New Mexico’s gaming tribes are skeptical about a proposal that would expand gaming for the state’s five racetracks, end the tribal monopoly on some forms of gaming and end their revenue sharing with the state. It would also legalize online gaming and sports betting.
The proposal comes from a consortium of commercial racinos who want to revive the gaming economy by opening the state to Las Vegas style gaming.
If adopted, New Mexico would become the first Western state to legalize online gaming and the fourth to legalize sportsbook.
Tribal leaders testified October 19 before a legislative committee. They fear that completely upending the gaming market would harm their ability to fund enterprises on the reservation and serve their communities.
Sandia Pueblo Governor Stuart Paisano told lawmakers, “This proposed legislation presents not only a renewed challenge to our economic security but a reckless attempt to expand private wealth at the expense of our ability to provide essential government services.”
The Sandia Resort & Casino near Albuquerque remains closed by the Covid-19 pandemic. Paisano noted that the basis of the pueblo’s economy is the casino and that the tribe is apprehensive how it will continue to fund operations.
Until the testimony tribes have been silent about the proposal, which proponents, led by Sunland Park Racetrack & Casinos, call the “Gaming Industry Recovery Act” and which would, they say, allow New Mexico to “Join the ‘big leagues’ in the gaming world.” It would also, says the proposal, “eliminate any question of legality of types of gaming on New Mexico Tribal Lands.”
It would also allow lodging and food comps as well as serving alcohol to patrons while they play, things that are common in Nevada.
Tribal leaders say no one from the five racetrack coalition approached them until just before the commercial gaming interests introduced the bill to state’s legislative finance committee on October 1.
The racetracks say expanding gaming would give a shot in the arm to a flagging tourist industry and preserve the horseracing industry. It would also, they say, allow the tribes to keep $70 million they would, under the existing compacts, continue to pay the state in revenue sharing. This they could spend on tribal programs, they say.
Legislative staff disagrees with that estimate. They wrote, “The draft proposal is likely to lower total state revenues,” adding, “The gain in taxes from expanded gaming for the five existing racetrack casinos is unlikely to exceed the nearly $80 million in annual tribal revenue sharing payments.”
The racinos and tribal casinos have seen revenues decline in recent years. A report last year indicated a 10 percent decline from 2012-2018 in tribal revenues paid to the state. Tribes pay between 2 to 10 percent of their adjusted annual net. Racinos pay 26 percent of slot revenues. They do not have other games. That same report attributed some of the loss to illegal online gaming.
Scott Scanland, a lobbyist whose New Mexico Government Affairs is pushing the proposal has said “It’s a proposal rather than a bill at this point.”
The group commissioned a study by Las Vegas based Union Gaming that looked at the possibilities of unleashing online gaming and sports betting on the New Mexico market.
It concluded that if “significant capital investment” is made on the racetracks, and regulatory changes are made that “gaming revenue is expected to reach $464 million.”
A dozen gaming tribes have been wary of making these changes. Several have sent letters voicing their concerns to Governor Michelle Lujan Grisham, Santa Clara Pueblo Gov. J. Michael Chavarria said last week.
The governor’s spokeswoman told the Associated Press, “The governor has a very deep respect for the tribal gaming compacts and their importance to the sovereign nations within our state.”
Rep. Antonio Maestas, who chairs the legislative economic and rural development committee, called for finding out more about how the proposal might put funds into the general fund. “This is definitely a topic that is deserving of a conversation,” he said.
