Fantasy pari mutuel wagering plateaus at $6,000
Pub Date: 11/1/2008
By Paul F. Vang
After six weeks of play, Montana Sports Action, the pari-mutuel sports betting game operated by Montana Lottery for the benefit of the Montana Board of Horse Racing, seems to be stuck in a relatively low plateau. (Refer to spreadsheet chart below.)
Week 3 saw the highest number of bets placed when the total betting pool hit $6,800, with the first place winner picking up a prize of $2,516. Since then, the total betting pool has hovered at around $6,000 per week.
The winners of the first, second and third place prizes in the weekly game pick up 74 percent of the weekly betting pool, with the remaining 26 percent the "take-out" split among Montana Lottery (23 percent of the take-out), betting facilities (16 percent of the take-out), and the Board of Horse Racing (61 percent of the take-out).
Jo Berg, Communications Director for Montana Lottery, concedes that the game quickly leveled off but remains optimistic about the game s future.
We had only two and a half months to put it all together, so I think we re doing pretty well. We have potential for a lot more retailers, and we feel interest is growing every week. We re optimistic that as we add more retailers we ll continue to grow.
She adds that they re still going ahead with plans to develop a new game based on auto racing to take over after the professional football season finally comes to an end in February 2009.
When the Montana Tavern Times pointed out that Lottery s share of the game s proceeds are averaging under $400 per week, Berg seemed a bit surprised at the figure, though confirmed that the figures were on target.
While there are considerable costs involved with developing the game and placing the terminals in retail outlets around the state publicly estimated in September at $500,000 Berg said those costs were underwritten by the game s developer and Lottery vendor, intralotUSA.
Quite a risk at current rates of return? Yes, says Berg, and that s why they re helping us with promoting the game.
From his home in Butte, C. A. (Al) Carruthers, Chairman of the Board of Horse Racing, said that Montana Lottery has not kept him regularly informed on the progress of the fantasy games.
I really don t know much more than I did before the games started, he said. He went on to say, They (Lottery) predicted that total game revenues (for the Board of Horse Racing) should reach about $500,000 in the first year.
At $6,000 per week, at current rates, the game revenues or total handle would be just under $96,000 through the duration of the NFL season. The Board of Horse Racing's share would be about $15,000, the Lottery would get about $5,700 and locations where the game is offered would receive about $4,000 or $27 each, based on the current 150 licensed locations.
The 2007 Legislature passed House Bill 616 which authorized fantasy sports pari-mutuel wagering. Since the game's inception, the sponsor of the bill, Bill McChesney, (D-Miles City), has questioned whether the resulting game product and the Lottery's administration of it comply with the original intent of his legislation.
In addition, the Economic Affairs interim Committee of the Legislature has also asked the Legislative Audit Bureau to determine if the game fulfills legislative intent and whether its implementation is compliant under the Montana Administrative Procedures Act which governs the processes involved in implementing legislation and formulating the corresponding administrative rules.
And it has been confirmed by Ryan Sherman, Board of Horse Racing executive director, that the Board has been sued for infringement by a California resident who claims to have patented the game concept.
Source: The Montana Tavern Times, November, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.