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States without sports betting 'leaving money on the table' | Grand Forks Herald

11th August, 11:43

Joe Schneider considers the establishment he co-owns a sports bar.

Joe Blacks in downtown Grand Forks has a 155-inch projector screen, televisions from wall to wall and a horn that blares every time the UND hockey team scores.

When UND played in the 2016 NCAA hockey national championship game, the spacious Joe Blacks had a line out the door at 1 p.m., even though the game wasn't scheduled to start until six hours later.

Now, imagine walking into Joe Blacks and placing a sports bet to add fuel to that atmosphere.

State Sen. Scott Meyer, R-Grand Forks, can see it.

"Think about March Madness," Meyer said. "How fun that would be. We could all go down to a local pub in Grand Forks with your friends ... and it's a little more fun."

Schneider shares that vision, too.

"For us, we'd be definitely interested in it," he said. "We already have gambling anyway, whether it's pull tabs or video machines or pigwheel. If it's a Monday Night Football game and you want to make the game more exciting, why not? There's already (betting on) horse racing, so what's the difference?"

For now, this dream is only hypothetical after a pair of gambling-related bills sputtered out during the last North Dakota legislative session.

The path to legalized sports betting in North Dakota is muddy - despite 10 states already featuring full-scale legal sports betting. Iowa will become No. 11 on Aug. 15.

States with full-scale sports betting already in place are New York, New Jersey, Pennsylvania, Rhode Island, Delaware, West Virginia, Mississippi, Arkansas, New Mexico and Nevada. Six other states (Montana, Indiana, Tennessee, Illinois, New Hampshire and Oregon) have approved legislation but aren't yet operational.

In Minnesota, recent legislative efforts to legalize sports betting were unsuccessful, due, in part, to pushback from tribal gaming. Unlike North Dakota, Minnesota doesn't conduct gaming through charities.

In South Dakota, a group of lawmakers pushed for a ballot measure to make sports betting legalized in Deadwood and at tribal casinos. The Legislature voted down that movement, leaving gambling supporters needing to round up the necessary signatures to bring issue to a statewide vote.

The genesis for widespread legalized sports betting came in 2018 when a U.S. Supreme Court ruling cleared the way for states beyond Nevada to provide bookmaking and betting at casinos and racetracks.

The court ruled that the Professional and Amateur Sports Protection Act violated the 10th Amendment of the U.S. Constitution because it illegally empowered the federal government to order certain states to take specific actions to disallow sports gambling.

That ruling means North Dakotans will be grappling with this issue for the foreseeable future.

Supporters of sports betting in North Dakota want to capitalize on a revenue source from an activity they say is already happening and a pastime that is not as taboo as in previous generations. Opponents are wary of expanding gambling in the state for those who might misuse gambling, whether that's becoming addicted or trying to influence the outcome of an in-state college event.

At present, the North Dakota Constitution bans gambling except for charitable gaming and the multi-state lottery. State law includes prohibitions on sports gambling, but it does allow betting on horse racing.

One wildcard way for a fast-tracking of legal sports betting in North Dakota is through tribal gaming.

North Dakota tribes already may have the authority to operate sports gambling operations, according to a 2019 Legislative Council memo outlining staffers' preliminary analysis of the high court ruling.

Compacts reached with each of the five tribes in 2013 allow for "sports book except as prohibited by the Professional and Amateur Sports Protection Act." The PASPA is the federal law that banned betting on sports, and which the court ruled unconstitutional in 2018.

North Dakota's tribal gaming sites include: Hankinson (Sisseton-Wahpeton Oyate), St. Michael (Spirit Lake), Fort Yates (Standing Rock Sioux), New Town (Three Affiliated Tribes), Trenton (Turtle Mountain) and Belcourt (Turtle Mountain).

In June of 2018, Gov. Doug Burgum spokesman Mike Nowatzki said Burgum had preliminary discussions with tribal representatives "and is open to looking at ways to potentially capitalize on changes in national sports betting legislation to mutually benefit the state and the tribes."

However, when reached by the Herald earlier this month for an update, Nowatzki said no meetings have taken place to his knowledge and that buzz of tribal gaming entering into sports betting has fizzled after the defeat of sports betting bills during the legislative session.

Outside of tribal gaming, North Dakota's first attempt to change the sports betting ban came during the 2019 legislative session with a pair of bills - one would have made it legal to bet on professional and collegiate sports; the other would have legalized betting on pro sports only.

Lawmakers who support sports betting legislation like the state revenue potential.

"One, North Dakotans are already doing it online," Meyer said. "That money is leaving our state. People who suffer for that is our charities. They could take advantage and bring in more revenue, and the state would get some of that tax.

"Let's not pretend it's not happening," Meyer said. "On ESPN right now, the bottom ticker has betting lines. KFAN Power Trip, I listen to on the radio, they're talking the over-under. It's now so mainstream. It doesn't have that stigma anymore, and I never thought it should have it in the first place. We're leaving money on the table we could use to fund other things."

