It’s not a sure bet: Our state’s first venture into sports betting looks to give all profits to tribal casinos

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By Matt Nagle

matt@tacomaweekly.com

Among the various pieces of legislation facing lawmakers in Olympia this session, sports betting took a front seat on Feb. 13. In a quickly arranged nighttime floor vote, the State House overwhelmingly approved HB 2638 (83-14) in a bipartisan vote to allow sports gambling in tribal casinos. Now, the issue moves on to the Senate where a companion bill must pass before the legislative session ends March 13. From there, it’s on to Gov. Jay Inslee’s desk for his signature.

Two House bills were on the table. Essentially, HB 2478, sponsored by Sen. Curtis King (R-Yakima), called for allowing sports betting in tribal casinos, race tracks, privately owned cardrooms and mobile devices. HB 2638, sponsored by Rep. Strom Peterson (D-Edmonds),allows sports wagering over the Internet, but requires a wager to be placed and accepted only while the customer is physically at the gaming facility, in this case at tribal casinos only. It sets aside $6 million for the state Gambling Commission to investigate illegal sports gambling and enforce rules and regulations. In addition, HB 2638 passed with an amendment to prevent the sports betting issue from being subjected to a statewide referendum. 

Peterson indicated that the legislation is scheduled to receive a hearing in the Labor and Commerce Committee this coming week. 

“I’m hoping that we’ll have the hearing and move out of committee on a relatively quick timeline and get it to the floor of the Senate,” he said, noting the legislature’s short session ending on March 13. “If the Senate were to pass an identical version of the House bill, then it goes to the governor. If they make changes, they’ll send it back over and we have to come up with an agreement on the final language.”

The senate’s companion bill, SB 6394, is currently in that chamber’s Ways and Means Committee. “Our intent was to have true companion bills all the way through,’’ bill sponsor Sen. Rebecca Saldaña told the Seattle Times. “I think that ours is a mirror of theirs. And if it is a mirror, and we don’t do any more mucking around of their version, then it can go straight to the governor.’’

Peterson said that overall, “I’m feeling pretty confident. When you have a bipartisan vote like that (in the House), it really sends a message to the Senate that it has a lot of support in this chamber and it’s something that we’re interested in getting to the governor’s office. I think there’s a lot of support to move it along.” 

CASE STUDY: OREGON

Last year, sports betting began in Oregon overseen by the Oregon State Lottery Commission. Choosing not to restrict sports wagering to just tribal casinos, the Oregon Lottery Commission launched its own system and awarded the contract to SBTech, which also provides sports betting platforms for New Jersey, Pennsylvania and Mississippi. 

Players in Oregon can place bets online with the downloadable app Scoreboard, via self-service kiosks at retail locations or through a lottery version of sports betting. Only professional sports are legal to bet on, not college level or March Madness. Players must also must be 21 years or older, whereas in Washington State, 18 years is the legal age to gamble.

Even though the U.S. Supreme Court legalized sports betting in May 2018, not everyone is on board for it to begin right away in Washington State. 

“I would urge you not to expand any form of gaming in this state, in any way, until there is sufficient software and technology that’s actually going to keep young people from accessing it,” Washington Superintendent of Public Instruction Chris Reykdal said to senators during a hearing on HB 2638, specifying that he’s concerned with how the bill allows betting with cell phones.

Washington State Rep. Derek Stanford, who was chair of the House Commerce and Gaming Committee from 2011-2019, told KING 5 News that before our state legalizes sports betting, it needs to address concerns that include the effects of legalized sports betting on public health and how it would affect tribal casinos.

“My sense is that we don’t want to be the ones breaking new ground here,” he said. “If other states are doing this, we can see what experience they have.”

The National Collegiate Athletic Association (NCAA) has come out against sports betting overall, stating that it could put the integrity of games into question.

CASINOS: HOW SAFE?

Sports betting in Oregon gives a state monopoly to the Oregon Lottery, a level of control and protection of the public that appealed to lawmakers there. In Washington State’s case, it appears that sports wagering may well be subject to the terms of tribal-state gaming compacts, with the safety and security of tribal casinos being paramount.

As stated in HB 2638, “Tribes have more than twenty years’ experience with, and a proven track record of, successfully operating and regulating gaming facilities in accordance with tribal gaming compacts. Tribal casinos can operate sports wagering pursuant to these tribal gaming compacts, offering the benefits of the same highly regulated environment to sports wagering.”

