Washington Sports Betting Bill Boosts Tribes, Excludes Others

Washington sports betting will soon be legal, but it will be with one of the most limited reaches of any of the two-dozen states already accepting wagers or set to do so.

Most if not all of the state’s 29 Native American casinos will be able to take in-person and online bets within their properties, but the state’s card rooms, lottery, race tracks and other gaming interests are no closer to taking a legal bet.

Critically, the bill will not permit statewide mobile betting, which is already available in more than a dozen states, including neighboring Oregon. Mobile betting makes up more than 80% of handle in mature markets such as Pennsylvania and New Jersey, meaning Washington is dramatically handicapping its revenue potential before betting begins.

Gov. Jay Inslee hasn’t signed the bill into law yet, but it will pass even without a signature in the coming days. Should he issue a full or line-item veto, the bill should survive as it passed with more than the two-thirds supermajority required to override that action. Legislators should have more than enough votes to override the veto.

The legislature has adjourned for 2020, and the state’s response to the coronavirus outbreak is a far greater priority than sports betting. Though government functions will be delayed, or possibly halted, by responses to the virus, regulators will soon be able to write rules for the tribes to take bets, possibly as early as this year, assuming sports leagues are able to restart their seasons.

The bill contained an emergency clause which allowed it to take effect immediately, but that moved Maverick Gaming, operator of about half the state’s cardrooms, to threaten a lawsuit that could jeopardize the rollout or even future of Washington sports betting legislation.

Even with possible legal action, the legislation is undoubtedly a win for the tribes. It helps Washington, with some of the nation’s most punitive gambling laws, recoup some of the billions wagered illegally on sports each year. But the limits mean legal sports betting in Washington will be an afterthought in the national market.

Legal Betting for Native American Casinos

Conflicts between would-be sports betting operators, typically state lotteries, commercial casinos, horse tracks and tribal gaming interests, have thwarted legalization measures in statehouses nationwide as lawmakers struggle to appease certain groups without alienating others. In Washington, elected officials had a clear favorite.

The tribes will receive exclusive access to legal sports betting. It permits every Native American casino with more than 20 years of operations and in good standing with the state to open retail sportsbooks as well as online sportsbooks, as long as bets are conducted within the casino property.

Sports betting at the tribal casinos won’t be taxed. Washington is the only state government that doesn’t collect taxes from Native American gaming revenues.

Supporters in the legislature, as well as the tribes themselves, argued this was the most prudent way to introduce legal sports betting in Washington. The narrower expansion, proponents argued, was the only palpable option for Evergreen State residents, many of whom oppose larger gambling expansion. That aversion was also used to justify the emergency clause resolution that precluded a public vote, which requires 60% support to come into law.

Other Washington Gaming Entities

These allocations for the tribes have angered the nearly 40 cardrooms in the state, which had pushed for a separate bill that would also permit them sports betting options. The bill died early in the 2020 legislative session, but the cardrooms, led by Maverick Gaming, are threatening to challenge the legislation in court. The cardrooms believe the emergency clause, which prohibits a statewide voter referendum to approve tribal sports betting, was unnecessary.

The Seattle Times reports Maverick obtained a legal opinion from a former state Supreme Court justice that argued the sports betting bill didn’t constitute a threat to public health or safety. However, a former attorney general contended the bill was an emergency as a means to combat the illegal sports betting market.

Assuming the bill stands as is, this also means the Washington Lottery, the state’s most lucrative commercial gaming entity, will have no role in legal wagering. Oregon, as well as Rhode Island, West Virginia and New Hampshire, run their sports betting operations through their respective state-run lotteries.

The bill also excludes the state’s commercial horse tracks. The Muckleshoot Tribe, which owns the Evergreen Downs horsetrack in Auburn, had sought sports betting options at its track but is still positioned to have sports betting at its casino. The casino, also in Auburn, is the largest casino by square footage in the Pacific Northwest. It is about 30 miles from Seattle and 15 from Tacoma, parts of the state’s most populated metropolitan area.

Additional Washington Sports Betting Details

Assuming it passes into law, the Washington sports betting bill will be the first that doesn’t impose any taxes on gaming winnings. It will be the third state that exclusively permits wagering within Native American casinos, after North Carolina and New Mexico.

Washington sports bettors will be able to wager on professional sporting events, excluding minor league sports, as well as collegiate and Olympic events. It is also one of the first states to explicitly permit esports betting.

Further details will need to be resolved by the Washington Gambling Commission, which is tasked by the bill with sports betting oversight. The Commission will also have to amend compacts with the tribes to permit sports betting, but this seems like a formality.

The coronavirus outbreak has already altered day-to-day government actions, and it seems promulgation and implementation of sports betting rules could be as well. In favorable conditions in other states, this process has taken an average of three-to-nine months. The threat of legal action from the cardrooms, and the possibility of a public vote or even the need for a new bill, could linger over the prospects of legal sports betting for years, though gaming officials would also likely be able to advance rules even with a lawsuit pending.

A best-case scenario could see wagering begin at tribal casinos by the end of 2020, but conditions are hardly conducive for that to happen. Washington sports betting is probably a safer bet to begin in 2021. Even then, the in-casino restrictions could make wagering a comparative footnote in U.S. sports betting until when, or if, the legislature allows the tribes, cardrooms or other interests statewide mobile betting.