Tribal casinos dominate the gambling industries in several states, notably California,
New York, Oklahoma, Arizona, New Mexico, Connecticut, Washington, Minnesota, Michigan, Wisconsin, Oregon, Alabama and Florida.
Enacting sports betting legislation in states with commercial casinos, racetracks, card rooms, lotteries and other forms of gambling taxed and regulated by the states is relatively simple.
But crafting legislation in states with tribal government gambling can be complicated.
Tribes operate casinos under the Indian Gaming Regulatory Act (IGRA), which limits types of games tribes can operate on Indian lands. Permissible games are defined by tribal-state regulatory agreements, or compacts, required under IGRA.
Compact terms vary dramatically from one state to another. Compacts in many states provide tribes with casino exclusivity in exchange for giving the state a share of gambling revenues.
To operate sports books, tribes and states need to negotiate amendments to the compacts, an often politically problematic process.
States seeking to extend sports betting to lotteries and commercial vendors risk violating exclusivity provisions in the tribal-state compacts and losing their share of tribal casino revenues.
And states seeking tax revenues from sports gambling are confronted with federal law that generally prohibits taxation of tribal government gambling revenues.
Adding to the confusion is the fact IGRA limits gambling to Indian trust lands.
There remains legal uncertainty over the ability of tribes to accept wagers from outside reservation boundaries. Sports betting bills in several states include mobile and internet provisions.
The Wire Act and Unlawful Internet Gaming Enforcement Act (UIGEA) prohibit the transmission of wagers across state lines. But tribes are exempt from UIGEA.
If compacted sports betting is declared legal on tribal reservations in several states, they can share markets.
Many tribes are contemplating operating sports betting as a commercial venture, taxed and regulated by the states, rather than gambling under IGRA and federal Indian law.
Sports betting bills in New York, Louisiana, Michigan, Oklahoma, Connecticut and elsewhere were blocked at the 11th hour over the legal complexities involved with tribal gambling.
Some trade industry writers blame tribes for the inability to get legislation through state houses.
But in most cases it was the fault of legislators uninformed about IGRA and federal Indian law.
“It’s the ignorance of those who sit in state legislatures,” Thundercloud says.
“They just don’t understand the compacts they’ve entered into with tribes and the terms and conditions of those compacts.”
“Legislators don’t talk to tribes until the very end,” Valandra says.
“Tribes do have leverage because in many of the states tribes are making payments pursuant to the compacts. When states realize what they have to lose, things get put on hold.
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