Wisconsin Senate Committee Approves Online Sports Betting Bill

• The Wisconsin Senate Committee on Agriculture and Revenue moved an online sports betting bill forward
• Members of the committee voted 5-3 in favor of Sen. Howard L. Marklein’s bill (R-17), SB 592
• The proposed bill will legalize online sports betting for tribes as long as bets are processed through a server on tribal land

A Wisconsin Senate Committee moved a bill forward this week to legalize online sports betting for state tribes, despite objections from some of the nation’s largest sports betting companies.

The Wisconsin Senate Committee on Agriculture and Revenue approved Sen. Howard L. Marklein’s bill (R-17), SB 592, by a 5-3 vote in an executive session meeting. The closed-doors meeting was held on Thursday, Nov. 6, two days after the committee held a public hearing on the bill.

Marklein’s bill will allow Tribes to be able to offer Wisconsin online sports betting as long as a bet is processed by a server or other device that is physically located on a federally recognized American Indian Tribe’s land.

Sports Betting Alliance Objects to Bill

The committee approved the bill through paper ballot by a 5-3 vote. If ultimately approved by the Wisconsin Senate and Assembly, SB 592 will allow tribes to renegotiate their gaming compacts – which also must be approved by the federal government – to offer online sports betting through their own platforms or through partnerships with sports betting companies.

A representative for Marklein recently confirmed nothing in the legislation prohibits a state tribe from partnering with a company such as DraftKings or FanDuel. To do so, a tribe will be required to renegotiate its gaming compact with Wisconsin and receive approval from the Federal Bureau of Indian Affairs.

However, while all parties involved hope to legalize online sports betting for Wisconsin tribes, the framework of the bill is disagreed upon by many.

During a public hearing for the bill earlier this week, the Sports Betting Alliance, which represents the interests of some of the largest sports betting companies in the country, criticized the bill as not being an economically feasible way for operators to enter the state.

According to Damon Stewart, counsel for the Sports Betting Alliance, if Wisconsin legalizes online sports betting through the Indian Gaming Regulatory Act (IGRA) and the proposed hub-and-spoke model, it will require all tethered online sports betting operators to provide at least 60% of revenues to their tribal partners. This would be economically unfeasible for operators in the low-margin business of online sports betting.

The Sports Betting Alliance represents the interests of bet365, BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel.

Putting aside the “dubious legal underpinnings” of the bill’s approach to legalization – which Stewart said likely violates the Wisconsin constitution – it will not afford operators to do business in the state due to the low-margin nature of online sports betting.

All parties want this, Stewart said, but the bill feels rushed and will not allow for a competitive sports betting market in the Badger State.

“We recognize the tribes primary role in all of this. We want to tether with them, which gives them a leadership role. We want to find a way to work with them, combined with a way to make this appropriately done for everybody,” he said.

Tribes Object to Criticism

Jeff Crawford, attorney general for the Forest County Potawatomi Tribe, said the tribe supports the Sports Betting Alliance’s goal of legalization and is willing to have discussions with them regarding how a solution can be reached. However, they have not reached out for any discussions as of yet, he reported.

One point of contention, Crawford said, is the alliance’s assumption that tribes will not be able to successfully offer online sports betting platforms across the state on their own.

“It’s definitely something that they are implying we don’t have the capability of operating statewide mobile sports betting. If you’ve been to our facility, you’d see we do a good job and our customers are happy. We look forward to doing that on a regulated basis statewide.”