Indian Tribes Will Hold Major Influence On Spread Of US Sports Betting

Written By

Updated on

sports betting spreading

The sports betting crystal ball remains a bit murky, even after the Supreme Court struck down PASPA last week.

How will state legislators work with sports leagues and casino operators to craft legislation? Will the federal government get involved? What will the NBA be calling “integrity fees” by next month?

Perhaps the most important answer needed to predict the speed of national sports betting expansion: How will gaming tribes engage?

Widespread presence of tribes shows their influence

About 250 tribes offer some form of gambling. Some are protected by exclusive rights to do so, negotiated with states in exchange of a cut of revenue. Protecting their exclusivity presents one of many concerns for tribes in the sports betting discussion. Gaming research firm Eilers & Krejcik laid out the breadth of those issues:

Many are wary of states using sports betting as a way to erode tribal exclusivity, or to reopen lucrative gaming compacts for renegotiation. In a number of major markets, primarily to the west of the Mississippi, tribes are a or the dominant gambling stakeholder. Without a clear path toward sports betting policy that resolves their concerns and offers a compelling financial opportunity, it’s difficult to see why tribes would let sports betting through.

Tribes needed time to back sports betting

Some tribes initially resisted backing a repeal of PASPA for the reasons listed above. In April, though, the National Indian Gaming Association came out in favor of sports betting and laid out conditions for its support. The list appears a comprehensive opening offer in what will be a protracted negotiation on many fronts.

Tribal gaming generated $31 billion in revenue across the country in 2016, according to information from the National Indian Gaming Commission. That provides tribes a significant presence in any discussion amending existing compacts or defining how sports betting affects exclusivity.

Checking in on Connecticut

One state to watch is Connecticut, which appears poised to be an early adopter of sports betting. State legislators approved the wagers last year, but tribal issues remain at the fore before implementation.

Operated respectively by the Mohegan and Mashantucket Pequot tribes, Mohegan Sun and Foxwoods Resort Casino dominate the Connecticut market. Tribes in Connecticut pay 25 percent of slot revenue to the state per the rules of their compact.

The tribes argue sports betting could violate the compact and threaten slot revenue payments. The state attorney general disagrees. Now Gov. Dannel Malloy will step into the fray to mediate.

“If we were to move forward without a compact then we would endanger the revenue we already receive from the tribes, so negotiating a compact by its nature is an executive function,” Malloy told CT News Junkie. “Adoption of laws in how that compact would play out is a legislative function.”

In a New York Times article this week, Mashantucket Pequot Tribal Council chairman Rodney Butler expressed willingness to deal.

“We have said, ‘We want to work with you,’” Butler said. “Let’s work out an arrangement.”

California could be a heavier lift

In the world’s fifth-largest economy — the Golden State — tribal gaming hauls in $8 billion a year. The tribes enjoy protection in the state constitution for casino games and appear to understand the powerful position they hold.

“California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games,” Steve Stallings, chairman of the California Nations Indian Gaming Association, told the Times. “Legalization of sports betting should not become a backdoor way to infringe upon exclusivity.”

Any deal in California must navigate an electoral labyrinth to become law because of the constitutional change. State legislators would need a supermajority to approve an agreement, the governor would need to sign it, and state voters would have to back a ballot referendum.

Other tribal perspectives on the post-PASPA world

NIGA Chairman Ernie Stevens Jr. told the Associated Press this week that his organization stands ready to embrace sports betting.

“I don’t believe this is going to take the place of our slot machines, but it’s another amenity we can enjoy and people can have fun with,” Stevens Jr. said. “And we want to be able to move forward with the overall industry.”

In the same piece, tribal officials in Oklahoma talked about wanting to meet customer demand.

“The conversation is always, ‘Why don’t you do like Vegas?’” said Sheila Morago, executive director of the Oklahoma Indian Gaming Association. “Everybody always wants to give their customers things they have asked for.”