The gaming industry has grown and matured over the years. One consequence has been an increase in complications in negotiating compacts between states and Native American tribes.
“For many years it has been evolving and changing,” long-time gaming lawyer Judith Shapiro said, as she led a Tuesday G2E session on tribal-state relations. “In the early compact years we were feeling our way around.”
The 1998 Indian Gaming Regulatory Act required tribes to negotiate with states before offering Class III (traditional Vegas-style) slots. But since then, an increase in commercial gaming has brought more competition, making traditional state bargaining chips such as “exclusivity” less available.
“I don’t think anyone imaged what effect IGRA would have 30 years later,” said Larry Rosenthal, former NIGC chief of staff and now a consultant.
Rosenthal cited the recent negotiations between the Seminole Tribe of Florida and the state of Florida. In December 2015, the two parties had agreed on a seven-year, $3 billion compact. But state legislators, some from districts with racetracks and racetrack casinos, intervened, stopping the compact’s approval.
“Parochial interests led to a stalemate in the legislature, and unfortunately that’s what we’re going to start seeing elsewhere,” Rosenthal said. “Now outside issues have taken over and I fear they’re something tribes will have to deal with.
Rosenthal also gave the example of Michigan, which has a 1993 compact up for renewal.
“Now the state has come to the table but because of the maturation of gaming in Michigan, there isn’t much the state can offer to the tribes at this point,” he said. “It has led to a point where it’s hard to see how they can get together to reach a compact.
“Around the country we’re seeing more complicated negotiations.”
Other factors include new forms of gambling that could tread on tribes’ exclusivity, such as sports betting, internet gaming, and daily fantasy sports.
Scott Crowell, who has represented tribal governments for about three decades, added, “The understory of this panel is trying to answer the heavy question, ‘What leverage, if any, do tribes have?’”
Since IGRA took effect, about 650 compacts have been sent to the U.S. Department of Interior for approval. Most of the early compacts skated through, but now more agreements are being rejected because a tribe is not gaining a benefit, or because factors unrelated to gaming, such as land rights and fishing rights, are being slid into agreements – which violates IGRA.
Kevin Washburn, who served as the Assistant Secretary for Indian Affairs in the Obama Administration in Washington, D.C., from 2012 through 2015, shared viewpoints from the Department of Interior, including the challenges from the provision that each compact has a 45-day deadline. “And 45 days of government time is like three days in regular person’s time.
Washburn’s perspective: “They’re sitting there with their catcher’s mitt on and they’ve got only 45 days and they’re a terrific staff but they also have revenue allocation plans to approve and other responsibilities.”
Washburn, now at the University of New Mexico School of Law, passed out a research paper that spelled out recurring issues in Indian gaming compact approval, including further examples of problems with terms not germane to Indian gaming, such as tribes’ water and land use.
“But there’s a down side for tribe in that things are taken off the table that the tribe can’t use to negotiate,” he said.
