In nearly 30 years under the Indian Gaming Regulatory Act and more than four decades in all, tribal government gaming operations have helped transform more than 240 native communities—in many cases serving as the sole source of tribal government revenue for health, education, public safety, housing, and other essential community services for Indian reservation residents.
Tribal government gaming operations also serve as the anchor for jobs and economic development for native and nearby communities. Indian gaming is responsible for more than 312,000 direct American jobs and an additional 350,000 indirect jobs annually. In several states, tribes are the largest employer in the region.
Native nations have accomplished these gains through responsible growth, unmatched gaming regulation, and carefully reasoned legal positions. Few are willing to place these gains at risk by moving too quickly to endorse or embrace new forms of gaming or unproven markets—and no one in Indian Country is willing to sacrifice one ounce of tribal sovereignty.
NIGA’s take on emerging gaming markets has been consistent from the beginning. First and foremost, we review federal legislative proposals that could change the national gaming landscape through a lens of how the new activity could impact tribal sovereignty. Tribal governments have the inherent right to conduct gaming under the Indian Gaming Regulatory (IGRA) and pursuant to tribal-state compacts. Any legislation that threatens to upend this delicate balance of inherent, statutory and constitutional rights for tribes will be vigorously opposed by our industry.
For nearly two decades, the gaming debate at the federal level has focused on internet gaming. These efforts resulted in the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA). NIGA and our member tribes worked to ensure that UIGEA protected all forms of gaming under IGRA and tribal-state compacts, including linked Class II gaming, progressive slot machines and other intra-tribal transactions.
The internet gaming debate abruptly shifted in 2011, when President Obama’s Department of Justice limited application of the federal Wire Act to “only the transmission of communications relating to bets or wagers on sporting events or contests.” The opinion opened up the internet to state lotteries. Since then, more than a dozen states have moved their lottery games online. Beyond online lottery sales, the states of Delaware, Nevada, New Jersey and now Pennsylvania have moved to legalize the play of poker and casino-style games on the internet to varying degrees of success.
While the DOJ opinion undercut the intentions of UIGEA, that law itself spawned unintended consequences by laying the legal groundwork for the emergence of the daily fantasy sports (DFS) industry. The growth of fantasy sports gambling is playing out at the local level, where at least 13 states have legalized pay-to-play DFS, and more than a dozen others are actively considering DFS in 2017-18.
In 2018, most of the attention in the U.S. gaming industry is on the prospect of legalized sports betting. Congress enacted the Professional and Amateur Sports Protection Act (PASPA) in 1992, which prohibited “governmental entities”—defined as Indian tribes and state governments—from legalizing gambling on sports competitions.
Efforts to repeal PASPA have grown in recent years, most prominently from the state of New Jersey. In 2017-18, at least 18 state legislatures are considering more than 40 bills to potentially legalize sports betting in one form or another. A handful of these bills directly involve sports betting by tribal governments.
This escalation of state legislative activity is of course driven by the U.S. Supreme Court’s review of the constitutionality of PASPA. The Court heard oral arguments in Christie (now Murphy) v. National Collegiate Athletic Association on December 4.
While we await the court’s decision, many expect the debate in Congress to intensify in the coming months regardless of the outcome of the ruling.
On December 4—the same day the court heard oral arguments—Rep. Frank Pallone (D-NJ) introduced the “Gaming Account-ability and Modernization Enhancement Act of 2017” (the GAME Act). At its core, the GAME Act would repeal PASPA, while potentially legalizing all of the emerging forms of gaming discussed above—subject to federal minimum consumer protections, reporting requirements, and problem gambling prevention provisions.
Indian Country generally views the Pallone bill as a positive first step, as the bill respects tribal sovereignty, defining the terms “government entity” and “state” to include federally recognized Indian tribes. However, a number of considerations and unanswered questions remain under review.
Last year, NIGA established a Sports Betting Working Group that has met consistently to form our policy position on these emerging markets.
While sports betting entails many different considerations compared to internet gaming, NIGA’s internet gaming principles offer a baseline of the policy concerns that our member tribes will seek to address.
Adopted in 2011, after a series of more than a dozen meetings, NIGA’s internet gaming principles are directives from our tribal leadership. They are guided by the U.S. Constitution’s recognition of Indian tribes as separate governments, and grounded in NIGA’s overall mission to protect tribal sovereignty and the inherent rights of all tribes to shape their economic futures.
NIGA’s principles require federal legislation to respect the status of Indian tribes as governments—ensuring that tribes have equal access and ability to either legalize or prohibit the new activity.
A related concern is the requirement that Indian gaming revenues not be subject to taxation. This is not a matter of picking winners and losers. It is a matter of respect for the U.S. Constitution and the governmental status of Indian tribes. Governments do not impose taxes on other governments. In addition, unlike commercial gaming operations, federal law—IGRA—requires tribes to dedicate Indian gaming revenues to the benefit of native communities and related governmental purposes. Thus, Indian gaming revenues are already 100 percent taxed at the tribal government level.
Our principles also require that federal legislation respect and protect existing rights under IGRA and tribal-state compacts. More than 240 native nations have invested heavily in the current federal gaming legal landscape. Congress cannot advance sweeping changes without first examining the potential impacts on Indian gaming, and taking steps to alleviate any such concerns.
Tribes have also invested significant time and resources to reach compact agreements with state governments. These tribal-state compact provisions must remain in force, and should not be impacted by any federal legislative efforts to alter the national gaming environment.
The issue of the need to protect and respect tribal-state compacts has played out at the local legislative level in the area of DFS. As noted above, more than a dozen states have legalized pay-to-play DFS, and at least a dozen more are expected to consider DFS bills in 2018.
Early attempts to legalize DFS at the state level took the misguided approach of ignoring Indian gaming interests and tribal-state compact provisions. The result was the defeat of DFS in both Oklahoma and Arizona state legislatures, where the proposals would have violated tribal-state gaming compact exclusivity provisions. As a result, the DFS industry is beginning to work with instead of around Indian Country.
With our principles serving as guidance, NIGA and our member tribes continue to lay groundwork for the discussion ahead. NIGA’s Sports Betting Work Group met in early March at the RES2018 Conference to gather information from experts and key stakeholders in the sports betting debate. Several presenters provided background information on the current state of sports betting in America, and the potential pros and cons to Indian gaming operations.
Our Sports Betting Working Group will continue meeting throughout Indian Country to obtain as many tribal leader viewpoints as possible. All of NIGA’s member tribes will meet at our Annual Conference and Tradeshow in April, where Indian Country will continue work to gain consensus. We will weigh the questions listed above and many more—including how certain types of sports betting should be classified under IGRA.
Indian gaming has come too far and done far too much to improve the lives of reservation residents. Indian Country has a sound seat at the decision-making table in Congress, and our voice will be heard in the important debate that lies ahead in the aftermath of the Supreme Court’s PASPA decision.
