Competing sportsbook bills have been filed in Washington State, but the legislature’s relatively short 60-day session means that chances are narrowing that any of them will be adopted this year.
Because the state has a two-year budget and this is an off-year, any bill would have to be voted out of committee by the first week in February to have a chance for approval in 2020. Moreover, the state constitution requires a 60 percent super-majority in both chambers to expand gaming in any form.
Lawmakers who want to beat those odds have been fast on their feet, trying to beat the deadline. Two sports betting bills were recently filed. Both exclude college sports and include sports wagering on Indian reservations.
HB 2478, whose sponsor is Rep. Brandon Vick, provides for online mobile sportsbooks, and sports wager at card rooms, racetracks and tribal casinos. It would tax gross gaming revenue at 10 percent for card clubs and racetracks, with a $500,000 application fee. That tax wouldn’t apply to sports bets made at tribal casinos, or using mobile apps on tribal casinos. However, if a bet is made using a tribal app but off Indian lands, it would be taxed at 10 percent.
In an exclusive interview, Vick told GGB News, “We saw a bill last year that was tribal only. For me, I’m concerned that we haven’t had the full conversation, the full debate. We didn’t have an argument about why we shouldn’t have it.
“It’s a big step, especially in Washington, which has tight restrictions,” he added. “We need to have the debate about the proper venue and who would be interested. I think the other question is, if we’re going to have sports betting, are we meeting the customers where they want to be? Do they want to go tribal casinos? Do we want to look at the market?”
Vick said he’s less interested in bringing in more government revenue than in opening up an activity to state residents that many clearly crave, while generating new economic activity. “I’m not a guy who advocates more government revenue,” he told GGB. “I think we should do it by expanding economic opportunity.”
For him, he added, it’s “both a rights issue and a revenue issue. My priority would be on the rights side of it. There’s obviously people who want to sports-bet. I live on the border with Oregon, and know of friends who cross that bridge, place their bets and come home. If revenue is a side benefit, that’s fine too. It’s here, so let’s make the best system possible.”
Vick predicts a hectic legislative session. “It is a 60-day session. The committee is going to be very lively. I would take the ‘under’ on whether it’s going to come out this year. But the Speaker, Rep. Laurie Jinkins, and a lot of folks should have some input.”
He reiterated that a supermajority of 60 percent of both houses is required to pass any bill that expands gaming in Washington beyond card rooms. “I really, truly think that if we are going to do this—and it’s a high bar—we need a robust debate.”
Vick has served on the House Committee on Commerce and Gaming for eight years. The committee is in charge of what he calls “the vices”: gaming, alcohol and marijuana, and policies that address all three.
The House legislation is Vick’s first attempt at a sports betting bill, though “early on, I dabbled in online poker bill,” he said. He is expecting calls from representatives of the National Football League, Major League Baseball and other sports leagues to lobby for so-called “integrity fees” or royalties. “It hasn’t been part of the debate yet. The one oddity is that we have already excluded betting on in state institutions, to eliminate the potential conflict that might come of that.”
The man who stands to benefit the most if Vick’s bill passes is Eric Persson, chief executive officer of Maverick Gaming, the new and rambunctious entry into the gaming arena. Maverick recently acquired the lion’s share of the medium-sized card room casinos that dot the Washington landscape, and is adding others. It has 19 casinos and expects to have 25 total by March. Most are “neighborhood” card rooms averaging 25,000 square feet.
Persson prefers Vick’s bill for the simple reason that he basically wrote it. He notes that it “limits each operator to one skin and one license and has a $,500,000 fee to apply. Most important,” he said, “It has a 10 percent tax, which according to the American Gaming Association should generate $5 million for the state each year.”
He wrote the bill and found sponsors in the House and Senate to carry it. “We do extensive lobbying at the state capitol,” he said. “Really in June is when I started talking to them. It’s a short session and an election year and we think the most likely path is that it will pass in the next session.”
Governor Jay Inslee is running for reelection, said Persson, “and there are a record number of bills submitted to the House this session. I don’t think either the Native American bill or mine will pass this session.
“The purpose of this bill was to start the dialogue and help the public understand the number of benefits, and probably create a platform where the Native Americans and myself could work together to benefit everyone, Washingtonians included,” he added.
It wasn’t difficult to get a sponsor, Persson said. “We’re the largest cardroom holder in the state. Anytime you employ over 2,000 people and the average salary is over $75,000, you get their attention. When we close all our transactions, we’ll be one of the Top 20 employees in the state.”
By March, with 25 properties, he expects to employ more than 3,000 people.
Sports betting will help those enterprises by bringing in more customers, not necessarily because of the money the casinos will take in directly by processing the books. In Washington, the medium-sized casinos are hyper-local in their focus.
“In our casinos, 18 percent comes from food and beverage,” said Persson. “Ninety percent of play comes from within three miles. Sports betting is one more reason to come to the bar and watch and bet on your teams.”
Yet he also supports mobile sports betting. “One thing we’ve learned from focus groups is that there is a lot of concern about the illegal market. If you don’t legalize mobile wagering people, will bet offshore. If offshore doesn’t pay off when you win, you can’t go to the attorney general.”
Focus groups also revealed that Washingtonians are surprised to learn that when they play fantasy sports they are committing a crime, said Persson. “This bill cleans that up as well.”
As far as requests from the NFL, the PGA Tour and other sports organizations, Persson dismisses them as “a profit grab. The truth is no one is more incentivized to make sure that the NFL is providing a clean product than the NFL. Pro sports work closely with the FBI and sportsbooks to make sure their products are not being tampered with. It’s a profit grab.”
He noted that in Washington, as far as sports betting is concerned, bills submitted by tribes have only been for land-based sportsbooks. “One of the main reasons is that ecommerce purchases, if you make a wager, even on reservation, it’s taxed. They didn’t support it knowing all of the illegal betting, they don’t want to be subject to taxation. That’s why our bill will be successful. It will address an issue that Washingtonians want addressed, and that’s why I think we’ll be working with Native Americans to provide a service that will benefit all Washingtonians.”
Also of interest to Persson is that Maverick will likely provide its own sports betting operations in all the states where it offers the activity, rather than partnering with a company like FanDuel. “With the purchases we’re looking at,” he said, “we’ll be in Nevada, Washington, Colorado, Mississippi and Louisiana.”
He’s hired Bert Osborne—who ran sportsbooks in Las Vegas for more than 30 years—to run the system. “I think it makes us the most amount of profit. We don’t need a party to manage a portion of gaming that we think we have expertise in,” Persson said. “This will move the profit margin up by 50 percent. We think sports betting will be a great opportunity for our company.”
Maverick recently acquired the Eldorado Shreveport, a large property in Louisiana, from Eldorado Resorts for $230 million. That brings its total number of properties to 27. “We think we will have 35 by June,” said Persson. “Most likely we will be purchasing more in the Louisiana market.”
Another bill has been introduced in the legislature: HB 2368, which would allow tribal sports betting with onsite mobile platforms. There are currently 30 tribal casinos in the state. Many details are not addressed in the bill, such as licensing and taxation, but it would give professional sports leagues and the NCAA a role in rule-making.
The Gambling Commission would probably be in charge of sports betting. Last year, it held a “stakeholder” meeting that included Major League Baseball, which once again argued for a “data mandate” and royalties.
Last October, Washington’s neighbor, Oregon, launched mobile sports betting under the umbrella of the state lottery. No casinos take part.
