Although the Mississippi Band of Choctaw Indians embraced sports betting at Pearl River Resort not long after the U.S. Supreme Court lifted the federal ban on it in May, most tribes are approaching it with caution.
At this point, the only other tribal casino to offer the service is Santa Ana Pueblo near Albuquerque, New Mexico, which operates the Santa Ana Star Casino Hotel. It began taking sports bets in October. The thing the two tribes have in common is they didn’t have to negotiate changes to existing tribal state gaming compacts.
The Pearl River Resort was strategically well placed to take advantage of betting on sports. Neal Atkinson, director of gaming for the tribe, told the AP, “We are basically two hours from Tuscaloosa, Alabama, and then, we are just an hour from Mississippi State. We have Ole Miss just to the north of that, and we have Southern Miss — they’re not SEC, but they are a player. We are not that far from Louisiana.”
Although most tribes were initially enthusiastic about sports betting, most found that they stand to gain a very small profit, in return for the need to deal with their states on touchy issues like revenue sharing and maintaining tribal monopolies on casino gaming in some cases.
Tribal gaming, from its modest beginnings 30 years ago, now accounts for a $32.4 billion share of the U.S. gaming market. With 240 tribes operating 475 casinos. It helps fund tribal services such as housing and medical care.
Although tribes with only Class II gaming don’t have to deal with their state governments, tribes wanting to expand into the much more profitable Class III gaming are usually required to negotiate gaming compacts with their states. That often requires trading revenue sharing in return for exclusivity of Las Vegas style gaming.
Adding a sports betting component would, in most cases, require reopening negotiations on tribal state gaming compacts. Some tribes maintain that sports betting is already covered by existing compacts, even though only in Nevada has sports book been offered at commercial casinos before this year.
According to National Indian Gaming Commission Chairman Jonodev Osceola Chaudhuri, “There’s a broad spectrum in Indian Country covering two extremes: Tribal nations that would not benefit at all, and on the other end, tribal nations that would significantly benefit. Those are largely business decisions that each tribe will have to make given its own economic landscape and its unique market realities.”
Adding complexity to the issue is that some members of Congress want to take another crack at regulating sports betting now that the Supreme Court has struck down the 1992 attempt to ban it. Also insisting on insinuating themselves into the conversation are sports leagues, who have so far unsuccessfully tried to lobby states into giving them a percentage of sports betting profits as an “integrity fee.”
Not that there is that much of a profit to dip into. In Nevada, for example, sports book accounts for 2.4 percent of all gaming revenues. Slots and gaming tables are far more profitable. Taking the chance at upsetting the existing order to tap into that small revenue source is a big decision for a gaming tribe.
California—the mother lode of sports gaming in the U.S.— would require amending the state constitution for the many gaming tribes to offer it. Since the tribes currently have a monopoly on Las Vegas style gaming, this is a Pandora’s box most are balking at opening.
As Washington State Gambling Commissioner Chris Stearns told the AP gaming tribes must weigh the pros and cons of entering into sports betting: “So, any time there’s a new gambling product, and you ask the state to authorize it, there is a risk the state will say ‘Sure, but it is going to cost you.’ ”
Tribes have a total monopoly on gaming in Washington and any change would require either a vote of the people or a 60 percent vote by both houses of the legislature.
In South Dakota it is a mix of commercial and tribal gaming that would require a constitutional amendment to add sports betting. There is a move to gather enough signatures to put such an amendment to the voters in 2020. If that happens, the door would open for the state’s tribes as well.
