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Tribes Pleased With Congressional Sports Betting Bill Draft, But Philosophical Split Remains

Draft federal legislation to repeal a national sports betting prohibition and regulate the activity goes a long way toward resolving concerns by American Indian casino tribes, sources told Legal Sports Report.

The bill draft being circulated by Rep. Frank Pallone (D-NJ) places federally recognized tribes within the definition of “states” in establishing regulatory jurisdiction for sports betting.

The draft, which has not been introduced, also specifies that nothing in the legalization of sports betting “shall be construed as altering, limiting or extending” state law or tribal-state regulatory agreements, or compacts, governing the operation of casinos on tribal lands.

Finally, the act would not impact tribal guarantees in the Indian Gaming Regulatory Act (IGRA).

Many of the 244 federally recognized tribes operating casinos in 29 states have expressed opposition or concern about lobby efforts by states and the commercial gambling industry seeking repeal of the Professional and Amateur Sports Protection Act (PASPA).

The debate has driven a philosophical wedge between more than 100 tribal members of the National Indian Gaming Association (NIGA) and nine tribal governments and gambling enterprises that recently joined the American Gaming Association (AGA), a largely commercial gambling group.

AGA and the American Sports Betting Coalition (ASBC) – a bloc of gambling industry, law enforcement and state and local elected officials – is lobbying for repeal of PASPA, seeking to defer authority over sports betting to the states.

NIGA tribes oppose the coalition’s support of states’ rights, claiming it infringes on Indian sovereignty and indigenous rights under IGRA to conduct and regulate gambling on tribal lands.

Tribes pleased with Pallone draft

Pallone’s bill draft, with input from NIGA, the trade group and lobby for the $31.2 billion Indian casino industry, resolves many tribal concerns.

“His draft bill goes a long way toward what tribes could support,” said a tribal official involved in the lobby effort who requested anonymity.

There is a continuing effort to tweak the legislation to expand the ability of tribes to offer sports wagering in states that choose not to legalize the activity, sources say. IGRA currently limits tribes to forms of gambling otherwise legal in the state where they are located.

The ASBC website says it is advocating the repeal of PASPA to “give states the ability to decide the question of legalization.”

The coalition, according to its website, seeks to:

  • Defer to states regarding the desirability of regulating sports betting as all forms of casino wagering.
  • Ensure the integrity of sports betting and sports through state licensing and regulation.
  • Make all sports betting businesses transparent to law enforcement.
  • Ensure a tax regime does not undermine regulated sports betting operations’ ability to compete against illegal offshore operators.

The coalition goals conflict with IGRA, which gives primacy for the regulation of gambling to tribal governments. IGRA also prohibits taxation of casino revenues.

Tribes along with the federal and state governments are sovereign under the US Constitution. County and municipal governments are chartered by the states.

AGA denies working against tribes

Officials with AGA, which largely consists of commercial gambling companies but also includes at least nine tribal governments and business enterprises, contend the coalition is not seeking to limit IGRA.

The group also claims it is not attempting to infringe on tribal-state compacts which in some instances provide tribes statewide or regional exclusivity to conduct casino gambling.

“Repealing PASPA simply gives states, commercial and tribal operators the opportunity to pursue sports wagering if they so choose,” AGA President and CEO Geoff Freeman said in an email.

“States would have the opportunity to choose whether the activity should be regulated within their borders – it does not necessarily mean that they are the regulator and it certainly doesn’t mean that they can violate existing exclusivity agreements.

“Any suggestion to the contrary is fear mongering.”

Many tribal officials disagree, including leaders within NIGA.

“They’re (AGA) clearly promoting legalization of sports betting and they want to turn it over to the states,” says a high-ranking tribal official who requested anonymity.

“Any tribal leader who reads that (coalition website) is going to say, ‘No, we’re not getting on board with that.’”

“Absolutely not,” says Steve Stallings, chairman of the California Nations Indian Gaming Association, a group of 31 casino and non-gambling tribes.

