Tribal Casinos may lead the way for online sports betting

In multiple states, Native American tribes are emerging as key players in legislative debates over whether online casino sports betting will be adopted. The tribes are divided over the strategy, with some supporting legislation as long as it promises their operations a monopoly while others oppose the idea because, they believe, it will threaten their casinos and will threaten revenues that they need to fund essential services for their members. 

There’s a lot yet to be worked out regarding the future of sports betting in the United States but it’s clear that the gaming tribes will be a central part of the conversation.

Concerns

Tribes are fighting sports betting or taking a go-slow approach in many states because the are worried that old agreements, in which they received rights to offer various forms of gambling and operate casinos, might be reopened. The tribes argue that such discussions could threaten the exclusive rights under which they have been operating till now.

Bill Pascrell III, a lobbyist for numerous gambling operators who are seeking legalized sports betting across the country acknowledges that the new companies will have to take the tribes’ interest into consideration.  "The tribes have a major-league seat at the table," he said.  

Since May 2018, six states have joined Nevada in allowing sports gambling. The expansion in sports betting occurred after the U.S. Supreme Court ruled that states could legalize sports betting in their own jurisdictions. In addition to those 7 states, legalization of one form or another is being considered in more than 20 other states.

Minnesota

Minnesota is an example of a state where sports betting would have a good chance of becoming legal except for the fact that the state's politically powerful tribes oppose it. A bill, introduced by Senate Tax Committee Chairman Roger Chamberlain, is seeking to legalize sports betting. The bill cleared its first hurdle in March when it passed a vital committee vote in the state Senate. But that's likely to be as far as it goes.

Chamberlain says that state residents could wager as much as $2 to $3 billion annually but that isn’t convincing Minnesota’s casino-owning tribes to support the measure. The tribes have given millions in campaign donations to anti-sports betting initiatives and candidates and are doing everything that they can to stall  -- and hopefully kill – the bill. The tribes are especially concerned about the possibility that mobile sports betting will be legalized. They fear that such a move would give potential visitors to their casinos an incentive to stay at home and bet from the comfort of their living room armchairs. 

Testifying before the Minnesota Senate committee, John McCarthy, executive director of the Minnesota Indian Gaming Association said that operating casinos "is the only successful economic development tool the tribes have ever had." Widening sports betting and internet gambling could threaten those casinos.

Chamberlain has already admitted that it will be virtually impossible for the measure to succeed without backing from the tribes.

"They've got momentum and are telling folks they don't want it to go anywhere," he said. "I think that's a little unfair, but we're willing to talk with them and protect their interests."

Opposition in Texas and other Tribal Gaming States

The story repeats itself in Texas where the only sports betting bill introduced is almost certainly headed to the dustbin. The bill was introduced by Rep. Eddie Lucio, a Democrat. The Democratic party is the minority party in Texas, so it would be hard enough for the party to get a controversial bill passed. 

In addition to political intrigues, tribal casino operators from neighboring  Louisiana and Oklahoma have donated millions to keep gambling out of Texas so that Texas gamers will continue to cross the state border for their gambling entertainment. The Choctaw and the Chickasaw nations, two Oklahoma tribes, have given more than $5 million to Texas officeholders and candidates since 2006.

A similar story is playing out in Washington state and in Arizona where tribal opposition or ambivalence is making it unlikely that sports betting legislation could pass.

In many of the states where tribal gambling is prevalent, there’s simply  no effort to introduce sports betting bills. That’s the case in Florida, California and Oklahoma which are home to politically influential tribes that have extensive casino operations running.

Support

In other states, however, gaming tribes are actually at the forefront of the move to legislate sports betting. In Connecticut, the Mohegan and Mashantucket Pequot tribes are working with the governor’s office to add sportsbooks to their existing casinos. This isn’t surprising because those tribes have exclusive rights to casino gambling throughout the state. New Mexico is another state where tribal casinos are pushing sports betting, even explicit permission to run such an operation has not yet been granted by the state.

The Eastern Band of Cherokee Indians of North Carolina is waiting to see whether a bill will pass that will allow the tribe to offer betting on sports and horse races at its casino near Great Smoky Mountains National Park. The tribe has made it clear that it expects the bill to pass without any substantial concessions on its part.

Collaboration

Anti-gambling groups, including conservative religious groups, are opposed to any form of expanded gambling but that doesn’t seem to have any impact on the passage or non-passage of sports betting laws. In North Carolina Sen. Jim Davis, the sponsor of that state’s gaming bill, lauded the Cherokee tribe for its efforts to build casinos and bring jobs to an otherwise distressed portion of the state. "They've been incredibly good stewards of the revenue, and it's transforming that community," he said.

Throughout the United States, native American tribes have learned how to play the game. They maximize access to state lawmakers through political contributions – an Associated Press analysis of data compiled by the National Institute on Money in Politics shows that tribal governments have contributed more than $114 million to political committees and state-level candidates over the past decade.

In Arizona, the tribes are the key players in the legalization debate but are on opposite sides. The Navajo Nation is pushing for a measure that would give tribes exclusive rights to operate off-reservation sports betting (kiosks in non-tribal clubs and bars). Other Arizona tribes oppose the idea because, they say, it might hurt existing casinos on reservations.

Good Relations

In many locales, lawmakers are reluctant to push the issue without support from tribes. Hilary Tompkins, a former attorney with the Department of the Interior, which oversees the Bureau of Indian Affairs, says "It's not worth the pain of engaging in a fight with the tribes in their states. [If states] open the door to non-tribal sports betting, the tribes are going to say, 'We're going to reduce our revenue to you.' And that could end up in court."

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