The Seminole Tribe of Florida has sounded an alarm that likely will become familiar in the coming years: that their exclusivity is being compromised because of a new form of gambling entering their state.
The Seminoles issued a letter of complaint in response to a bill filed by legislator Dana Young that could pave the way for daily fantasy sports (DFS) to become legal in Florida.
Expect similar concerns about exclusivity infringement from other tribes across the country. Given that DFS, online gambling, iGaming, and sports gambling are all new possibilities for revenues for states, the historical process – tribes and states negotiating compacts – could soon be obsolete.
“There are a lot of aspects to the nature of compacts to be considered, not just in a legal context but in an economic context,” said Michael Pollock, managing director of Spectrum Gaming. “For example, in a land-based world, it’s very easy to define exclusivity. You draw it on a map.
“But that doesn’t work in an online and mobile world. You’ve got to address these other issues.”
Pollock, who is quick to point out that he’s “not a lawyer offering anything remotely approaching a legal opinion,” points out that when it comes to the effect of new forms of gambling on tribal-state relations, “there’s not just two sides, there’s multiple sides to these issues.”
Additionally, the whole nature of new forms of gaming and new forms of interaction between casinos and their potential customers is decisively different today compared to when compacts were first negotiated.
“So states and tribes have to look at what are their common interests,” he says. “And in most instances you’re going to find there’s a significant common interest in using new forms of gaming as a way to enhance older forms of gaming.” In other words, whether it’s online, mobile, DFS, sports betting, or iGaming, the goal will be how to leverage the new offerings to create employment and additional revenues for both states and tribes.
Pollock also cites another layer of complexity: the growing convergence of lotteries and land-based gaming, be it commercial or tribal. “When compacts were negotiated they were all in their indiviciaul silos. That’s not relevant any more, as both lotteries and commercial and tribal interests look to take advantage of new forms of gaming,” Pollock says. “They’re all facing the same core issue of an aging demographic and they’re trying to reach a new form of gaming.”
The topic of tribal-state relations will be among those covered in January at the National Council of Legislators from Gaming States meeting in Miami. Pollock warns of the complexity of dealing with the new technology. “There is no person with all the solutions,” he says “Every state has to customize its answer. There are very few off-the-shelf answers that can be copied and pasted from other states. It has to be customized to the type and size of the existing gaming industry in all aspects, including the tax rate.
“The goals are going to differ. In some it’s to maximize fiscal revenue, in other states it may be urban renewal or helping the pari-mutuel industry. You have to factor in what you have and what your goals are. We’ll consistently avoid suggesting a one-size-fits-all solution. There is none.”
“Fortunately, there’s going to be full employment for consultants.”
