The possibility that later in the year the U.S. Supreme Court will remove the ban on sports betting that currently overshadows all but four states has shown in recent weeks that gaming tribes are of many minds on the issue.
About the only thing tribes are united on is the necessity for tribes to have “a seat at the table.”
The court heard oral arguments in December and is expected to rule by summer on the case brought in 2011 by New Jersey (Christie v. NCAA) challenging the constitutionality of the 1992 Professional and Amateur Sports Protection Act (PASPA.) In anticipation, several states have introduced bills to regulate the practice should the justices rule that PASPA is unconstitutional.
The case was in fact generated by New Jersey, where voters in 2011 amended the state constitution to allow sports betting and the following year the legislature voted to allow casinos and racetracks to offer it.
This sparked a lawsuit by the NCAA, NFL, NBA, NHL and MLB — citing PASPA.
An industry working group that the National Indian Gaming Association formed several months to lobby states and gauge the opinion of gaming tribes has the goal of meeting with representatives of 250 tribes that operate 480 casinos.
According to Debbie Thundercloud, chief of staff of National Indian Gaming Association (NIGA,) quoted by Legal Sports Report, “There are some tribes that aren’t supportive and don’t think it’s the direction to go. Others are careful because they know the internet piece is connected. That may be the wave of the future, no matter what any of us wants or thinks at this point.”
The Indian Gaming Regulatory Act, which governs how tribes operates casinos, recognizes certain forms of gaming, but sports betting is not among them. That means it would not be seamless to incorporate the practice into the various tribes’ gaming compacts with the states. The one thing they fear is that states will try to incorporate it without consulting or involving them.
Most legal experts agree that tribes would need to amend current compacts to offer sports betting.
Sports betting could create competition for the tribes, who are usually guaranteed exclusivity in their states in return for paying states revenue sharing.
Although the biggest potential sports betting market is California, the move to legalize it in the Golden State has hit a rut in the form of a dispute between tribes and the state over how the state regulates its 75 card clubs—which tribes have been steadily forcing into a more constricted place ever since the state’s voters revised the constitution in 2000 to legalize Indian gaming. There are half the number of card clubs that existed when Indian gaming was legalized.
Currently six tribes have formed a coalition that intends to sue Governor Jerry Brown and the state to more strongly enforce the law that the tribes say the card rooms are flouting under a blind eye from such officials as Attorney General Xavier Becerra.
Brown oversees the California Gambling Control Commission and Becerra oversees the Bureau of Gambling Control. This division of responsibility is what prevents the state from strongly regulating card clubs, say some critics.
The coalition members met with Becerra last week to try to get what they want by negotiation.
Steve Stallings, chairman of California Nations Indian Gaming Association (CNIGA) which represents 31 gaming tribes, told Legal Sports Report “There’s an opportunity to meet with Becerra,” but indicated that he doesn’t expect much from the meeting.
They want enforcement of the required that the deal in such games as Black Jack and Poker rotates with the players, rather than allowing casinos to use a paid third-party proposition player (TPPP) to be dealer. No using TPPPs slows down the deal so much that casinos have a hard time remaining profitable since they are not allowed to make any profit off the games except for a per game charge.
The state constitution, say the tribes, gives them exclusivity to offer banked games. To prove their point, they are prepared to go to court as early as March.
Because they may be about to rumble with the state, the tribes may not be ready yet to cooperate with lawmakers on sports betting, and some are, in fact prepared to hold the issue hostage.
That would be especially true if any sports betting bill includes provisions for allowing card clubs to offer sports betting.
The current bill, sponsored by Rep. Adam Gray, would, if passed, ask voters to amend the state constitution. It would require a two-thirds vote by both chambers, and thus would be very easy for any group willing to stand fast to stop in its tracks. That bill doesn’t yet say who would be eligible to offer sports betting.
Says Stallings, “Tribes see this issue beyond the games currently being played in the card rooms. It’s a slippery slope kind of thing.”
But card clubs have political capital too, and 22,000 employees who work in them, and, although very small compared to Indian gaming, card clubs are a significant industry. So, they too could prevent a bill from being passed.
But at the same time, while tribes could do without sports betting very easily, the amount that could be generated for card clubs might be just enough to keep many of them profitable.
As one tribal official from Minnesota told Legal Sports Report, “Most tribes are not really excited about this. It’s not really profitable. Then there are the risk factors, technology and space issues. You still can make more with slot machines.”
Not all tribes have as much clout in their states as California’s tribes wield.
Not every tribal casino will offer sports betting because it might not be a good business decision, since it would require a significant investment in training and an entirely new technology for most tribal casinos. It will ultimately depend on market studies that will reach different conclusions depending on the tribe and the state, say industry experts.
Thundercloud concludes, “So many forms of internet gaming are moving ahead before many legal questions have been addressed. It is starting to be seen as a mechanism to drive people to the bricks and mortar sites. That’s more of where the business decisions are going to lie. Tribes can’t afford to be left behind.”
States with gaming tribes aren’t the only ones whose politics will be complicated if the Supreme Court rules in favor of New Jersey, especially if it rules that not only that state, but any state can offer sports betting.
Twenty states have filed amicus briefs supporting New Jersey. One of the states, Ohio, doesn’t have tribal casinos, but has a history of going to the voters to ratchet up gaming one step at a time.
In 1973 the state’s voters overwhelming approved of a state lottery. Two years later they voted by a lower margin, 54%-46% to authorize charitable bingo. In 2009, in a hotly contested election the state authorized casino resorts in the Buckeye state’s four largest cities Cincinnati, Cleveland, Columbus and Toledo. Then the governor allowed the state’s seven racetracks to deploy video lottery terminals. Together that has created a $564.7 million gaming industry.
If the Supreme Court acts this summer, Ohioans could be asked to expand gaming yet again.
