The impact of sports betting on the nation’s 255 American Indian tribes operating casinos will become clearer when indigenous leaders gather next week in Phoenix for the National Indian Gaming Association (NIGA) midyear conference.
The topic will be raised at panel discussions and a NIGA membership meeting Wednesday that may be closed to the press.
The pending US Supreme Court review of the Professional and Amateur Sports Protection Act (PASPA) is prompting several states to draft anticipatory legislation in the event the nationwide ban on sports gambling is repealed.
The American Gaming Association (AGA), the lobby for the commercial casino industry and at least nine tribes and tribal casino enterprises, is pressing for PASPA’s repeal, which could result in a massive expansion of legal gambling.
North Americans this year wagered $15 billion on professional football and college basketball championships, 97 percent of which was wagered illegally, according to the AGA. They annually bet some $58 billion on professional and college football.
The $31.2 billion tribal government gambling industry would likely embrace the opportunity to offer sports betting to patrons of some 484 casinos in 28 states.
But tribal leaders in California and some other states are pushing back against dropping the ban for fear it would negatively impact a tribal casino industry generating revenues to provide government services to indigenous citizens.
Federal, state laws are often obstacles to tribal gambling
Unlike commercial casinos taxed and regulated by the states, tribes operate under federal law and tribal-state regulatory agreements – or compacts – that limit the scope of gambling on Indian trust lands.
Expanded federal or state-sanctioned gambling could create competition and otherwise negatively impact exclusivity provisions in state law and the compacts. Compact language and legal limits on tribal casinos vary markedly among states with Indian gambling.
“Everyone agrees it would bring more people in the casino. The issue is with implementation,” says a tribal official who, like many agreeing to discuss the issue, spoke only with the promise of anonymity.
“The issue hasn’t yet been discussed by even a small minority of tribes.”
It also is not clear if, under the Indian Gaming Regulatory Act (IGRA), sports wagering would constitute Class III casino gambling requiring amendments to tribal-state compacts. Re-drafting compacts could be problematic in some states.
A few believe sports wagering could be categorized as Class II gambling such as bingo or poker, which would not require a state regulatory agreement.
Tribes would otherwise have to operate sports betting as a commercial venture taxed and regulated by the state.
Another state vs. tribe concern
Finally, tribes are concerned that they would not be able to offer sports wagering – either under IGRA or as a commercial venture – in a state which opts not to allow the activity. IGRA limits tribes to gambling activities otherwise legal in the state in which they are located.
John McCarthy, executive director of the Minnesota Indian Gaming Association, says tribes in the Land of 10,000 Lakes would reject the notion of renegotiating existing compacts, which have no revenue-sharing provisions.
Tribes would instead seek a separate agreement for sports betting. He predicts state officials would seek a big chunk of tribal revenues from the books.
Tribes in Minnesota and elsewhere would also oppose extending sports betting to state lotteries.
“Every state is going to be slightly different,” says Joe Valandra, a consultant and former chief of staff for the National Indian Gaming Commission. “The situation is very unclear.”
California, other states pushing back on sports betting
California, home to the nation’s largest Indian gambling industry with 62 tribes annually generating some $8.4 billion, is pushing back against lifting the ban. Tribes fear card rooms and horse racing tracks could offer sports wagering, violating tribal exclusivity promised in state law.
Tribes in the Golden State also fear enacting state legislation could lead to internet gambling, prompting judicial review of the ability of tribes to accept wagers from beyond reservation borders. IGRA generally limits gambling to trust lands.
“To sign onto an expansion of gaming without knowing the details, that doesn’t make any sense,” says Steve Stallings, chairman of the California Nations Indian Gaming Association (CNIGA), the state’s largest gambling association with 31 tribes.
“Without specific language and give-and-take, right now we’re against legal sports betting.
“Unless there’s something specific about the role of tribes or [assurance] that sports betting is not on the internet – or specifying that winnings would have to be cashed at a brick and mortar facility – those are all things CNIGA would look for relative to legislation on sports betting.”
Tribes in Minnesota, Washington and elsewhere are also expressing reservations about how legal sports wagering would impact statewide legal and regulatory gambling policy.
The Mohegan and Mashantucket Pequot tribes in Connecticut favor lifting the sports wagering ban. The Seminole Tribe of Florida is also hoping to offer sports wagering at its national chain of Hard Rock properties.
Sports betting on Indian lands ‘not yet on the radar’
For many of the more marginal, rural tribal casinos, sports wagering remains a low priority of Native leaders focused on governmental issues and Department of Interior/Bureau of Indian Affairs policies of President Donald Trump.
“It really isn’t high on anyone’s radar right now,” a tribal official says.
Efforts on a sports wagering bill in California, home to 110 of the 367 federally recognized tribes in the lower 48 states, failed this year but are expected to resurface in 2018.
California lobbyist David Quintana believes there will be growing tribal support for sports wagering in the 2018 legislature. But he anticipates issues that for a decade divided tribes on online poker will resurface with sports wagering; largely participation by card rooms and the racing industry.
“I’m expecting something will pop next year,” Quintana says. “And all the issues involved with internet poker are going to resurface again.”
Quintana predicts growing tribal support, particularly if PASPA is overturned.
“CNIGA’s position will evolve as their members’ interests evolve,” he says.
“CNIGA’s position was created at a time this wasn’t on the horizon. Now that it’s on the horizon you might see their position evolves again with interest from their individual members.”
Stallings denies there is growing statewide momentum in California to embrace sports gambling.
“I don’t feel that anybody with CNIGA has come to that conclusion,” Stallings says, noting a “fairly lengthy discussion” of the topic at an August recent membership meeting.
Sports wagering debate includes marketing, operation issues
A sportsbook is a unique niche of the gambling industry, requiring a skill set not generally found outside Nevada.
A Las Vegas Strip sportsbook normally doesn’t generate much of a casino’s bottom line and is largely a marketing tool for a younger, upscale profile of gambler not patronizing most tribal casinos.
Operating a book is labor-intensive process and can be risky, an issue that will likely be broached at the upcoming NIGA midyear conference.
One tribal lobbyist predicts Congress will likely enact nationwide legislation to regulate sports betting should justices repeal PASPA. The lobbyist likened the situation to Congress enacting IGRA following the high court ruling in California v Cabazon Band of Mission Indians.
“I don’t think Congress is going to want every state determining what kind of sports betting they’re going to have,” says the lobbyist, who requested anonymity.
“Just like the Supreme Court in the Cabazon case spurred IGRA, the feds are going to want to set down some rules.
“Are you going to have each tribe set their own betting line? That’s going to be ripe for corruption. There has got to be some national regulatory framework.”
Tribes will likely turn to Nevada for expertise in establishing books and wagering lines, much the way tribes following passage of IGRA sought out expertise in running casinos from the Silver State and New Jersey.
“I’ve spoken to a couple of tribes who are pretty (lucrative) who say, ‘Hey, opening a sportsbook is not the easiest thing,’ ” the lobbyist says. “Opening a sportsbook is a huge endeavor.”
“It’s a real skill to be able to manage those facilities and make them profitable,” Stallings says.
“The big challenge is the liability,” says Ron Allen, chairman of the Washington Indian Gaming Association.
“You can have big wins and you can have big losses. You have to be really well financed. You also have to have people who know what they’re doing.”