Under-the-table NFL and college football wagers top $95 billion each year, according to ESPN. Overall, up to $150 billion is wagered illegally on sports every year in the United States, according to the American Gaming Association, a trade group.

According to the Des Moines Register, the latest state to legalize gambling, Iowa, can anticipate sports wagering to account for $29.1 million to $58.3 million in annual revenue, of which the state could collect an estimated $1.97 million to $3.93 million in taxes (based on Iowa's 6.75% tax rate). Iowa has about 2.4 million more people than North Dakota and about 2.5 million fewer than Minnesota.

Beyond state revenue and tax dollars, bar owners would love to see legalized sports gambling translate to a jump in customers.

"I look forward to it," said Bill Tyrell, co-owner of Rumors Bar & Grill in Grand Forks. "If that day were to come, I would think you would see an increase in people making bets early Saturday and Sunday to get them in for football games."

Rumors is the only bar in Grand Forks where patrons can bet on live horse racing and one of fewer than 10 across the state. That operation is run by the charity Development Homes, Inc.

Rumors' biggest business day of the year is the Kentucky Derby. If sports betting would be legalized, Tyrell wouldn't mind seeing some of that success carry over to other sporting events.

"I think it would increase our revenue and increase the amount of people coming through and seeing what we have in our bar," Tyrell said.

North Dakota House Bill 1254, sponsored by Bismarck Republican Rep. Jason Dockter, was written to allow betting on pro and college sports and held early promise of passage.

Yet it met plenty of detractors.

Mark Hagerott, the chancellor of the North Dakota University System, came out in opposition of the bill after consulting with campus presidents late in the legislative session. He predicted the bill, if passed, would put added pressure on student athletes.

The House passed 1254 in a 52-38 vote, but it didn't fare as well in the Senate. Without a debate on the floor, it was defeated 38-7.

The other bill - which would have allowed betting on professional sports only - was defeated by a wide margin.

"It was going to be an uphill battle regardless in the Senate, but (Hagerott's opposition) was the guillotine," said bill co-sponsor Rep. Michael Howe, R-West Fargo. "I thought it was a little surprising for a higher ed chancellor to stick his neck out into this. North Dakota State (University) benefits from Teammakers, which runs charitable gaming in Fargo, so I thought it was a little puzzling."

When reached in late July by the Herald, Hagerott said his stance hasn't changed. One of Hagerott's concerns is the immediacy of mobile sports betting through a cell phone and how that could fuel an addiction.

"Everyone is carrying a potential casino in your pocket," Hagerott said. "Before, you had to make an effort to get in the car, go down to the reservation to gamble and come back. It put a barrier between you and the negative aspects of gambling. ... You had to get on a plane and fly to Las Vegas. We no longer have that physical separation."

Meyer feels the sports betting bills in North Dakota have addressed that worry over addiction.

"We had language in that bill that took some of the tax to fund addiction services," Meyer said. "I look at that as proactive."

Hagerott said he understands the pressure to monetize college sports, but he's happy to be cautious.

"The prudent approach is to wait for this to develop in other states and see how it plays out," he said. "Our culture in North Dakota is pro-family. It seems something we would not want to be the first in the nation to be doing this stuff."

There was another concern: On which college sports would North Dakotans make bets? Betting lines wouldn't likely be available for the majority of universities in the system.

"It's going to be UND and NDSU football and basketball," Howe said. "I don't know if books offer college hockey lines, but I'm sure you could find that somewhere, too."

With both sports betting bills failing in 2019, the path ahead for legalization in North Dakota could be a long one. The issue is likely to arise again in 2021, the first opportunity for the Legislature to act in North Dakota's every-other-year legislative format.

One quicker path would be through a ballot measure, although it would require more than 25,000 signatures to put the issue to a statewide vote. Howe says that's a longshot; he believes the best option might be charities organizing together in a grassroots effort.

Joe Vesel, a board member for the Charitable Gaming Association of North Dakota, came out in support of sports betting during the legislative session, saying it would provide a new revenue source.

Even if a ballot measure isn't achieved, that group still should lobby lawmakers, Howe said.

"If there's no backing, it's going to be a heavy lift for 2021 just to have myself and a few legislators try to lobby the others who voted no (in 2019)," Howe said.

Although the pro-gambling bills failed in 2019, Legislative Management - a 17-member research committee - prioritized a study in 2020 to take a closer look at the issue.

The study will provide an "evaluation of whether charitable gaming is being expanded properly" and "whether the addition of new games, such as sports betting and historic horse racing, is appropriate," according to state documents.

Despite the uncertain future in North Dakota, new movements in legalization in Iowa are giving North Dakota proponents reason to believe sports gambling in North Dakota can happen sooner than later.

"Now that we've been done with session since April, you're seeing Iowa pass it," Howe said. "It gives me a little more hope for next (session)."