Normally when the gaming world hears that federal legislation has been introduced, people cringe. The fear is that the federal government might screw up a system that otherwise works pretty well, most of the time.
With that said, there have been a few occasions in recent years where the federal government’s intervention could have been welcomed, at least by some in the gaming industry. One such area has been efforts to repeal the federal excise tax on sports betting handle.
More pressing, though, would be language to clarify the legality of mobile wagering under the Indian Gaming Regulatory Act, or IGRA.
New legislation to end the world’s problems?
On July 1, Representative Lou Correa of California and Representative John Katko of New York introduced bipartisan bill H.R. 4308 in the House.
The bill would:
remove Federal barriers regarding the offering of mobile wagers on Indian lands when the applicable State and Indian Tribe have reached an agreement, and for other purposes.
The legislation is likely to be welcomed by many across the country, particularly as a growing number of tribes are seeking to revisit their compacts in the wake of US sports betting expansion. But this is not the first rodeo for this type of bill.
Second act for federal legislation
Back in December 2019, New York Representative Anthony Brindisi introduced legislation with an identical purpose to this legislation.
Brindisi was defeated in the 2020 election by Claudia Tenney by 109 votes. His legislation to clarify the status of mobile wagering under IGRA did not gain significant traction in its initial effort in Congress.
The original bill, H.R. 5502, never made it out of committee. It intended to define remove potential barriers in IGRA related to the location of a mobile wager.
Who needs it this time
The new bill had been rumored for several weeks, but its sponsor had not been confirmed until July 1.
The bill is important to Katko with the pending expansion of gaming in the Empire State. Still, Correa as a sponsor might come as something of a surprise given what seems like tremendous uncertainty surrounding the expansion of gaming in California.
One storyline to watch with this bill is that tribal sports betting has undergone a substantial expansion from the time that H.R. 5502 was introduced.
A rare opportunity for bipartisanship?
Few subjects seem to bring Democrats and Republicans together quite like gambling legislation. Historically the two parties have united in imposing restrictions, but this time may be different.
The bill would represent an important step for the modernization of IGRA, which was passed in 1988. However, while the legislation is likely to pick up some additional supporters in the coming weeks, it is uncertain if there is sufficient interest or pressure to get the legislation passed in the current political climate.
Two very significant shadows cast
The introduction comes on the heels of significant questions regarding the validity of the new compact signed between Governor Ron DeSantis and the Seminole Tribe of Florida.
The new compact that would allow the Seminole Tribe to offer sports betting across the state via the internet has attracted a great deal of skepticism about whether such a grant is permissible under IGRA.
While the world awaits word from the Department of Interior to see if the compact will be approved, others already filed suit challenging the compact’s validity under federal law.
A lot to clear up
Much of the concern about the validity of the provision allowing mobile sports betting in the new Florida compact stems from a Ninth Circuit Court of Appeals case that found despite the location of servers, a bet was deemed to be placed “both where it was ‘initiated’ and where it was ‘received.’”
This federal legislation would effectively clear up a lot of uncertainty, provided there was an agreement between the state in question and the tribe, as is the case in Florida. The case from the Ninth Circuit did not involve Class III gaming, and therefore there was not a compact involved.
Why is California involved?
Perhaps the biggest surprise about the introduction of this legislation is that a representative from California introduced it. The Golden State is the biggest remaining unicorn amongst states for sports betting expansion.
The introduction of the federal bill follows news from May that a ballot question that would legalize sports betting at tribal casinos in California received enough signatures to make it onto the November 2022 ballot.
While the ballot initiative would only set the stage for in-person sports wagering, this federal legislation would clear the way for the state and tribes to negotiate online wagering in the future.
What to read into this federal legislation?
It remains uncertain just how much support amongst Congress this new legislation has.
One thing that could spur it to receive additional support would be if Interior rules that the pending Florida compact is incompatible with IGRA. Legislators could see that as a catalyst for modernizing IGRA.
However, this would also likely stir up opposition from various stakeholders, perhaps including sportsbook operators seeking a ballot initiative in Florida to open up the sports betting landscape to commercial competition.