“A lot of states don’t have governments friendly to tribes.”

Chairman Robert Martin of the Morongo Band of Mission Indians near Palm Springs, Calif., a member of both NIGA and AGA, said he, too, is opposed to states’ rights.

“I wouldn’t consider states’ rights with any issue,” he said. “Our tribe has always worked at a federal level.

“We’re forced to negotiate with the governor because we’re gaming in the state,” Martin said of the IGRA requirement that tribes enter into a tribal-state compact to operate casino gambling.

“But I’m not a states’ right guy when it comes to tribal politics.”

NIGA criticized on coalition

There was tribal backlash to NIGA’s decision at a July 17 board meeting to join the AGA coalition.

NIGA Chairman Ernie Stevens said the group was planning to monitor the group and not advocate the repeal of PASPA.

“Of chief concern to NIGA is to ensure that tribal interests are protected, particularly avoidance of any negative impacts on existing compacts and exclusivity clauses,” Stevens said.

“As one of the key stakeholders in these discussions we want to ensure that, if legalized, our members have the opportunity to offer this activity as part of their overall entertainment package and as an additional source of revenue for tribal government gaming to promote tribal economic development, tribal self-sufficiency and strong tribal government.”

But opposition grew with trade publication headlines wrongfully indicating NIGA was endorsing repeal of PASPA. There was also criticism of the AGA website advocating states’ rights.

“I don’t think everybody knew the position of AGA and the coalition,” a tribal source said of the NIGA board meeting when the decision was made to join the coalition. “They wanted to get involved in the debate.”

“The decision NIGA made in joining the AGA coalition just shows the membership wants a seat at the table,” said Joe Valandra, tribal consultant and former chief of staff of the National Indian Gaming Commission, the industry’s federal regulatory agency.

“I can’t imagine it evidences agreement on anything else.

“I’m sure AGA is out trumpeting this to the various congressional delegations; ‘Look, we got the tribes behind us.’”

AGA boasts $10 billion in tribal revenue

“For what it’s worth, the ten tribes we represent account for approximately one-third of all tribal gaming revenue,” or $10 billion, AGA’s Freeman said.

AGA would not confirm its tribal membership.

Wind Creek Hospitality, Seminole Hard Rock Gaming, Cherokee Nation Entertainment, FireKeepers Casino Hotel, Foxwoods Casino Resort and Mohegan Tribal Gaming Authority are tribal gambling enterprises listed as members on the AGA website.

Morongo and the Chickasaw Nation are listed as tribal government members.

LSR independently verified that San Manual Casino also recently joined the group.

The tribes and the AGA

Martin said the Morongo band and others make a distinction between tribal governance and casino and other business enterprises. AGA provides the tribe access to gambling resources NIGA does not provide, he said, but the group does not represent tribal governance.

“We have to look at different options,” Martin said. “Gaming is so competitive these days. If you’re not out in front, you’re left behind. That was the big distinction for my council.”

“Because NIGA’s looking out for their interest in gaming, obviously tribes need to be at the table on this one,” Valerie Spicer, partner in Trilogy Group, a tribal government relations firm, said of NIGA’s decision to join the coalition.

“Tribes are not only governments. They are being thrust into the role of major corporations.”

“Tribes are turning to the AGA for expertise,” said tribal attorney John Tahsuda.

“AGA doesn’t represent tribes. It represents tribal casinos.”

The irony is not lost on tribal leaders that commercial casinos waged a long, arduous political battle against IGRA and Indian gambling.

The Las Vegas casino industry in cohorts with the International Culinary Union fought Proposition 1A in California. The landmark 2000 ballot initiative – approved by 63 percent of the voters – amended the state constitution, paving the way for what is today the country’s largest statewide Indian casino industry, last year generating $8.4 billion.

“Years ago we had a very tense, contentious relationship,” said Ron Allen, chairman of the Washington Indian Gaming Association.

“I wouldn’t call relations warm now, but at least there’s cooperation,” Valandra said.

Dave Palermo :Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law.