Gaming tribes in the U.S. are ambivalent towards the prospect of sports betting as various states have begun to study legalizing it, or have already done so. They like the additional revenues, but are leery of possible inroads that grasping it will give the states in diluting their existing exclusivity agreements.
A report last week by SportsHandle noted that tribes believe they already have an exclusive right to offer sports betting guaranteed to them by the gaming compacts. Opponents of this attitude point out that few compacts actually mention sports book, which only became legal less than a year ago when the Supreme Court lifted the federal ban on it.
The tribes that insist they already have a monopoly that includes sports betting have put the brakes on its legalization and given that tribal gaming is often one of the biggest lobbying groups in a state, lawmakers pay attention to their concerns. Bills in three states guarantee that monopoly.
Yet tribes question the value of, say, sports betting mobile apps, even though that technology is a natural progression for it and as has been shown in New Jersey is where the most profits on sports betting are being made. They are skeptical even when the apps are anchored on a tribal casino.
However, tribes in Minnesota are concerned that sports wagering aps won’t encourage foot traffic to their casinos.
John McCarthy, executive director of the Minnesota Indian Gambling Association told Sports Handle, “Our major concern is the mobile gambling. We’ve been fighting that forever. Why would you get up on a 20-below-zero-day and come out to the casino when you could just sit at home? We’re not opposed in any way to sports betting as an activity, but we are concerned about what mobile leads to.”
The association’s position is that any mobile gaming is a negative, and since many tribes depend on their casino to fund their government, provide services and give them a sense of pride, this is a major concern. They have the attitude that once the camel’s nose is under the tent, the tent will collapse.
Moreover, says McCarthy, the monetary benefits from sports betting are not that great comparatively. “We don’t think it’s a huge amenity.” He adds, “We’ve seen how it works, the first thing that starts to go is the live racing at racinos, then they go back to the legislature, and say, we’re not quite making it, we really need some machines, and then other groups come in and say, well, you’re bailing them out, I’m a farmer, so why don’t you bail me out?”
But this attitude isn’t shared by the Pequot and Mohegan tribes that operate two of the largest casinos in the world, in Connecticut. At a recent hearing the Mashantucket Pequot Tribal Nation, owner of Foxwoods Resorts Casino sent a written statement that said, “As we see it, the strongest opportunity for the state is in legalizing statewide iGaming, another activity that is currently operating for Connecticut residents in the black market today.” It added, “the tribes believe sports gambling, daily fantasy sports betting, and iGaming fall under the exclusivity agreement.”
Last week in Minnesota Rep. Pat Garofalo introduced a sports betting bill that gave tribes exclusivity, but only on the reservation—and no mobile apps. The state would get 0.5 percent on the total wagering handle, not the revenue. McCarthy believes that bar and restaurant owners will oppose it vehemently. And rather than share sports betting, the tribes will be content to sit and wait.
The Minnesota tribes insist that sports betting with mobile apps is a nonstarter. Last month the Minnesota Indian Gambling Association sent a letter to the legislature saying that members “oppose the expansion of off-reservation gambling, including the legalization of sports betting.” Period.
Washington’s tribes have the same stance. But in that state a tribal-only bill drew major opposition and many other interests insisted that they wanted to be included, such as taverns, card rooms, OTBs and racetracks.
Rep. Eric Pettigrew’s HB 1975 would limit sports betting to reservations. He declined to add racetracks, arguing that the state’s voters when they authorized tribal gaming had shown they only wanted gaming at designated places.
Pat LePley, president of the Washington Horsemen’s Benevolent and Protective Association told lawmakers, “If we’re left behind and not allowed to add our toolbox as tribes are trying to do here, you won’t fatally kill us right away, but you’ll wound us so badly, that we’re going to die and go away pretty soon.”
Although many tribes do claim exclusivity of all forms of gaming, their argument is complicated by the fact that no existing compacts address sports betting by name. They argue that “sports betting” is embraced by the existing language, even if not named explicitly.
As with the Minnesota tribes, the Washington gaming tribes also worry about mobile apps undercutting their efforts to attract visitors to their brick and mortar properties. Washington is one of the largest tribal gaming states, after Oklahoma, California, and Minnesota.
In an interview with Sports Handle, Jerry Allen, a tribal elder of the Jamestown S’Klallam Tribe in Washington, said, “We want the traffic it generates. The Nevada and New Jersey sports betting model still works, but at some time you have to drive people into your brick and mortars. Making sports betting too easy by putting it in convenience stores and the like, as Oregon wants to do, and put into the same kiosks with their daily keno game creates a different problem.”
This creates the dynamic of tribes that have been helped by the triumph of technology in the electronic gaming industry, an advance that made Washington’s Indian casino industry a $2 billion business. Yet they are fearful of the newest advance: the mobile gaming app. “There are economic differences between the tribal casinos on the I-5 corridor near Seattle and Portland, Ore. and the smaller tribes, such as ours on the Olympic Peninsula,” says Allen.
Even within his state of Washington, “there’s not a consensus at all” in how to address sport book among gaming tribes. “It has to do with compacts and politics.” He adds, “In Washington we only have 29 tribes, but some of tribes are more conservative than others. It makes no sense to offer up a bill that doesn’t make sports betting accessible to everyone through mobile betting. It’s clear the public doesn’t want to get out of their own living rooms every time they make a bet.”
Last month a tribal-only sports book bill was introduced that authorizes sports betting on the reservation, in the casino and with kiosks at bars and alcohol selling venues. Arizona’s existing tribal state gaming compacts appear to limit how much can be offered outside of the reservation.
Tribal gaming is governed by the 1988 Indian Gaming Regulatory Act (IGRA) which includes this bedrock principle: “Indian tribes have the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity.”
California is an entirely different affair in a state that is the size of a medium-sized nation. There are 66 tribal casinos and that not all of them agree about this issue. Moreover any change that allows sports betting will require renegotiating existing compacts. Complicating things is the insistence by the state’s racetracks, who want to offer sports book. Allen, who has long watched the California tribal gaming scene, told Sports Handle, “When the tribes have a major revenue sharing agreement with the state, they will help drive the decision on sports betting.”
Because the Golden State’s tribes are polarized, the state may take a while to agree ion sports gaming.
The final reason why tribes are reluctant to get into the issue is because there’s not that much money to tap. Allen told Sports Handle, “We want the traffic is generates. The Nevada and New Jersey sports betting model still works, but at some time you have to drive people into your brick and mortars.” He concluded, “You have to strike a balance between responsible gambling and proper access,” Allen said.
