The Gambling Control Division told the subcommittee it requests a slightly smaller 2027 biennium budget than the base the committee adopted, reflecting statewide present-law adjustments and lower fixed-cost estimates following DOJ centralization of some functions.

Jason Johnson, administrator of the Gambling Control Division, described a lean operation with 34 FTE and seven offices across Montana (Billings, Helena, Missoula, Kalispell, Great Falls, Bozeman and Glendive). Johnson said the division’s primary funding source is the gambling license fee account, supported mainly by video gaming machine permit fees. The division reported a projected fund balance near $3.0–$3.5 million for the biennium.

Johnson also provided an operations overview: the division operates a lab in Helena that tests video gaming machines and software, provides audits and criminal-background checks, conducts routine compliance inspections across the state, and performs outreach to help businesses and nonprofits comply with complex rules. Johnson said the division took a proactive outreach approach to veterans’ and fraternal organizations, visiting each organization statewide to improve compliance.

On policy challenges, Johnson said online, offshore gambling apps and sweepstakes-style offerings pose a major threat to Montana‑licensed businesses and create consumer‑protection and tax concerns. He told the committee the division is working with the gambling industry and its advisory council on draft legislative language to strengthen enforcement against offshore operators, and noted other states’ approaches that raise criminal penalties for corporate operators to deter offshore activity.

Johnson said Montana’s statutory framework for video gaming includes a 1987 provision that established a 15 percent tax on video gaming machines; the division reported that FY2024 receipts from the tax totaled about $83,700,000. He said gambling‑related revenues remain a significant contributor to state finances.

Committee members asked for clarification about case counts and legal filings: Johnson explained the difference between “gambling only” case counts (examples: complaints, applications, routine inspections) and a smaller subset that become legal cases pursued for fines or license actions. He said the division had 2,188 gambling-only cases and 28 matters that rose to legal cases in the fiscal period cited; the legal‑case number reflects cases that reached enforcement or administrative action.

The division said it is not proposing fee increases and intends to continue MOUs with Alcohol Beverage Control, Department of Revenue and other agencies to reduce duplication. Johnson said the division’s lab and audit staff also support other DOJ work on occasion — for example, auditors assisting Department of Criminal Investigations (DCI) investigations to avoid paying outside contractors.

“If we can help be a resource to businesses, we want to be that,” Johnson said, summarizing the division’s shift toward compliance assistance rather than an adversarial posture.

Lawmakers asked about the division’s capacity to implement potential statutory changes that would affect machine software or payout limits; Johnson said the division’s lab and approval processes are well‑established and he did not foresee an immediate fiscal need based on the legislation he had seen to that point.

The committee recorded the budget presentation and asked for follow‑up materials on joint management meetings with Alcohol Beverage Control and specifics of the operating‑cost shifts described earlier in the hearing.