NIGA, AGA now appear to be on same page on legal sports betting

Tribal And Commercial Casino Alliance On Sports Betting Gains Momentum After Slow Start

sports betting alliance momentum
After a rocky start, a lobby alliance teaming the American Indian and commercial casino industries on the potential repeal of a federal ban on sports betting gained momentum at a gathering of indigenous leaders last week in Phoenix.

The National Indian Gaming Association (NIGA), confident it now has the support of its membership, openly embraced a partnership with the American Gaming Association (AGA), an alliance that when first announced in July drew the ire of several tribal leaders.

AGA, through the establishment of the American Sports Betting Coalition (ASBC), is seeking repeal of the Professional and Amateur Sports Protection Act (PASPA). AGA, the trade association for the commercial gambling industry, has at least nine tribal members.

NIGA’s executive board announced in August it was joining the coalition to monitor the group, not to advocate for repeal of PASPA.

But the move generated pushback from many of the 244 tribes operating casinos in 28 states who are either opposed to sports betting or concerned about the impact expanded gambling would have on casinos generating revenue to provide government services to indigenous citizens.

NIGA and its stance on sports betting now

In a carefully worded statement, NIGA last week said it was joining the coalition to “ensure that any enacted sports betting legislation respects existing tribal rights and preserves the sovereignty of Indian tribes.” The NIGA statement did not mention advocating for repeal of PASPA.

“It’s important to protect our industry,” NIGA Chairman Ernie Stevens said at last week’s conference. “We can provide feedback to the coalition on the impacts on Native gaming … ensure that Indian gaming has equal footing in these discussions.

“It’s important to understand where we’re coming from. We’re (NIGA and AGA) working together and there’s nothing wrong with working together.”

AGA applauded the show of unity between the commercial and tribal government segments of the legal gambling industry, which combined consists of almost 1,000 facilities generating $60 billion annually and employing more than 650,000 people.

“Working with NIGA and the tribal community is a top priority for AGA as we seek an end to the federal ban that’s driving a $150 billion illegal sports betting market,” said Sara Slane, AGA senior vice president of public affairs.

“It’s a unique opportunity for the industry,” Slane told attendees while participating in a panel discussion at the NIGA conference.

But an AGA press release quoting Slane as saying that Stevens “and other tribal leaders have been instrumental in the fight to overturn this harmful piece of legislation” was later deleted from the AGA website.

NIGA Chief of Staff Debbie Thundercloud reiterated Friday that the association’s decision to join the coalition “was not intended to be an endorsement of PASPA repeal, but rather to ensure that tribes have a seat at the table and to monitor the discussions that were taking place.”

PASPA repeal remains problematic for tribes

What remains problematic is the impact PASPA’s repeal will have on tribes operating casinos under the Indian Gaming Regulatory Act (IGRA) and tribal-state regulatory agreements, or compacts, required from tribes operating Las Vegas-style casinos.

“We can’t jump in with both feet without understanding the implications” of federal or state legislation rising out of a repeal of PASPA, NIGA Executive Director Jason Giles said.

Should the US Supreme Court rule to say PASPA is unconstitutional – a decision is expected next year – it would fall to Congress or individual states to move on a regulatory and tax scheme for sports betting.

Tribal political consultants are skeptical regulating sports betting will be a priority on Capitol Hill. But more than a dozen states have moved to enact anticipatory legislation in the event the ban is lifted.

Tribes, as sovereign governments, want parity with states on regulatory and taxation matters.

The current legal and regulatory schemes and compact language governing tribal gambling differ markedly among states with Indian casinos.

Tribes operating under compacts or state law guaranteeing them exclusivity to operate casinos could conceivably benefit from sports wagering as an additional amenity.

But it likely would require negotiating new or amended tribal-state compacts, a process often fraught with politics and demands from state officials for a share of tribal revenues.

