So How Exactly Is New Mexico Sports Betting Legal, And What Does It Mean In Other States?

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NM sports betting legality

Last week, Legal Sports Report reported that New Mexico was set to join early adopters of sports betting including New Jersey, Delaware, Mississippi, and West Virginia.

Now, it’s a reality, with the launch of a sportsbook at a tribal casino.

The news that Robert Walker and Vic Salerno of USBookmaking formed a deal with the Santa Ana Star Casino & Hotel in Santa Ana Pueblo, NM, caught many observers off-guard, as New Mexico had not introduced a bill during 2017 or 2018 to authorize sports betting at any of the state’s numerous tribal gaming facilities.

Interestingly, many inside New Mexico noted the possibility that sports betting could come to the state quickly after the Supreme Court ruled that the Professional and Amateur Sports Protection Act was unconstitutional.

Prior to the Supreme Court’s decision, a number of prominent New Mexico lawyers expressed skepticism that the state would jump at the opportunity to offer sports betting should the opportunity present itself.

The question of how Santa Ana Star Casino & Hotel offers sports betting may actually have a very simple answer if we look at New Mexico’s tribal gaming compact of 2015, which had its effective dates amended in 2017 and does not expire until the year 2037.

What does the gaming compact say?

The 43-page Indian Gaming Compact between the State of New Mexico and the following tribes:

The gaming compact is made pursuant to the Indian Gaming Regulatory Act of 1988, which details the manner in which states and tribes must negotiate in order to offer Class III gaming on tribal lands. Section 3 of the Tribal Compact details the authorized Class III gaming activities that the tribes can conduct; however, unlike many states which agree to an enumerated list of Class III gaming activities that can be conducted, New Mexico’s compact states:

“Permitted Class III Gaming. The Tribe may conduct, only on Indian Lands, subject to all of the terms and conditions of this Compact, any or all forms of Class III Gaming” (emphasis added). The agreement between the state government and Tribal governments seemingly grants the tribes, subject to the compact, extensive authority to authorize Class III gaming at their facilities.

There are limitations to the authorized Class III gaming activities which are contained in Section 3 (B) of the compact:

“Limitations. Subject to the foregoing, and subject to all of the terms and conditions of this Compact, the Tribe shall establish, at its discretion, by tribal law, such limitations as it deems appropriate on the amount and type of Class III Gaming conducted, the location of Class III Gaming on Indian Lands, the hours and days of operation, and betting and pot limits, applicable to such gaming.”

These limitations do not appear to impact the decision to offer sports betting at the Santa Ana Star Casino & Hotel prior to the end of October. Unless, sports wagering is not a Class III gaming activity.

Is sports betting a Class III gaming activity?

Sports betting is almost certainly a Class III gaming activity.

The Federal Register, which is a daily publication put out by the National Archives and Records Administration Office of the Federal Register, and contains:

Federal agency regulations; proposed rules and notices; executive orders; proclamations; and other presidential documents, declares that sports betting is a form of Class III gaming activity. In Title 25 of the Code of Federal Regulations at section 502.4 Class III Gaming is defined as:

Class III gaming means all forms of gaming that are not class I gaming or class II gaming, including but not limited to:

(a) Any house banking game, including but not limited to –

(1) Card games such as baccarat, chemin de fer, blackjack (21), and pai gow (if played as house banking games);

(2) Casino games such as roulette, craps, and keno;

(b) Any slot machines as defined in 15 U.S.C. 1171(a)(1) and electronic or electromechanical facsimiles of any game of chance;

(c) Any sports betting and parimutuel wagering including but not limited to wagering on horse racing, dog racing or jai alai; or

(d) Lotteries.

Section C appears to be quite clear that sports betting is a Class III activity. This position was cited by then-Florida Attorney Bill General McCollum in an opinion to then-Speaker of the Florida House, Marco Rubio.

An opinion that raises an interesting question for other states with tribal compacts because McCollum’s letter to Rubio was to answer:

“Where state law authorizes only certain Class III gaming activities, does the Indian Gaming Regulatory Act mandate that a state negotiate with a tribe over Class III gaming activities that are specifically prohibited by state law?”

How does that apply to NM sports betting?

In New Mexico’s case, the compact clearly identifies that the tribal entities are entitled to offer any Class III games under their compact, indeed Section 3 does not make reference to the requirement of the games being legal under state law.

