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Billings group challenges Montana Lottery rule requiring alcohol license to offer sports betting

Posted at 6:54 PM, Jan 15, 2020
and last updated 2020-01-15 22:36:09-05

A Billings-based investment group is 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 it 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 law was very clear that it only required a gambling operator license,” said Lyndon Scheveck, who is representing Arete Group along with his firm. “The Montana Lottery is adding an additional requirement that is ingrafting the rule set by the Legislature in 2019.”

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

The Montana State Lottery said in a brief in response to the injunction: “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 its 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 News it's in the process of reviewing those applications, working on training for sales agents and planning the placement of equipment.