Tribal gaming and the implementation of sports betting

With the repeal of PASPA Sports Betting has been legalized by the Supreme Court at a state level, Jake Patel explores how the US government will work with tribal establishments to find the best form of implementation.

The Indian gaming communities are gearing up for sports betting, but not everyone in the Indian gaming community is pleased with the Supreme Court's decision to legalize the activity.

Rhode Island, Delaware, and New Jersey have legalized Sports Betting and four other states have put forward legislation to begin the process: Mississippi, New York, Pennsylvania, and West Virginia. The rest of the states are still weighing their options but with the prospect of additional taxes in the state coffers, they are likely to move quickly.

The changes follow the US Supreme Courts decision to lift the federal law that bans gambling on sports such as football, basketball, and baseball, as outlined by the Professional and Amateur Sports Profession Act (PASPA). It is now up to the individual states to give the go-ahead on Sports Betting and decide whether or not to legalize it.

This raises a completely new question, however: how will this the effect the exclusivity of Native American gambling? 

As the Native American community operate under completely separate rules from the rest of the states and, as they have their own rules and regulations, there is nothing to stop them from making sports betting available in their venues before the rest of the states.

At the moment, two Native American communities have expressed an interest in implementing sports betting in their venues, the Oneida Indian nation in New York and the Choctaw Indians in Mississippi.

In a statement issued in early June, the Oneidas Vice President for Communications, Joel Barkin, said: "The nation has made preparations to offer sports betting at its venues throughout the Oneida reservation and we will be putting those plans into operation in the near future."

At the end of May, it was announced that amendments were made to the Choctaw Gaming Commission Regulations. Two new sections were added with regulations on governing sports pool, pari-mutuel wagering, and race books.

Both of these developments indicate that the Indian gaming communities are gearing up for sports betting, but not everyone in the community is pleased with the Supreme Court’s decision to legalize the activity.

Roughly 250 Native American tribes offer gambling at venues and some have signed agreements with state governments giving them the exclusive right to do so in exchanges for a share of the tribes’ revenue from gambling activity.

If a state chooses to legalize gambling across all establishments, this would essentially strip the Indian gaming community in that state of the exclusive right to offer sports betting.

Essentially, it would violate the agreements that have been signed

Prior to the Supreme Court’s decision, the National Indian Gaming Association (NIGA) put together a resolution with nine "asks" in exchange for the support of legalizing sports betting.

Two of the most interesting asks is that tribal government sports betting revenues will not be subject to taxation, and that tribal rights under the Indian gaming regulatory act and existing tribal-state gaming compacts must be protected.

Both of these asks demonstrate that the NIGA is aware of just how lucrative sports betting can be for the Indian gaming community but also suggests that the legalization of sports betting has the potential to upset pre-existing agreements between states and Indian gaming communities.

According to the NIGA, the gross gaming revenue for Indian gaming establishments in 2016 exceeded $3bn, which gives tribes more than enough grounds to be involved in any discussion on how the legalization of sports betting will affect pre-existing exclusivity deals.

Jason Giles, Executive Director of the National Indian Gaming Association (NIGA), spoke to Gambling Insider about what the implementation of sports betting could mean for Indian gaming.

On the issue of tribes losing out on exclusivity, Giles said that there is a small risk of this happening and that as tribes are sovereign governments within the states they are in a position to deal with the issue as things develop.

"For example, in a state like California tribes have exclusivity. If the state wants to break that on their own then the tribes are in a strong position. They don’t have to pay the profit-sharing to the state if they break the exclusivity agreement," said Giles.

"It is disrespectful to the tribes and the government relationship they have established. Also, it would be a violation of the state and tribal compacts that they negotiated, so the risk is small."

There have also been concerns that some Indian establishments may see a drop in the revenue if states were to legalize sports betting.

Giles dismissed this fear, however

"The tribal casinos are very well established they know' their customer base better than anyone. With the new form of gaming being introduced, tribes are most likely going to enhance their revenue and their customer base."

As it stands, only the Choctaw tribe in Mississippi has solid plans in place to introduce sports betting.
Giles estimates that the tribe will fully implement sports betting in "three to six months."

"I think, ultimately, if sports betting is legal in this country, all tribal establishments will want to have sports betting as an entertainment option," Giles added. "Our research is showing sports betting could take a year or so if not two or three years to get implemented in various states."

At the moment, NIGA does not have any statistics on how many tribal establishments show an interest in adopting sports betting.
In terms of introducing sports betting in Indian-owned establishments, it essentially comes down to a case-by-case and state-by-state basis, as each state will have to work with the tribes to ensure no agreements are being violated.

"You look at a state again like California that needs to amend their constitution to even consider legalizing sports betting and then the tribes have exclusivity out there. The tribes and states need to work on an approach on how they want to do it."