Pari-mutuel fantasy leagues not that complex
Pub Date: 12/1/2007
Miles City's John Tooke is a thinker, that's for sure.
Tooke is a Certified Public Accountant, owner of the Golden Spur, past president of the Gaming Industry Association, long-time member of the Montana Tavern Association, member of the Gaming Advisory Council and ex-member of the Governor's Task Force on Horse Racing.
So it shouldn't surprise licensed business owners, government officials or the public, that he was the one who was giving thought to the possible interplay between fantasy sports leagues, horse racing and simulcast wagering in Montana, then hit on an idea that could in his mind improve all of them.
He reasoned that the three activities could be married to ultimately enhance all three and maybe virtually save horse racing outright.
So he helped craft HB616 which was passed by the 2007 Legislature and signed by the Governor.
We have heard Tooke's spiel on the subject three times and read the enabling statute at least twice, and we are finally starting to get a handle on what this is about and what its potential might be.
It's really not that complex, unless you ask Tooke. His CPA brain naturally works in terms of minutiae. He's one of those guys who counts every tree before he'll tell you it's a certifiable forest. In fact, it has been said of the man that if you ask him the time of day, he'll first tell you how a clock works.
But he's a born optimist, a quality that perhaps we should all admire. So when he starts extrapolating possible--not necessarily probable--scenarios, temper them with a dose of objectivity.
At a recent MTA Board of Directors meeting, it was apparent there was a lack of clear information on the concept and some downright confusion. We have been told there is confusion and concern in other quarters as well, including the government sphere.
That is one reason we paid a great deal of attention and wrote extensively in this issue about a presentation Tooke made to the Gaming Industry Association board in early November. We hope this page-13 report clarifies the proposition and realistically assesses its potential and risks.
Fantasy sports leagues and simulcast horse race wagering have been legal in Montana for 15 years. Live pari-mutuel horse race wagering goes back decades. To say the least, horse racing, whether live or simulcast, is not flourishing. Tooke's idea is an attempt to address the inherent weaknesses of those two by marrying them to the popularity of fantasy sports.
Simply put, it allows fans of fantasy sports leagues to create and wager on fantasy sports teams on a weekly cycle, as opposed to just once per season.
The pari-mutuel fantasy sports leagues authorized under HB616 would utilize principles, technology and equipment similar to those already used in simulcast. And the bulk of the profits, if any, are designated to flow to the Board of Horse Racing to help fund purses and cover other expenses associated with that now dying pastime.
In addition, Tooke believes the concept could help develop a new customer base for taverns that now face the uncertainty of an all-out smoking ban in less than two years. Finally, his vision now calls for a portion of the proceeds to flow to programs for problem gambler treatment administered by the Montana Council on Problem Gambling.
So, it could be a win/win/win, if...
And there are many, many "ifs."
First, it must be demonstrated with a sound business plan that the concept has any financial viability at all.
To make it work, a hardware and software "system provider" will need to believe the major investment required could be paid back. It would require ground-up development of operating software plus pricey video terminals in every location licensed for gambling which determined pari-mutuel sports league wagering could work in their establishment.
As an aside, there would be nothing exclusive about the system in terms of which licensed locations could offer it, other than bare-bones economic practicality.
Second, the system would need an extensive network of installers who could also teach location operators how the system works.
Finally, it would take dedicated location licensees who would continuously work with customers to help them understand the fundamentals and, yes, the opportunity for some fun.
From our vantage point, the pari-mutuel fantasy sports league concept has some potential. But it looks like the investment and development curve is a long and steep one with very substantial venture risks associated with it that will have to be born by enterprising businesses with sufficient capital resources.
If private enterprise wants to roll the dice with the idea, we say they should have that opportunity and we would wish them well.We would also urge readers to read this month's report on Tooke's presentation to GIA.
We believe it may alleviate some of the angst that has recently been evident.
Source: The Montana Tavern Times, December, 2007, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.