This may, however, be a valid question. Is there an implied authorization for only Class III games, which are lawful under state law?

It is not entirely clear; however, McCollum, in his letter to Rubio stated:

The “IGRA thus makes it unlawful for Tribes to operate particular Class III games that State law completely and affirmatively prohibits. Courts have determined that a State therefore has no duty to negotiate with respect to such games…”

“Thus, it appears that it is the position of the Secretary of Interior that IGRA does not require a state that authorizes some, but not all, Class III gaming activities, to negotiate with a tribe over Class III gaming activities prohibited by state law.”

“It is, therefore, my opinion, in light of the greater weight of federal case law and the Department of the Interior’s interpretation of IGRA, that Class III gaming activities subject to mandatory negotiations between a state and an Indian tribe do not include those specifically prohibited by state law.”

It should be noted that attorney general opinions, are just that, opinions, and they are not binding law, but they may indicate the position of a state government towards the underlying subject matter.

It should further be noted that the situation that McCollum was asked to provide an opinion is not totally analogous to the situation in New Mexico, as New Mexico’s compact appears far more permissive than the Florida compact that McCollum was addressing.

What New Mexico state law says

New Mexico state law appears to consider sports wagering a fourth-degree felony under New Mexico Statutory section: 30-19-15:

It is “[u]nlawful to accept for profit anything of value to be transmitted or delivered for gambling; penalty.

A. It is unlawful for any person to, directly or indirectly, knowingly accept for a fee, property, salary or reward anything of value from another to be transmitted or delivered for gambling or pari-mutuel wagering on the results of a race, sporting event, contest or other game of skill or chance or any other unknown or contingent future event or occurrence whatsoever.

B. None of the provisions of this act shall be construed to prohibit the operation or continued operation of bingo programs presently conducted for charitable purposes.

C. Any person violating any of the provisions of this section is guilty of a fourth degree felony.”

Terina Salerno lawyer for USBookmaking says that:

“The Compact Negotiation Act, NMSA 11-13A-1, et seq., authorizes the state to negotiate a tribal-state class III gaming compact pursuant to the federal Indian Gaming Regulatory Act (“IGRA”). Thus class III gaming conducted pursuant to a Gaming Compact is lawful in the state. Nothing in the Compact Negotiation Act qualifies or limits the term ‘class III gaming.’ Federal regulations issued under IGRA classify sports betting as class III gaming. 25 C.F.R. § 502.4(c).

The 2015 Gaming Compact negotiated pursuant to the Compact Negotiation Act permits the Pueblo to “conduct, only on Indian Lands, subject to all of the terms and conditions of this Compact, any and all forms of Class III gaming.” Gaming Compact at Section 3(A)(emphasis added). The Gaming Compact, like the Compact Negotiation Act, does not qualify or limit the term ‘class III gaming.’

We would further note that the revenue-sharing provisions in the Gaming Compact are premised on the receipt by tribes of substantial exclusivity in the operation of class III gaming in the state. The idea that other persons must be allowed to offer a class III gaming activity in order for the tribes to offer it contradicts the substantial exclusivity bargained for in the Gaming Compact.

Blackjack, craps, and roulette are class III games offered in New Mexico only at tribal casinos. There is no distinction between those games under the Compact Negotiation Act or the Gaming Compact.”

What does all this mean for NM sports betting?

The Pueblo of Santa Ana tribe was able to successfully launch a sportsbook and it looks as though other tribes across the country may soon be able to launch sports betting if they have similarly drafted compacts.

In some states, including those with large tribal gaming interests, like Oklahoma, the compacts tend to specifically detail which games can be offered. However, there may be other compacts out there that allow for tribes to offer sports betting via the language used in the agreement.

Certainly, there is a possibility that other tribes in New Mexico will attempt to take advantage of the broad language of their compacts to offer sports betting, but they may be waiting to see how the launch at the Santa Ana goes. Walker of USBookmaking said “we’re in active negotiations in New Mexico,” as well as looking at potential opportunities elsewhere.

While for those looking for mobile options in New Mexico, the wait is going to be a bit longer, as the tribal compacts require:

“In the event that internet gaming is authorized within the State, the State and the Tribe agree that they will reopen good faith negotiations to evaluate the impact, if any, of internet gaming and consider adjustments to the Compact. The parties understand and agree that it is not possible to determine at this time what, if any, adjustments to the Compact would be necessary.”