Lottery, horse racing to collaborate on 'fantasy sports'
Pub Date: 6/1/2008
By Paul F. Vang
Perhaps it s a bit of a bureaucratic stretch, but Montana Lottery, a division of the Department of Administration, is making steady progress in developing the mechanics for fantasy sports games, based on pari-mutuel betting principles, to benefit the Montana Board of Horse Racing, part of the Montana Department of Agriculture.
Fantasy gaming is part of a plan authorized by House Bill 616, passed the 2007 Legislature, to save horse racing in Montana by allowing the Board of Horse Racing to offer fantasy sports wagering.
The board currently gets its funding from race licensing fees, but because of the decline of Montana s horse racing industry, the board has been on the verge of financial collapse. Currently, horse racing takes place in just three Montana cities: Billings, Great Falls and Miles City.
The plan s beginnings, according to the on-line publication, The Racing Journal, go back to a meeting of the Montana Board of Horse Racing on October 18, 2006 in which members of the Board discussed options on how to increase the Board s revenues, and recommendations of Governor Schweitzer s Task Force on Horse Racing.
At that meeting, Task Force member John Tooke of Miles City envisioned revenue opportunities if legislation were passed permitting fantasy sports pari-mutuel betting, with horse racing getting a percentage of the revenues. Tooke pointed out that Fantasy Sports betting is not unlawful according to the internet Gambling Enforcement Act passed by Congress and signed into law by President Bush.
Promoters of fantasy gaming envision that by September, the beginning of the 2008 NFL season, Montanans can go to a local bar and place wagers on how groups or "fantasy teams" of leading NFL players might perform on their weekend games, and as fantasy games develop, follow that up with bets on, for example, fantasy teams of professional golfers or NASCAR racers.
Fantasy sports have been around for years. It s popular among many fans where participants organize an idealized team from the ranks of professional athletes in a certain sport. A player might team, for example, quarterback Eli Manning of the New York Giants with New England s offensive line and running backs from the Minnesota Vikings, scoring points based upon actual performance of the players in their individual actual games. At the end of the season, the fantasy teams are ranked on the season s performance.
Although fantasy leagues exist nationwide, Montana is one of just four states that allows betting on fantasy leagues, instead of the more traditional method of informal wagers among friends.
Montana s fantasy sports, according to a report by Jennifer McKee of the Helena Independent-Record, would be offered only at bars or taverns registered with Montana Lottery for fantasy gaming. Players would bet a set sum, pick their teams and register those rosters with the Lottery. Players would select quarterbacks, running backs, wide receivers, tight ends and kickers, plus an entire defensive line from one NFL team. Odds would be determined on pari-mutuel methods.
Pari-mutuel betting, according to Wikipedia, is a betting system in which all bets of a particular type are placed together in a pool in which taxes and a house take are first removed from the pool and payoff odds are calculated by sharing the pool among all placed bets.
The system is widely used in gambling on horse racing, greyhound racing, jai alai and other sporting events of relatively short duration in which participants finish in a ranked order. Pari-mutuel betting differs from fixed odds betting in that the final payout is not determined until the pool is closed.
Rather than a full season to determine winners, each week's cycle would stand by itself and winners would get payouts from the money wagered. Severty-four percent of the money wagered would be returned to the fantasy players. The remaining 26 percent would be split among the Board of Horse Racing, Montana Lottery, and the host bar or tavern that offered the game at its facility.
According to the Independent Record report, George Parisot, Director of the Montana Lottery, estimated that annual wagers on the new game could be around $3 million to $5 million.
C. A. "Al" Carruthers of Butte, Chairman of the Board of Horse Racing, cautioned that additional steps have to be completed before fantasy gaming goes live. First, based on the 2007 enabling legislation, a set of rules and regulations must be promulgated and put out for a 60-day public comment period. Secondly, a formal agreement must be made with Montana Lottery.
Still, Carruthers is optimistic that remaining legal requirements will be completed in a timely fashion and said, We hope to have it up and going by September. Carruthers envisions that most fantasy gaming will take place in sports bars licensed by both the Board of Horse Racing and Montana Lottery. Fantasy gaming will be based on professional sports, only. No university-level athletics are permitted in the fantasy sports concept.
We ve got our fingers crossed, Carruthers added, hoping that enough money will be generated by fantasy gaming to keep horse racing alive in Montana.
George Parisot, Director of Montana Lottery, was out of town and unavailable for comment at press time. Jo Berg, Public Affairs Officer for Montana Lottery, said that Things are moving along really well, though still in preliminary stages. We re still in the process of developing a Memorandum of Understanding with the Board of Horse Racing.
While the project may still be in its beginning changes, Montana Lottery is currently collaborating with their vendor of the last three years, intralotUSA, a Georgia-based company. Development is under way and intralotUSA is coming up with all sorts of tentative stuff.
Ms. Berg added, By mid-June, we hope to be able to make a formal announcement.
There are still unknowns such as how many Montanans will be attracted to wagering on fantasy sports, how many establishments will want the machines and personnel requirements, and thus how much money will actually be generated by these games for the benefit of Montana horse racing, so the collaboration between Montana Lottery and the Board of Horse Racing is an ongoing process.
If the current schedule holds up, by the time this fall s NFL season starts, people will have the option of forming fantasy football teams weekly and wagering on how their fantasy teams actually perform.
Source: The Montana Tavern Times, June, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.