The SBC Summit North America recently concluded at the Meadowlands Exposition Center in Secaucus, New Jersey. Among the highlights was a panel led by Soaring Eagle Casino Chief Executive Officer Melinda Coffin titled, “Tribal-led iGaming−Is Michigan the Blueprint for Online Casinos?”
The panel also included Michigan Gaming Control Board Deputy Director David Murley, Firekeepers Casino Hotel Vice President of Sports and Online Gaming Jim Wise, Aspire Global U.S. Managing Director Quency Raven and Playtech Chief Commercial Officer Marcus Yoder. They all agreed, Michigan is the poster child for iGaming harmony between the tribes, government and operators.
Murley said, “State Rep. Brandt Iden, now with Sportradar, was the one who saw a possibility here when everyone else was laughing at him. That Michigan would launch iGaming and internet sports betting and involve the commercial casinos as well as the tribal casinos. It took a lot of work, and there was a veto along the way, but what Michigan did was go out of its way to make sure everyone’s interests were aligned. This is not a matter of the tribes vs. commercial casinos or casinos against the revenue that might come from our lottery programs. We had to find a way to get the various interests on the same page.”
That meant treating the state’s tribes as a single entity, state government’s equal. Murley stated, “One lesson we learned is that tribes are sovereign governments, they are the equivalent of the state. One does not get to tell the other what to do. It started with tribes presenting a united front, that this was something they were interested in, and it involved a compromise on revenue with some people paying more taxes than they originally wished they would, but not as high as some other states. And it also involved the state realizing it can’t treat a tribal casino as it does a commercial casino. It was going to take sensitivity to the tribes and their sovereignty in figuring out a way it was going to work for everyone involved.”
A major advantage, as Wise pointed out, was that even before negotiations began, “There was a pre-established positivity between the tribe and the state that maybe doesn’t exist to that degree in other states. But that created a great kind of groundwork to build upon so that we could go forward.”
Murley pointed out that tribes select their own platform provider, which “really puts the regulatory emphasis on the platform provider. The tribe is the government, they have the license, they essentially sublease the platform provider and the state looks to the platform provider to solve issues or if something goes wrong. We keep the tribe informed, but put our emphasis on holding the platform provider accountable. That way we allow tribes and the state to continue their cordial relationship.”
Regarding operators, Wise noted tribes have several factors to consider in deciding if they’ll form partnerships or keep everything in-house. He said, “For tribes in a state that has not yet established iGaming, you need to figure out what is going to work for you. Is your tribal council going to be comfortable giving away your brand to someone else? Do you have the wherewithal to hire a staff and manage what is an extensive process on your own? We were able to do that, but it is a lot of work. In some cases, it might be better to simply sign the best deal you possibly can and hand off that business to someone else.”
Murley concluded, “We knew the pie would be big. We didn’t know how big it would be. There’s enough to go around for everybody. The state gets most of the money, the city of Detroit gets a portion and then we actually gave the tribes a percentage of the tax revenue. It makes them more of a partner in the whole operation.”
He added, “Even for those tribes that might be getting relative crumbs from their platform provider, the tribes can sometimes make more from their cut of the tax revenue than they do from the profits of online gaming. Anyone considering doing this has to figure out how the tribes can get the revenue source through the tax payments in addition to iGaming.”
