Senate committee advances bill to strengthen penalties for offshore online casinos, removes cryptocurrency language

A Montana Senate committee on Monday passed Senate Bill 555, which tightens enforcement tools against offshore companies offering illegal online casino gambling to Montana residents and redirects fines to the Department of Justice to fund investigations.

Sponsor Senator Vince Ricky introduced the bill as a way to target offshore operators that accept Montana players, collect gambling revenue without a Montana license and avoid paying state gambling taxes. "These online casino applications and websites produce untaxed gambling revenue for the companies offering them," Ricky said. He told the committee the measure does not target Montana businesses or people who play the games.

Jason Johnson, administrator of the Gambling Control Division at the Department of Justice, described the proposed changes as clarifying the statute that governs Internet gambling and said the division supports striking an explicit reference to cryptocurrency after the reference led to misunderstanding in the House. "That was a rumor that this bill would outright make cryptocurrency illegal. Now it doesn't do that at all," Johnson told the committee. He said the division added cryptocurrency only to reflect modern payment methods in the definition of money used for gambling and that the department is comfortable removing the specific reference to avoid confusion.

The bill distinguishes between free online gaming apps that do not accept real money and platforms that convert play into cashable winnings. "The difference is whether or not you pay to play," Johnson said. He testified the division's investigations show companies sometimes allow purchases of in‑game currency and permit cashing out into U.S. dollars. At 1 company, Johnson said, users could cash out up to $10,000 a day.

SB 555 increases the criminal penalties available against people who operate illegal Internet gambling operations that knowingly accept Montana patrons. Johnson said other states have had success by creating felony offenses aimed at company executives so cease‑and‑desist letters carry stronger consequences. "You have to make this a felony," he said, summarizing experience from Washington state.

Industry witnesses supported the bill as a means to protect licensed Montana gambling businesses and consumers. Shauna Helford of the Gaming Industry Association said the industry needs more tools to combat removing 1 company and seeing 2 or 3 more appear. John Iverson of the Montana Tavern Association said the bill protects tax revenue and Montana operators who follow the rules. Rhonda Wiggers of the Montana Coin Machine Operators Association urged a "due pass."

Committee members asked how enforcement works. Johnson described the division's process: investigators set up accounts, use payment methods to confirm an operation is taking bets from Montana, then send cease‑and‑desist letters and refer cases as appropriate. He said the division has handled many cases with current staff and that moving penalty revenue to DOJ would support investigative work without adding a full‑time position. Johnson said the Department collected about $23,000 in fines and penalties related to this issue over a three‑year period.

The committee adopted an amendment that removes the bill's explicit references to "cryptocurrency" to avoid repeating confusion that stalled the measure in the House. After that amendment, the committee voted to pass SB 555.

Votes at a glance (items acted on in this meeting) - SB 555 (online gambling): Amendment to remove explicit references to cryptocurrency adopted by voice vote; bill passed by committee as amended. (Sponsor: Senator Vince Ricky; proponents: Jason Johnson, Shauna Helford, John Iverson, Rhonda Wiggers.) - SB 556 (ropeway safety board): Motion to pass failed (5 yes, 6 no); subsequent motion to table adopted by committee. - HB 502 (allied health professions consolidation): Committee passed the bill. (Sponsor: Rep. Greg Oblander.) - Multiple gubernatorial appointments and Senate resolutions were considered and concurred (SR 28, SR 41, SR 44, SR 52, SR 8 and facility finance/resolution items); committee approved confirmations recorded in the hearing record.

Why it matters: Committee backers said the bill aims to stop offshore operators that profit from Montanans without oversight or tax contributions, and to give DOJ clearer criminal authority and a financial mechanism to investigate and enforce. Opponents did not appear in the hearing; committee members urged care to avoid second‑order effects on legitimate payment technologies.

The committee record shows the Senate will next transmit the measure with the committee's recommended amendment. If enacted, DOJ would be authorized to pursue stronger criminal penalties against operators who knowingly run unlicensed Internet gambling services that accept Montana customers.