A new speed bump for the daily fantasy sports industry has popped up in the past couple of months: Native American tribes who have gaming compacts with states.
Tribes and DFS, on the surface
About half the states in the country have some form of tribal gaming. While DFS hasn’t become a major point of contention for any tribe, so far, it does appear to be an issue that some are starting to think about in earnest. DFS was on tribes’ radars earlier this year, when DraftKings CEO Jason Robins gave the keynote at the Indian Country Online Congress in June.
To see how much of an impact tribal gaming interests and compacts could have, you don’t have to look further than Arizona in 2014, where a bill designed to legalize DFS didn’t pass because of tribal concerns.
The latest example of DFS and tribal issues
The most recent example is in Wisconsin, where trying to pass a law regarding daily fantasy sports could run into problems vis a vis the gaming compacts that 11 tribes have with the state.
The story indicated that the DFS industry has started lobbying in Wisconsin. From the Gazette Extra:
In Wisconsin, FanDuel and DraftKings must be careful that any law change they push won’t violate gaming compacts between state government and the tribes—compacts that give the tribes exclusive casino rights in exchange for paying state government $50.9 million in the fiscal year ending June 30.
One Wisconsin tribal representative said the fantasy sports giants would have to “thread the needle” and not change state law in a way that a judge would interpret as violating the compacts.
Far from the only state with possible tribal concerns
Tribes generally have not made their voices heard on the DFS front. But it appears that as bills pop up in states where tribes have gaming interests, they will be more likely to weigh in.
Much of how much tribes get involved is likely tied to the compacts and interests in individual states. But the issue is at least in the background in some jurisdictions.
One possible hot spot for DFS and tribal concerns is Florida, but how exactly the situation will shake out is unclear, at this point. At play are several factors: bills advanced to regulate the DFS industry, a reported federal grand jury investigation, and a new gaming compact with the Seminole tribe.
Gov. Rick Scott signed the deal with the tribe earlier this month, but it still needs to be approved by the legislature.
The Seminoles have not put forth a position, at least publicly, regarding DFS, but it’s certainly not a non-issue. From the Miami Herald, DFS is on the mind of Senate President Andy Gardiner:
Although the compact is silent as to the daily fantasy sport leagues, the decision opens the door to the prospect that the tribe’s payments cease if the state changes the law to allow for “Internet gaming involving wagering.” Gardiner told the Herald/Times in an interview Monday that he considers the move by some legislators to regulate fantasy sports leagues a slippery slope that will lead to Internet gaming in Florida.
Another observer in Florida said DFS “could be dragged into the process.”
What happens with DFS in Florida is an open question, but it at least appears, on the surface, that the Seminoles could be involved in some fashion.
A bill in Michigan was introduced in August to classify DFS as a game of skill under state law. That bill, however, hasn’t gotten much momentum, either before or after the increased government and media scrutiny the DFS industry attracted.
The legislation from Sen. Curtis Hertel Jr. is apparently held up, at least in part, by tribal concerns. From the Detroit News:
Sen. Rick Jones, the Grand Ledge Republican who chairs the committee, said he won’t act on the bills until Hertel gets assurances that legalizing online fantasy sports gambling won’t upset Native-American tribes.
Again, there’s been no chatter directly from the tribes in the state on DFS, but the intersection of the industry and tribal gaming is clearly a concern worth considering for lawmakers.
New York is another interesting spot for the intersection of tribes and DFS. It is obviously a hotbed for DFS, between the ongoing court case between the attorney general and DraftKings and FanDuel, as well as a legislative track that has opened up.
The Senecas are clearly interested in the DFS space, as indicated by the partnership signed with DraftDay in the spring. (That partnership is on hold while legal clarity is sought in the state.)
In the recent legal and legislative maneuvering that has taken place in the Empire State, Seneca Gaming has stayed quiet, although the state’s arrangement with the Senecas vis a vis DFS was briefly mentioned in a recent Assembly committee hearing.
California remains another big question mark. The issue of tribal gaming did not come up at the recent committee hearing in the state, but it’s hard to believe tribes won’t make their voices heard, eventually.
Tribes in the state have been a major part of discussions in the state about possibly allowing online poker.