Wisconsin Closes in on Approving Sports Betting Legislation

With the state's Indian Tribes in control of most forms of recreational gambling, it has been difficult to get sports betting legislation passed in Wisconsin. It's also been nearly impossible to get online casino gambling on the books.

While online casino gambling is likely a nonstarter, there has been some movement on the sports betting front. The Senate has announced that Senate Bill 592 has made it out of conference by a vote of 5-3. As the bill currently stands, the state's tribal community would be exclusively permitted to offer mobile sports betting. Note: Retail sports betting is not mentioned in the bill.

This is just the first step in the approval process. The next step will be to present to the full Senate. If the Senate gives a thumbs-up, the tribal community will still have to agree to adjust its gaming compact with the state. Assuming that happens, the bill would then proceed to the Governor's desk for final approval.

Issues Standing in the Way

As these things go, there is seldom a clear path to the passing of the legislation. Indeed, some issues need to be resolved before all interested parties can end up on the same page.

The biggest rift is between tribal leaders and the nation's top online sports betting operator. The rift is being caused by a clause that calls for Indian Tribe owners to get at least 60% of the revenue, with the other 40% going to the operators. The operators are not pleased with this development. They are used to settling in at about 80% of the revenue, with the rest going to the states. The Tribes have reacted to operator objections, claiming greed is involved.

On behalf of the operators, management from top operators like bet365, DraftKings, and FanDuel have insinuated that they might just stay on the sidelines if something more amicable can't be arranged. In a statement during committee testimony, industry lobbyist Damon Stewart said,

“Online sports betting is a low-margin, capital-intensive business. It is simply not economically feasible for a commercial operator to hand over 60% to the in-state entity just for the right to operate in the state. That is why Wisconsin adults would not be able to use the national brands they see advertised on national TV every day.”

The Tribal community feels insulted by the notion that they are incapable of running proprietary sports betting operations. Tis is the same battle that has made it nearly impossible to get online sports betting approved in California. It's worth noting that some tribes are already offering some form of sports betting on their lands.

Indian leadership is prideful and not taking kindly to any insinuation that they can't manage sports betting operations. According to Dominic Ortiz, CEO of Potawatomi Casinos and Hotels:

"And I'm not the only one who was offended. Any Wisconsin tribe that heard that testimony is absolutely more than offended."

It remains to be seen if Senate leadership can find enough common ground to get this legislation passed.