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Group challenges Lottery rule requiring alcohol license to offer sports betting

Posted at 6:15 PM, Jan 15, 2020
and last updated 2020-01-16 14:04:05-05

HELENA — A Billings-based investment group are suing the Montana State Lottery for the right to be granted a sports wagering license.

In a lawsuit filed in Lewis and Clark County District Court, Arete Group, LLC alleges they should be issued a sports wagering license by the Montana Lottery as outlined in House Bill 725 and passed by the 2019 Montana Legislature.

Last year the Montana Lottery Commission added a rule requiring “an appropriate alcoholic beverage license” in order to obtain a sports wagering license.

During legislative hearings on HB 725, lawmakers heard testimony requesting sports wagering be limited to taverns. Legislators amended the bill to require “a gambling operator license” to limit locations with gambling, but not require an alcohol license.

“The Montana Tavern Association are trying to create a monopoly on sports betting," said Lyndon Scheveck, who is representing Arete Group along with his firm. “The law was very clear that it only required a gambling operator license. The Montana Lottery is adding an additional requirement that is ingrafting the rule set by the Legislature in 2019.”

Montana Tavern Associated government affairs counsel John Iverson responded in a statement: "There are 1400 sports bars, restaurants, taverns and casinos across Montana...that hardly meets the definition of a Monopoly.”

“The lottery was granted rule making authority by the Montana Legislature, and they appropriately used that authority.”

Arete Group has already been granted a gambling operator license, and are seeking an injunction that would stop the Lottery from issuing sports wagering licenses until the matter is resolved.

In the Montana State Lottery’s Brief in response to the injunction, they say: “HB 725 specifically directed the Lottery to use its rulemaking authority to adopt rules regarding sports wagering and sports wagering sales agent licensing.”

The Montana Lottery told MTN their policy is not to comment on ongoing litigation.

So far the Lottery reports receiving hundreds of applications from business wanting a sports wagering license. Communications Manager Jennifer McKee told MTN right now they’re in the process of reviewing those applications, working on training for sales agents and planning the placement of equipment.