Indian Country Online

How can tribal government gaming benefit from online gaming and sports betting?

One of the sources of incremental revenue for commercial casino companies has been online gaming. In New Jersey, the struggling Atlantic City casinos were thrown a lifeline with iGaming. Revenue has steadily risen and has helped bolster the bottom lines of those once-struggling casinos. The total monthly gross gaming revenue in New Jersey for online gaming alone is about $35 million, which, if it were a separate casino, would make it the second-highest-grossing casino in the city.

And sports betting is doing its part as well. Just six months into its legalization, New Jersey is taking more than 70 percent of its revenue from mobile betting.

Despite the fact that online betting and mobile wagering are abundant, Atlantic City casinos are also attracting new customers to their brick-and-mortar facilities by offering points and comps via their online rewards club that can only be redeemed inside the casino property.

The question of how tribal government gaming can benefit from online gaming and sports betting is complicated.

Since the vast majority of tribal casinos are located on relatively remote reservations, usually a long drive for customers, tribal leaders are reluctant to give them a choice of playing from a mobile device or a computer. Even though a tribal casino could conceivably derive revenue from iGaming, it is more important to be able to bring that customer to the actual casino. Because usually it’s more than just one person, and usually they do more than just gamble.

So I understand that reasoning.

On the other hand, there are more and more opportunities for people to play online—legally or illegally.

Sports betting is spreading like wildfire across the country. At this time, there are eight states where sports betting is legal and almost 20 where there is legislation to make it so. But in states where tribal gaming is pretty much the only game in town, tribes are shutting down the train. Even when legislation would limit sports betting to tribal facilities.

Now as I said, I understand the reasoning in requiring a customer to visit your somewhat remote tribal casino to gamble, but if sports betting is limited to the tribes, why not incorporate it? Especially if you can add mobile sports betting to your list of offerings.

I also understand that there are concerns about tribal sovereignty, and while I don’t discount the importance of that issue, there are some ways around it—ways to establish a sports betting business outside of the reservation. Not being an attorney, I wouldn’t venture a suggestion about how that could be accomplished, but I know some brilliant tribal lawyers who could get the job done.

The Choctaws in Mississippi have found a way. Yes, I know that they already operate in competition with commercial casinos and must introduce sports betting just to keep pace, but they were able to get over the sovereignty issue, as well as the off-reservation questions. And I’m sure they’ve got a mobile solution in their plans once that becomes legal in the state.

And the Santa Ana tribe in New Mexico has proactively installed sports betting at its Santa Ana Star casino, determining that they have the right under their compact with the state. That’s still to be determined, but sports betting there continues.

But let’s talk about the overall picture, and how tribal gaming is almost completely discounting interactive gambling—at its own peril, I believe.

You can’t bury your head in the sand and pretend that it isn’t happening. Because it is. And without any participation or negotiation from the tribal side, it could be a serious mistake.

We’ve all got these devices called cellphones or tablets that rule our lives these days. You can’t book a plane ticket, check into a hotel room or make a restaurant reservation without one. And they keep getting more and more sophisticated. There’s an app for everything, including lots for gambling.

Tribes that are ignoring this coming technology tsunami are fooling themselves. Yes, you need to balance the issues of in-person gambling and entertainment, along with the sovereignty issues, but iGaming and mobile sports betting are coming. Tribes need to be prepared.

Yes, getting tribes on the same page is very difficult—almost impossible. So maybe tribal members have to think for themselves and decide what is best for their individual tribes.

Let’s end this column with one word: Blockbuster. Used to be one on every corner, but now they’ve disappeared from the landscape because the owners didn’t believe Netflix would work. Who ever heard of mailing a DVD to customers? But that was just the start for Netflix and new technology. Let’s not let tribal gaming become the Blockbuster of the 21st century.

Author: Roger Gros

Roger Gros is publisher of Casino Connection International, LLC. Global Gaming Business magazine, Casino Connection Atlantic City and Casino Connection Nevada are among the monthly publications Gros publishes. Prior to joining CCI, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its third edition. Gros was named “Businessman of the Year” for 1998 by the Greater Atlantic City Chamber of Commerce.