Many tribes fear they will be left out of the mix to offer sports gaming if the U.S. Supreme Court throws out a 1992 federal law banning full-fledged sports betting outside Nevada.
That theme emerged Friday in the final educational session at the 2018 National Indian Gaming Association Tradeshow & Convention in Las Vegas. The commercial and tribal gaming industry is waiting for the Supreme Court to hand down its decision on a New Jersey case challenging the 1992 Professional and Amateur Sports Protection Act by the time the current court term ends in June.
With that backdrop, the National Indian Gaming Association, an intertribal association of 184 federally recognized tribes, announced that it passed a resolution at their convention this week calling on Congress to repeal PASPA and pass legislation allowing tribes to offer sports betting at both tribal casinos and via mobile and online, as they face increased competition from commercial casinos.
The resolution, which covers state governments as well, said lawmakers should fully recognize and protect Indian gaming operations and satisfy the NIGA Principles of Sovereignty, and emphasized that the tribal rights outlined in the Indian Gaming Regulatory Act (IGRA) and existing tribal-state gaming compacts must also be protected. The resolution specifies that customers would be able to access tribal sports betting sites in states where it’s legal, and that sports betting revenues would not be subject to taxation.
The consensus that PASPA will be overturned in some form stems largely from the type of questions asked by Supreme Court justices at the December hearing dealing with the case, according to Daniel Wallach, one of the panelists and a sports and gaming attorney with South Florida firm Becker & Poliakoff.
Aurene Martin, president of Spirit Rock Consulting and a member of the Bad River Band of Lake Superior Chippewa, said a complete repeal means tribes would act “on a state-by-state basis” within their political jurisdictions. In the event, they plan to negotiate with states through the legislative process and amend existing compacts in states that allow sports betting.
“That is the best-case scenario… with tribes that have a lot of political influence, that could be a good thing,” Martin said. “The more dangerous possibility for tribes, in terms of negative implications, is a partial repeal of PASPA, which would apply to states only.”
PASPA is structured with two sections that are important to tribes, Martin said. There is an authorization or limitation on governmental entities that can operate sports wagering which tribal governments are part of, and a second provision that prohibits sports wagering on Indian lands as defined by the 1988 IGRA act.
“Depending on the wording on the case and how it comes out (from the Supreme Court), it could end up that the prohibition against the states is repealed but the prohibition against the tribes remains,” Martin said. “I think that’s unlikely, but it’s definitely a possibility. We have seen some unusual things happen in Indian country in the last ten to fifteen years. It’s conceivable the Supreme Court could do this.”
That scenario, Martin said, would leave the tribes without the ability to offer sports wagering and make it difficult to get partners to get a federal legislative framework.
“The federal solution is probably the best solution because it presents the best opportunity for tribes across the country to be treated fairly across the board,” Martin said. “On the state level, you are left to your own devices in trying to deal with state jurisdiction… in some cases the tribes are in a very good situation and may be better off than with a federal framework, but there are a lot of tribes that (would be) worse off.”
Wallach said it was important that tribes formulate a clear position, and imperative that they decide what approach works best for them. They may be better off aligning themselves with professional sports leagues and others who favor a federal legislative approach because of the inconveniences and burdens created by compact requirements, he said.
“At some level, the tribes are at an economic disadvantage because of the compact requirements under IGRA… if some of the bills are passed, commercial casinos will be able to hit the ground running while the vast majority of tribes that don’t have sports betting in their compacts are going to be delayed by the compacting process,” Wallach said.
Steve Bodmer, general counsel of the Pechanga Indian Reservation in Southern California, said a constitutional amendment is required to expand gaming in California, and there’s going to a need for new compacts. People have been speculating for years that PASPA was likely to be weakened and overturned, he said; the Supreme Court only sped up the process.
“New Jersey is going to be ready to go in a week (if) the Supreme Court makes a favorable decision. Tribes can’t just flip a switch, because this activity will be taking place on tribal lands.”
Federal law won’t allow tribes to act without a Class 2 gaming compact that specifically authorizes that, Bodmer said. The process takes time, and tribes should push state lawmakers to make sure that legislation doesn’t go forward until tribes have equal footing with commercial casinos. Sports betting could bump revenues by 3 to 5 percent for tribes, he said.
“Make sure you don’t stumble out of the gate because laws apply to you that don’t apply to commercial casinos,” Bodmer said.
Wallach said there are about twenty states with bills in play, and said he was surprised only West Virginia has had a bill approved and signed into law by the governor. A key feature of many of the bills are protections or preferences for land-based casinos and racetracks; the majority also have a mobile and online component, he said.
“That presents a unique challenge to the Indian Nation under IGRA because (gaming) is required to be confined to the reservation,” Wallach said. “So a tribe’s ability to participate in the mobile and online environment may be somewhat circumspect under IGRA.
“Many of the bills grant entitlements to racetracks and casinos to partner with online sports betting operators. That may not be an environment that Native American tribes will be able to participate in and could put them further behind the eight ball competitively.”
One of the reasons many sports betting bills have not crossed the finish line, he said, are the exclusivity provisions in at least ten states’ bills for tribes to see payments if there is any expansion of gambling.
Bodmer said anytime there’s an expansion of gaming, tribes are concerned that it be done correctly and respects their sovereignty, the amount of money they have invested, and what they can do with the revenue in areas where there isn’t a tax base to draw from like governmental entities.
While people are waiting for the Supreme Court to hand down their ruling, Bodmer said it’s a good time for tribes to seek amendments to their state’s compacts and to solicit commercial casinos for support.
“A lot of folks in the commercial industry don’t recognize that tribal gaming revenue goes for elder care programs and fire departments and all of the things that matter,” Bodmer said. “It’s not going to a CEO for a new yacht. It is going to preserve culture and take care of tribal members. There is a lot at stake and it (should be) be treated that way if there is anything that looks to impose on tribes in managing gaming enterprises.”
Deborah Skenandore-Thundercloud, chief of staff for NIGA, said the larger tribes have better opportunities, but tribes “would be burying their heads in the sand” if they didn’t realize internet gaming is the next step in the evolution.
That’s why it’s important that the federal government spend money on expanding internet access to Indian country so smaller rural tribes can compete with larger markets, she said.
“We think (sports betting) will help attract customers for other activities beyond sports, and that there is an opportunity for everyone,” Skenandore-Thundercloud said.
