Senate committee hears conflicting testimony on bill to authorize online fantasy sports and wagering

Helena — The Montana Senate Business and Labor Committee on April 1 heard testimony on Senate Bill 551, a proposal to authorize online fantasy sports contests for Montana residents and give the Department of Justice licensing and rulemaking authority for those contests and related online activity.

Sponsor Sen. Forrest Mandeville, who introduced the bill, told the committee fantasy sports should be treated differently from gambling. "Fantasy sports is a game of skill. It's not gambling," Mandeville said, briefly summarizing the bill's definitions and noting the measure sets an 18-year minimum age for participants and requires that the "value of all prizes and awards is established and made known in advance of the contest." He said the measure directs some license-fee revenue toward property tax relief but acknowledged the fiscal effects depend on the forthcoming fiscal note.

The bill prompted sharp opposition from representatives of Montana's brick-and-mortar gaming industry, tavern interests and other witnesses who said the measure would expand gambling and create enforcement challenges. A witness identifying himself as a casino representative told the committee, "We rise in opposition to Senate Bill 551 to yet another expansion of gambling, period," and argued the legislation "launches all sports betting online," would undercut in‑state gaming businesses and divert tax revenue to national and international operators.

John Iverson of the Montana Tavern Association added concerns about integrity and enforcement, pointing to recent legal and regulatory controversies in other states and college-sports harassment tied to wagering. Iverson warned that some of the smaller operators that could enter the market "are not as ethical in how they operate," and said provisions that require only "reasonable steps" to prevent problematic conduct are insufficient.

Departmental and fiscal questions were raised during the hearing. Jason Johnson, who identified himself as the administrator for the state's tax/system effort and said the set-up cost for new license and tax account types would be substantial, reported a planning estimate of "a $2,000,000 expense for new license types and tax types in our system" and projected roughly "$27,000 a year" in recurring tax revenue based on adjustments from Iowa figures. He said the governor's budget office was reviewing a fiscal note.

Committee members pressed witnesses about enforceability, age verification and whether carving out certain online activity in the bill's definition could be read to exempt "online sports wagering" from the state's gambling statutes. Opponents repeatedly pointed the committee to language on page 12 that they said could be interpreted to treat some online sports wagering as not falling under the state's definition of gambling; sponsor Mandeville countered that the bill contains multiple carve-outs and that Department of Justice rulemaking will refine the regulatory details.

No formal action or vote was taken on SB 551 during the hearing. The committee heard there will be a formal fiscal note shortly and that department rulemaking authority in the bill would be used to develop licensing, fee and enforcement details if the Legislature advances the bill.

Votes at the hearing: none (hearing only).