.

Arete is asking that the group be granted a sports betting license without the alcohol permit, and is seeking an injunction preventing the Lottery from issuing any sports betting licenses until the lawsuit is resolved.

Lottery Doing Its Job

The Lottery counters that the bill gave it authority to establish a set of regulations to govern the new sports betting market and the licensing of its operators, and the amendment to the bill was its attempt to clarify that part of the law.

The Lottery noted that there was testimony on the bill that requested sports betting be permissible in bars and taverns only, which demonstrated that this was the intention of its authors, it said.

It also questions the allegation in Arete’s filing that the group “will sustain money damages if an injunction is not granted,” which it argues, “does not constitute irreparable harm under Montana law.”

The lawsuit could well prove to be an unwelcome distraction for the Lottery, which is tasked with overseeing the licensing of up to 1,500 locations throughout Montana and had hoped the market would be up and running before the end of 2019.