Tribes, Gambling Companies Disagree on Online Sports Betting
Tribes support legalizing it, big companies oppose it, WI Assembly voted for it.
Mobile phone. (CC0).
A bipartisan bill to legalize online sports betting in Wisconsin is facing opposition from high-profile companies offering online sports gambling.
The legislation would allow Wisconsinites to place a sports bet via a cell phone or computer if the server used to host the wager is physically located on the state’s federally recognized tribal lands. Currently, sports betting is only legal at tribal casinos in Wisconsin.
If the bill becomes law, Wisconsin tribes interested in offering online sports betting “would need to renegotiate” their gaming compacts with the state. And those compacts would need to be approved by the federal government, according to testimony from Sen. Howard L. Marklein, R-Spring Green.
The bill passed the state Assembly on a voice vote without debate last month. It’s unclear if the bill will receive a vote in the state Senate.
The proposal is supported by several of Wisconsin tribes, including the Forest County Potawatomi and the Ho-Chunk Nation. But it’s opposed by some of the biggest names in the online sports betting industry, like DraftKings, FanDuel and BetMGM because of the power it would give tribes over online gambling in the state.
During the State of the Tribes Address last month, Chair Nicole Boyd of the Red Cliff Band of Lake Superior Chippewa Indians said Wisconsin residents spend an estimated “hundreds of millions of dollars” each year on illegal and unregulated sports betting.
She said the entities offering the products used for sports betting are located outside the state and provide no financial benefit to Wisconsin. She argued the platforms provide “little to no legal protection” for the people using them, leaving them open to fraud and consumer harm.
“By allowing a legal framework for mobile sports wagering through Wisconsin’s tribes, the state will see increased revenue through the state gaming compacts, and consumers will have the legal protection needed to ensure they receive fair play,” Boyd said.
The Sports Betting Alliance, a national trade association for online sportsbook operators, held a press conference about the bill on Monday.
Sports Betting Alliance President Joe Maloney said the bill would give tribes an unfair monopoly over online sports betting in Wisconsin.
“The consumer sees a number of benefits in any competitive marketplace, and (that’s) certainly not exclusive to online sports wagering,” he said.
The Sports Betting Alliance also testified against the bill in November, saying it would require providers to give at least 60 percent of revenues to the tribes.
The association’s testimony argues online sports betting is a low-margin, capital-intensive business and it’s “not economically feasible” for providers to hand over that much revenue to an in-state gaming entity.
Maloney said his group doesn’t yet have an alternative proposal that it would like to see passed in Wisconsin.
“It’s not necessarily in the drafting process or in the making at this moment,” he said. “We have been very forthright in our communications with legislative leaders that we prefer a competitive, regulated framework that resembles a number of other state regulated frameworks throughout the country.”
The association’s testimony said two other states — Arkansas and Florida — require more than 50 percent of a sportsbook operator’s revenue to go to an in-state entity. The testimony stated the national brands represented by Sports Betting Alliance don’t operate in those states.
But FanDuel and DraftKings, both represented by the Sports Betting Alliance, have applied to partner with casinos in Arkansas to offer sports betting apps.
Maloney said the association’s members could hypothetically work with Wisconsin’s tribes, but they would prefer a proposal be ironed out “in the light of day” with recorded votes instead of voice votes. He said members didn’t feel they had the opportunity to engage in a proper dialog in the Badger state.
“We work through tribal compacts and with tribes in certain states, and we’re happy to build upon that record in the state of Wisconsin,” Maloney said. “We’re going to look to the Legislature for that leadership, and hope to see it here over the next several weeks and be a part of the process that can platform a compelling and competitive product.”
Members of the Ho-Chunk Nation testified in November in favor of the bill, framing online sports betting as a needed revenue stream for tribes.
“The Nation does well with our current casino gaming operations, and we are thankful for what we have. However, with 8000 tribal members, we are still woefully short on providing what is needed,” Edward Mullen, a member of the Ho-Chunk Nation Legislature, testified.
Kyle WhiteEagle, a legislator for the Ho-Chunk Nation, testified that the Ho-Chunk Nation faces “onerous problems” like opioid addiction, poverty and homelessness.
“Giving tribes in Wisconsin the right to conduct mobile sports betting isn’t going to solve these problems completely, but it will help significantly, and will be funding well spent,” he said.
Even so, nearly two-thirds of Wisconsin voters oppose legalizing online sports betting in the state. According to a new Marquette Law School poll, 64 percent of state voters oppose it, including 61 percent of Republicans and 66 percent of Democrats.
Tribes, gambling companies at odds over bill legalizing online sports betting in Wisconsin was originally published by Wisconsin Public Radio.
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