Audit Determines Montana Lottery Breaking State Law

Montana station KFBB and the Helena Independent Record reported on the results of an audit by the Audit Division of the Montana Legislature. The audit focused on the implementation of fantasy sports wagering by the Montana Board of Horse Racing and the Montana Lottery.

The basic findings are that:

• The Board of Horse Racing's agreement with the Lottery circumvented rule-based procedures;
• The Board of Horse Racing and the Montana Lottery did not proceed according to statute in implementing HB 616; and,
  
• The involvement of the Montana State Lottery is not in compliance with statute.
  

According to the well researched and public legislative audit as opposed to the allegedly poorly researched (if at all) and non-public "due diligence" from the Board of Horse Racing and the Montana Lottery, the Lottery is outside its statutory authority to offer a gambling game of this kind. Since Montana gambling law is very strict, in that all gambling is illegal unless specifically authorized, the audit found the Montana Lottery is breaking the law. Because of that, the Montana Lottery may be considered to be an illegal gambling enterprise, a term that has specific liabilities in both Montana law and federal law.

A previous post discusses how in Montana bettors that lose money participating in an illegal gambling enterprise can sue to get their money back. This audit could make the persuasive case for an attorney with some time on their hands and a desire to perhaps pick up some contingency case cash.

What has not been reported and was kept out of the audit findings is going to be revealed. This blogger assisted in the audit by providing internal YouGaming.com information that showed to what extent other parties could have offered a pari-mutuel fantasy sports gambling game compliant with HB616 well before the beginning of the 2008 NFL season, completely negating the lame arguments from the Board of Horse Racing that no one else but the Lottery and their vendor partner could offer a game and therefore were deserving of the "sweetheart" 8-year sole source agreement.

If a private entity in Montana was operating a game like this, it is very likely that entity could be facing both Montana and federal criminal charges of operating an illegal gambling enterprise. However, it appears that according to Montana law, it doesn't matter if the improperly operating entity is a government or private entity. Illegal gambling is illegal gambling.

The current game is not very popular, as discussed in previous posts, here, here, and here. With several horse racing board members' terms expiring in January, we'll see if some new and more competent thinking will come to the fore and put an end to the joke that is the Lottery's fantasy sports gambling game, Montana Sports Action.

What is lost in this discussion is another loser - the Montana horse racing industry. By placing their trust in the Board of Horse Racing, they placed a bet that may have doomed live racing in the state.