Puyallup Chairman David Bean echoed these words in testimony before legislators. “You know us; you trust us,” he said. Bean has been embroiled in past controversies as a smoke shop owner and dealt with federal tax issues. His family smoke shop was raided a few years back for drug activity and was known as the largest provider of oxycontin in the county. His family members were convicted and given long jail terms. 

In actuality, the very origin of casinos is mob related to launder money – this has been the casino legacy in general. While tribes have been able to capitalize on the federal Indian Gaming Act and have had much success, statistically Native communities still have the highest unemployment rate, the fewest in colleges and the highest in addictions. Success doesn’t always mean a better life.

Looking into the level of security at the Emerald Queen Casino, for example, reveals a less than stellar record. It has been plagued with cheating scandals. Several years ago, a well-organized gang that was working west coast tribal casinos targeted the Puyallup and Muckleshoot tribes, with their favorite target being the EQC’s pai gow, baccarat and blackjack games that netted cheaters millions of dollars. Federal authorities launched an ongoing investigation, allowing the scamming players to continue until authorities could step in. The EQC underplayed the amounts lost and, despite the feds’ recommendations, did not report it to their insurance company or make it public for fear of bad publicity. 

The plague goes on at the EQC, more recently with what are called “ghost payouts” – tickets being turned in from slot machines that had no play on them. In one of the largest state and federal investigations looking into the details of how it happened, it was discovered that a slot machine vendor was able to download software from the EQC’s computer system and print false tickets. Employees were dismissed for the lack of security that included letting people into back rooms off limits to the public. To our knowledge, it is still under investigation. The EQC remains known along the west coast as an easy mark for professional cheaters, which is a very large business. 

When it comes to player tracking, the EQC is the loosest of all local casinos, maybe in all the country. While a form of player tracking was recently added, it does not track how much money players win or lose, which makes money laundering much easier. According to our sources, it happens quite frequently, from amounts as small as $500 to much larger amounts. It’s as simple as buying chips, losing a few dollars, turning in what you’ve got left and receiving “clean” money in return. 

It isn’t just the EQC that is plagued with cheaters; all casinos are targets. As we all know, technology today is hacked on a routine basis. The Russians changed the outcome of our elections – that’s how pervasive hacking is. How easy would it be for someone to hack sports betting on a phone? And these days, young people know more about the intricacies of cell phones than most adults. 

THE MONEY QUESTION

Another big point of controversy involves the revenue that stands to be collected through sports betting. In Oregon, the estimated state revenue in sports betting from October to December 2019 totals $2,514,785. Under state control, these dollars will go to service roads, fund education and the like. In Washington State, casino-owning tribes retain 100 percent of sports betting revenues. 

This is one reason why Maverick Gaming CEO Eric Persson hired a lobbyist and testified before lawmakers in Olympia to allow sports betting outside of tribal casinos. Maverick Gaming operates nearly half of the cardrooms in Washington State and 26 casinos across three states.

“Legal sports betting will give lawmakers the opportunity to create a regulated system that collects tax revenues that should be used to address community needs, support a strong sustainable workforce, and provide economic opportunity in this growing global market,” Persson said in a press release. “Critically, regulated, legal sports betting has the dual benefit of undermining offshore criminal networks which currently profit from the unregulated and unsafe system.”

Maverick lobbyist Vicki Christophersen testified in Olympia that all communities should benefit from sports betting. “We’re seeing across the nation the legalization of sports betting and the tax revenue that could come with that. The state can realize revenue as well as our partners in the tribes and in Indian Country.”

Peterson said that tribes will be responsible for paying some fees associated with instituting sports gambling in the state, but proceeds from actual gaming will stay with the tribes “to do the important community work that they do for their communities and surrounding communities.”

Asking tribes to pay their fair share into the state economy is the focus of a newly launched local campaign called “5% Share to Care.” The idea is for tribes to contribute 5 percent of casino earnings to the state in order to shore up funds for law enforcement, parks, housing, education, healthcare and more. Whether they win or lose at their particular games of choice, gamblers would continue enjoying their favorite pastime knowing that a portion of what they’re spending is being used to make Washington a better place to live for everyone. 

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1 COMMENT

  1. Too bad tribes are sovereign, and no amount of campaigning or fighting legal battles will force their hand. They do what they want, treaties ensure it for them for eternity. Crazy.

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