Changing tribal gaming compacts promises to become a top story in 2019

by Administrator

It’s a time of year for predictions, and this one is easy: We will hear a lot about the definition of “exclusivity” in the next dozen months as states with tribal casinos test alliances and gaming compacts.

Much is at stake for all the players involved.

For the tribes, sovereign nations by definition, an unprecedented economic boom could be cooling for the first time since the Indian Gaming Regulatory Act of 1988 changed the face of casino gambling forever. This multibillion-dollar business has no shortage of critics, but it’s been an undeniable boon for many of the participating tribes.

While some analysts in Indian Country decry the fact not all tribes are enjoying the benefits of casino play, the fact remains that it’s become a $32 billion-a-year segment of the gambling industry. With approximately 475 casinos run by 240 tribes, profits have created jobs and improved infrastructure in many areas.

Now matters promise to become more complicated.

The repeal in 2018 of the Professional and Amateur Sports Protection Act (PASPA) is leading to the spread of state-sponsored sports betting and legal and regulation bookmaking in jurisdictions where the activity has long drawn law enforcement attention. That’s good news for sports book operators and those who envision a multibillion-dollar gold rush as bettors flock to corporate sports books, kiosks and phone apps. But it raises prickly politics in those states with tribal gambling compacts.

Can sports betting be approved without new contracts? Will this lead to the end of exclusivity for the tribes? Will the inevitable litigation tie up the factions in courts and legislatures as the law and politics are tested?

For many tribal leaders, the signs of erosion are already evident. In California, for instance, card clubs have been found introducing games and banking methods beyond their purview. In Arizona, a state legislator has announced a plan to enable gambling expansion via a state-run keno game with the stated goal of raising revenue without raising taxes.

As Arizona state Sen.-elect Michelle Ugenti-Rita told a local television news reporter, “It’s hard to project how much revenue it could generate but to that point, the revenue in my bill would go to the general fund.”

Sure it would, but there’s the small detail of violating the state’s 16-year-old compact with tribal governments that allows only them to operate casino-style games. Arizona Gov. Doug Ducey has previously raised the issue of allowing a keno-style game to compensate public schoolteachers.

It all seems harmless enough, even fiscally beneficial in a nation awash in gambling opportunities, but the Navajo Nation knows its rights and the law and isn’t napping. The keno plan, which by one estimate would generate less than $20 million a year, is unlikely to be tempting enough for most legislators to go to all the trouble of trying to push it through the process.

But legalized sports betting would surely generate many times more than keno. Arizona has a long history of illegal sports betting, so it’s not difficult to see that the activity proliferates the state.

While the Navajo would certainly benefit from adding a legal sports book to its gambling offerings, it would be foolish to risk reopening the compact without assurances that it won’t be killing its golden goose.

Is there room for compromise?

If a reasoned decision is reached, the upside would be substantial. Judging from the early success of a legal sports book owned by the Mississippi Band of Choctaw Indians, there’s no shortage of customers at its Pearl River Resort eager to place bets on the state’s enormously popular college football teams.

The tribe’s director of gaming Neal Atkinson told Associated Press, “We are basically two hours from Tuscaloosa, Alabama, and then, we are just an hour from Mississippi State. We have Ole Miss just to the north of that, and we have Southern Miss — they’re not SEC, but they are a player. We are not that far from Louisiana.”

But not every tribe enjoys such a prime location.

There are legal, monetary and political risks for the tribes.

As one Washington State gaming regulator wondered to an AP reporter, “Is this going to help us? Is this going to hurt us? That’s really at the heart of why you see Indian tribes gently venturing into sports betting.”

That’s wise, of course, but that doesn’t tribal governments are only one player in this game that’s moving rapidly in 2019.

In fact, he’d bet on it.