Montana committee hears bill to legalize online fantasy sports; opponents warn it opens door to wider online sports wagering

Senator Forrest Mandeville, sponsor of Senate Bill 551 and a member of the Senate Business and Labor Committee, told the committee the bill “will allow online fantasy sports participation for the residents of Montana.” The bill, as presented, defines fantasy sports as games of skill, gives the Montana Department of Justice rulemaking authority, sets an initial license fee of $5,000 and a 6.75% tax on vendor revenues, and requires participants to be at least 18 years old.

The bill’s sponsor said the measure includes safeguards in its definitions and that rulemaking will fill in administrative details. “Read the bill,” Mandeville said in closing, urging members to look at the statutory language and department rules that would regulate the activity.

Why it matters: The committee heard sharply divided testimony about whether SB 551 is a narrow legalization of fantasy‑sports contests or a broader expansion of online sports wagering. Opponents representing Montana gaming businesses said the bill’s text and carve‑outs would let national and offshore operators undercut in‑state casinos, taverns and the lottery. Proponents (none testified in the room) did not appear; the Department of Justice provided an informational witness.

Opponents raised three central concerns. Shauna Helfert, representing the Gaming Industry Association, told the committee, “Don’t be fooled today that this is just a friendly expansion of gambling for fantasy sports.” Helfert argued the bill’s definitions (she pointed committee members to language starting on what the draft calls page 12, line 13) appear to exclude online sports wagering from the statutory definition of gambling and thus could remove standard gambling safeguards and restrictions. Helfert also noted the proposed tax rate of 6.75% for online vendors compared with the current 15% rate applied to Montana video gaming machines and cautioned that the cheaper out‑of‑state competition could reduce revenue for local businesses.

John Iverson, representing the Montana Tavern Association, told senators that formats described in the bill (and in materials from other states) can look very similar to sports betting. He also raised concerns about enforcement and the potential for harassment of athletes tied to certain in‑game bets, citing press coverage and actions in other states. “This is indistinguishable from sports betting,” Iverson said of daily fantasy formats cited in other states’ experience.

Jason Johnson, administrator for the Gambling Control Division at the Montana Department of Justice, appeared as an informational witness and said the department submitted a fiscal note estimating a one‑time information‑technology expense of about $2,000,000 to add the new license and tax account types to the state system and projected roughly $27,000 in annual tax revenue in an initial year based on an Iowa revenue model adjusted for Montana’s population. Johnson said the fiscal note was under review by the governor’s budget office and would be available to the committee.

Committee members asked several questions about enforcement, age verification and revenue projections. Senator Curti asked about age verification technology; Helfert replied there is no foolproof system and underage users often bypass controls. Senator Weber asked Johnson to confirm the $2,000,000 estimate and the roughly $27,000 projected revenue; Johnson affirmed both figures and said the estimate used Iowa data adjusted for population.

Sponsor rebuttal and context: Mandeville disputed opponents’ characterizations, calling much of the testimony “fear mongering” and noting that similar frameworks exist elsewhere. He said departmental rulemaking will govern specifics and that 44 states allow some form of fantasy sports or related activity. He also argued fantasy sports and brick‑and‑mortar gaming serve different customer types.

What the bill would do (as presented to the committee): give the Department of Justice authority for licensing, investigations, fines and suspensions; set an initial license fee of $5,000; establish a vendor tax (6.75% in the draft presented); require participants to be 18 or older; include provisions on confidentiality, revenue definitions, and cross‑references to existing state gambling law. The bill as presented does not include an enacted amendment changing where tax receipts would be deposited; the sponsor said deposit could be amended depending on the fiscal note (he mentioned the possibility of directing funds to property tax relief, but said the size of revenues would determine appropriateness).

No formal committee action or vote on SB 551 was recorded in the hearing transcript segment provided. The hearing closed after the sponsor’s final remarks.

Provenance: The committee opened consideration of SB 551 at the start of the hearing and closed the SB 551 testimony at the end of the same panel; testimony and questions cited above come from the sponsor’s opening, opponents’ testimony, the Department of Justice informational witness, committee questioning, and the sponsor’s closing remarks.