Sports Betting Alliance Does Not Support Wisconsin Online Sports Betting Bill

• The Sports Betting Alliance, which represents several of the largest sports betting companies in the U.S., is not in support of a Wisconsin online sports betting bill
• A Sports Betting Alliance representative said this is not an economically viable piece of legislation for a robust sports betting market
• While the alliance does support legalized Wisconsin online sports betting, it does not support the bill as it is written

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Some of the largest sports betting companies in the country are not in favor of a recently introduced bill to legalize Wisconsin online sports betting.

A spokesperson for the Sports Betting Alliance, which represents the interests of bet365, BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, reported that Sen. Howard L. Marklein’s bill (R-17), SB 592, to legalize Wisconsin online sports betting will not be an economically viable pathway for their members into 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, which operators cannot afford to do in the low-margin business of online sports betting.

Tribes, Operators Both Want Legalized Online Sports Betting

Stewart was one of several speakers today during a Senate Committee on Agriculture and Revenue public hearing of Marklein’s bill.

The bill proposes allowing Wisconsin Tribes to offer 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.

However, when introduced in late October, there was no clarifying language on whether tribes would be allowed to partner with online sports betting companies to use their platforms or only be allowed to offer their own designed platforms.

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, according to Stewart, if the state legalizes through this plan, the largest sports betting operators in the country will not be able to afford to do business in Wisconsin. If legalized through IGRA, it requires license holders to provide at least 60% of their gaming revenues to their tribal partners.

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.

In this current model, no major sports betting companies will find it profitable to do business in Wisconsin, he said. Without the presence of DraftKings, FanDuel, and the other major sports betting operators, Wisconsin’s sports betting market will not be able to compete with other states or the offshore markets.

“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.

If the Sports Betting Alliance members can work with the tribes towards a solution, Stewart said a system will be created where tribes and state will receive the revenues they want, the state consumer protections will be rampant, and the operators will be able to do business in Wisconsin.

Working Towards Legalization

The legislation, Marklein said, will legalize what many are doing illegally right now in the Badger State. Millions of dollars are bet each year through illegal, offshore sports betting markets, he said.

“We’ll make this legal and collect taxes on this, which we certainly need, to support healthcare and schools in the state. It will certainly benefit tribes as well,” he said.

Several Wisconsin tribal representatives spoke out in favor of the bill. Ho-Chunk Nation Representative Ed Mullen said tribal nations rely on gaming revenue to support their initiatives, and while tribal casino operations do well, many tribes are still “woefully short of what is needed.”

Legalized online sports betting would help Wisconsin tribes bridge revenue gaps and ensure consumer protections for residents, he said.

“This will allow the nation and other tribes to tap into a new revenue source to be used to support our tribal government functions,” Mullen said.

Jeff Crawford, attorney general for the Forest County Potawatomi Tribe, reported the Milwaukee Brewers, Milwaukee Bucks, and Green Bay Packers are all in support of the legislation being signed into law.

The Forest County Potawatomi Tribe, he said, 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 had no such discussions as of yet.

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.”