In addition, IGRA limits tribes to forms of gambling otherwise legal in the states where the indigenous communities are located. Some tribes are seeking the option to operate sports betting in states that do not permit the activity.

Lifting the PASPA ban could also generate competition to tribal operations from state lotteries, card rooms and commercial casinos seeking to engage in sports betting.

Legal diversity in Indian country

The diversity in tribal-state compact language and IGRA legal constrictions make development of a nationwide policy on sports gambling for Indian country difficult, a topic broached by tribal officials at a NIGA panel discussion closed to the press.

“That’s going to be very hard to do,” said Sheila Morago, executive director of the Oklahoma Indian Gaming Association and a participant in the discussion.

“Every state is different,” said Ernie Stebbins, executive director of the Washington Indian Gaming Association, who also participated in the seminar. “The compacts are all different.”

Unlike commercial casinos, IGRA and the tribal-state compacts put tribes at a potential disadvantage with any expansion of federal or state-sanctioned gambling, whether it is sports betting, internet wagering, daily fantasy sports or other new forms of gaming.

“The whole compacting process makes things more complicated,” said James Klas of Klas Robinson, a hospitality consulting company doing business in Indian country.

“And it’s likely to be a much longer process,” he said of the need to negotiate new and amended compacts, which require approval from tribal, state and federal officials.

The legal cloud over the ability of tribes to accept wagers from outside reservation boundaries may prompt indigenous communities to pursue sports betting not as a government enterprise under IGRA, but as a commercial venture, taxed and regulated by the states.

The NIGA statement on sports betting adopted last weekend was similar to the group’s earlier position on internet gambling, calling for recognition of tribal sovereignty and self-regulation and tax status of tribal government gambling enterprises.

The statement also demands that any federal or state legislation resulting from the lifting of a PASPA ban “ensure that tribal interests are protected, particularly the avoidance of any negative impacts on [compacts], exclusivity clauses and brick and mortar properties.”

AGA off to a clumsy start

An alliance of the commercial and tribal government segments of the legal gambling industry has been a topic of discussion for well over a decade.

While tribal leaders express reservations about the NIGA/AGA alliance – particularly in lobbying for PASPA repeal – they applaud NIGA’s move to secure a seat at the table in the coalition’s deliberations.

“I think it’s a beneficial relationship,” says a prominent Capitol Hill tribal consultant who requested anonymity. “AGA has a lot of people they can pull together. They’re doing a lot of strategic thinking.”

But the partnership got off to a rocky start when the ASBC website, in calling for repeal of PASPA, advocated that federal law “give states the ability to decide the question of legalization.”

AGA in response to criticism from indigenous leaders and coverage by Legal Sports Report, heavily edited the website, acknowledging the status of tribes as sovereign governments not subservient to states.

AGA President and CEO Geoff Freeman also was criticized by tribal leaders for telling Legal Sports Report that ten tribal members of AGA generated a third of the annual revenues generated by the 244 tribal casinos nationwide, or about $10 billion.

Tribal governments since enactment of IGRA in 1988 have expressed sensitivity to the perception of indigenous Americans as being wealthy as a result of government casinos.

Still splits among tribes

The AGA website identifies as members seven tribal casino enterprises and two tribal governments. They include largely urban tribes with lucrative casinos, including commercial casinos and horse racing tracks.

Thirty-three Indian casinos generated nearly half the $31.2 billion won by tribes nationwide in 2016, according to the National Indian Gaming Commission, the federal agency which audits tribal casinos.

Eighty-four facilities generated 72.9 percent of the win, or $22.7 billion, leaving nearly 400 operations to divvy up the remaining $7.3 billion.

The more lucrative, urban tribal casinos are likely to benefit from sports betting, a labor-intensive niche that requires a large capital investment and industrywide generates only a four to six percent profit margin.

The rural, marginal Indian casinos on often impoverished reservations that represent the bulk of the tribal gambling industry are not likely to engage in sports betting, according to industry experts.

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.