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Expect more football than Fortnite as sports betting comes to Washington state tribal casinos

26th March, 14:10

Seattle sports fans may be able to place a legal bet on Russell Wilson's pass completion rate during the Seahawks home opener this fall, but not from their favorite Pioneer Square barstool. Instead, they will have to travel to one of the state's 29 tribal casinos.

All forms of sports -- including esports and excluding in-state collegiate athletics -- are eligible for bets under the law, but it will be up to the tribes to negotiate with the state over the coming months about which sports will actually be offered.

Industry insiders don't expect esports to be part of the initial offerings. So-called daily fantasy sports like DraftKings and FanDuel are prohibited. Casinos are likely to take a 5-10 percent cut of each winning bet.

Those are the terms of a bill approved by the Washington state legislature on March 10 and signed into law by Gov. Jay Inslee this week.

Legalization comes almost two years after the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act in May 2018, following a challenge by New Jersey to lift Nevada's monopoly on the practice.

Washington will join 14 other states with sports betting in operation. Six other states and Washington, D.C., have legalized sports betting but do not yet have operations up and running. In New Jersey, West Virginia, and Indiana, customers can download apps like BetMGM and use their mobile device to place bets anywhere in state borders -- at the bar, for example, or even on the beach.

Washington state, by contrast, will most closely resemble New Mexico, where select tribal casinos began offering sports betting in October 2018.

"The voters and legislature have spoken on that issue and nobody seems to have interest in New Jersey-style gambling in Washington state," said Rebecca George-Kaldor, executive director of the Washington Indian Gaming Association.

At tribal casinos, bettors can expect to have access to walk-up, point-of-sale retail purchase with a ticket writer, standalone kiosks for self-service betting, and geofenced mobile apps that will work as long as the user is on the premises.

"I wouldn't anticipate big Vegas-style sportsbooks," said Kevin Zenishek, executive director of casino operations at the Spokane-area Northern Quest Casino and Resort, describing facilities like the Moneyline Sports Bar & Book at the MGM Park in Las Vegas, which has darts, cornhole, and other sports bar trappings. "Most folks don't anticipate there is a large market out there for sports betting."

Rahul Sood, founder and CEO of Seattle esports betting start-up Unikrn, believes the physical restriction to tribal casinos will be a hurdle.

"The idea that you have to walk into a casino to go place a bet is not going to keep people from doing it the way they currently do it," he said, describing a thriving online marketplace of sportsbooks legal in their country of origin but illegal in the user's home jurisdiction.

Off-premises sports betting in Washington is a felony. For example, law enforcement broke up a Spokane-area NASCAR gambling ring in 2010.

Former Washington State Gambling Commissioner Chris Stearns anticipates that Washington will eventually relax its rules. "With the rise of daily fantasy sports, sports betting has been normalized," he told GeekWire. "But if mobile betting does go off-reservation, I believe it will be tribally operated."

Between Las Vegas and overseas legal operations, sports betting is a mature industry with deeply entrenched existing providers of sportsbooks, betting hardware, account management systems and enterprise software. The industry is dominated by companies like Roar/GFC, ISI, IGT, Scientific Games, US Bet, and Rush Street Gaming. UK-based William Hill has been in business since 1934.

Where does that leave Washington tech companies seeking an opportunity in this new marketplace? "There is definitely a possibility, but it's pretty late in the game," Zenishek said.

"There's certainly room for startups," Sood said. "They have to figure out not to compete but help operators improve their offering."

Unikrn already offers an esports betting platform with an international gambling license from the Isle of Man. The company believes the opportunity to bet on yourself playing Fortnite, place live bets on a League of Legends match, or breed digital horses to bet on races are all opportunities that legacy sportsbook operations have not yet figured out.

"They're dealing with a much older, more mature audience," Sood said. "We are bringing sports betting to a much younger audience."

Zenishek concurs, noting that the typical sports gambler is a 50+ year old white male. He says the growth in esports competition leaves him optimistic that esports betting will enter the state's sports betting marketplace down the road.

Some opponents continue to fight legalization. Nevada-based Maverick Gaming bought 19 card rooms in Washington in the last two years, expecting the legislature to approve sports betting at those non-tribal facilities, which include locations inside the Seattle city limits. Maverick CEO Eric Persson, a member of the Shoalwater Bay tribe in Pacific County, Wash., told the Seattle Times in February that his company will spend upwards of $30 million to fight the new law.

"Maverick Gaming supports an inclusive system for sports betting, which is why we opposed the legislation recently passed by the State Senate and House to create a tax-free monopoly for sports betting at Tribal casinos," a Maverick spokesperson told GeekWire via e-mail. "We are opposed to the inclusion of mobile in a legal sports betting system in Washington after listening to lawmakers and the public."

The timing of the launch now hinges on the negotiations between the tribes and the state. Prior to the COVID-19 pandemic, backers of the legislation were hoping to have systems up and running in time for the start of next year's NFL season.