The future of tribal gaming and sovereignty in the US are at risk as tribal leaders gather at the annual Indian Gaming Tradeshow & Convention this month.
Victor Rocha says that conservative organizations are attacking Indian country because they don’t like sovereignty. This includes tribal gaming rights.
Rocha, a member of Pechanga Band of Luiseno Indians, and chairman of the convention says, “We’ve been asleep with one eye open ever since Columbus landed.”
“This is just the latest in a long list of threats that we have had to face. It could be so fundamental that tribal governments would lose their exclusive right to govern.
These threats are exacerbated by the fact that tribal gaming is experiencing a strong recovery after the US’s Covid-19 pandemic.
Tribes have been renovating their properties and adding entertainment options, hotel rooms and other amenities to draw guests to resorts such as Las Vegas.
The National Indian Gaming Commission released a 2022 report that showed tribal gross gaming revenues totaled $39bn for the 2021 fiscal. This is a 40% increase over 2020 and 13% more than fiscal year 2019.
The record $39bn figure is getting closer to the $53bn GGR in commercial gaming.
There are 510 gaming businesses owned and operated by 243 federally recognized tribes in 29 US states. 43 gaming businesses reported gaming revenues exceeding $250 million and more than half of the total revenue.
Since 1988 when Congress passed the Indian Gaming Regulatory Act, which regulates the gaming activity on Indian lands, tribes have made great strides. They are allowed to regulate gaming as long as it’s not prohibited by any federal or state laws. This allows them to continue making progress in generating revenue that can be used to pay for education, housing, and other necessities.
At the time of IGRA’s enactment Indian gaming generated about $121m in gaming revenue, while Nevada casinos reported $4.1bn.
Tribal moves commercial
Tribes have seen their growth over the past 35 years and are now able to capitalize on this success by diversification, venturing from their reservations, and acquiring commercial casino properties.
One year ago, in April, the San Manuel Band of Mission Indians of Southern California opened the Palms Las Vegas under their ownership. In May 2021, it purchased the property from Red Rock Resorts at $650m.
The Seminole Tribe of Florida purchased The Mirage’s operations from MGM Resorts International last December for $1bn. Major renovations are underway, including the construction of a hotel in the shape of a guitar on Las Vegas Strip.
However, Tribes continue to face threats to their exclusive gaming rights in certain states.
California tribes defeated a sports betting initiative by DraftKings, FanDuel, MGM Resorts International and DraftKings International last November. Commercial operators spent hundreds of millions to secure a share of the sports betting market in a state that allows tribes to offer black jack and slot machines. This was approved by voters in 1998.
Although 82% of November’s voters voted against commercial gaming in sports betting, the same executives indicated that they may bring the issue back to voters in 2024.
Susan Jensen is the executive director of California Nations Indian Gaming Association. She says that what California tribes face is also a threat for other tribes across the US.
It is important to get the support of lawmakers and the public to assert their rights, as the California tribes did in November.
The most recent court cases
A federal judge in Washington dismissed a lawsuit filed by Maverick Gaming in February. This case challenged a state law that only allowed tribes to offer betting on sports. This case was appealed to the US Supreme Court.
Rocha says that tribes are being accused of being a “race of people”, referring to the recent court cases. Maverick wants to make tribal government a race and remove sovereignty.
“They are sending telegraphs from 10,000 miles away that they will take this case to the Supreme Court. We’re worried because this court is reactionary and conservative. We are not safe if Roe v. Wade, the 1973 Supreme Court case which legalized abortion in the US, is not safe. People are asking this question.”
The US Supreme Court will rule on November’s Haaland v. Brackeen hearing. Tribes await a decision. The high court will decide whether native American families are given preference when adopting or fostering children under the Child Welfare Act.
A couple from Texas brought the case. They use similar arguments to challenge tribal sovereignty, which are used in gambling. The case is viewed from the perspective that it’s about gaming rights.
Jensen spoke out about the topic at Raving Next’s recent gaming conference in New Mexico. “It can sometimes be very frightening what that could mean,” Jensen stated. “States should begin to prepare for this. We have California’s legislative language prepared in case of a negative decision. That’s what we have in our pockets.”
IGRA is under fire
Tribes are not just upset by court cases these days. Some tribes have criticized IGRA as an infringement of sovereignty. Tribes can’t enact gambling laws in states that allow other forms of gambling.
This is Idaho’s case. Tribes in Idaho face competition from nearby Washington tribal casinos, but they can’t offer betting on sports without the state’s approval.
“We can’t help but look at ways, maybe there’s an opportunity where we can get into and offer sports betting,” Laura Penney, CEO at the Coeur D’Alene Casino Resort and Hotel in New Mexico said.
“We are considering that. While many people think it’s an added bonus, it can enhance the gaming experience. It is possible to open up our gaming agreement and allow sports betting. It is necessary to remain competitive and generate revenue for our property.
The courts are currently deciding on Florida’s sports betting laws. The US Court of Appeals for District of Columbia is currently deciding whether to reverse a district court’s invalidation of a 30 year agreement between Florida, the Seminole Tribe of Florida.
The Seminole Tribe would have monopoly rights over betting on sports and mobile wagering. It would also be permitted to add craps or roulette.
A group of plaintiffs brought the case, including owners of a poker room and commercial casino, who claim that voters must approve gambling expansion.
This could have an impact on how future agreements between states or tribes are handled. It also hinges on whether the US Secretary of Interior, who oversees tribal gambling, was right to not intervene in the Florida-Seminoles agreement under IGRA.
Bureau of Indian Affairs proposal
The Bureau of Interior Affairs is overseen jointly by Native American Deb Haaland and the Secretary of Interior. It has proposed new rules to allow tribes mobile and online betting off reservations.
Rocha says that the IGRA has placed restrictions on tribes and tribes. Therefore, tribes need to look for and adopt these proposed [Bureau of Indian Affairs] regulations to keep up with the industry. “Mobile wagering is an option.”
Some sources suggest that the proposed regulatory changes may be met with resistance. These sources suggest that an update to IGRA would be more efficient.
Class II gaming is of great value
Some tribes seek federal oversight and are seeking a new direction beyond state compacts.
The Rincon band of Luiseno Indians from California, announced that it was leaving Class III gaming in January. It will no longer be allowed to play electronic, table, and slot machines. However, it must sign a state compact for Class I gaming. This allows bingo and other non-banked games, and is under the control of the National Indian Gaming Commission. It would not be subject to compact gaming regulation, but it would save the tribe money on state taxes and other fees.
Rocha said, “They are flexing their sovereign muscle.” They don’t need to sign a contract. They won’t have to be their partner. Tribes have always had to deal with this issue. This is why Class II is the theme of our show. If you have the imagination, Class II gaming is a way to expand your gaming without the state being your partner.
The IGRA requires states to negotiate compacts in good-faite and allow them to file lawsuits. However, the US Supreme Court has ruled against this requirement. According to Glenn Feldman, this changes the compact negotiation.
Arizona-based attorney represented Cabazon Band of Mission Indians in their high-limit bingo case before the US Supreme Court. This 1987 ruling was the catalyst for the passing of IGRA, which opened the door to tribal casinos.
He says, “That’s an Act weakness that has come back and haunt tribes.”
Some people suggested that Congress fix the situation or that the Department of Justice and Department of Interior file a lawsuit against states in support of tribes under compact. This is considered a long shot.
William Wood, an associate professor at Southwestern Law School who is also a tribal government lawyer, said that “I think many people are waiting for what happens to Brackeen case this year.” Wood and Feldman attended a University of Nevada Las Vegas tribal gaming conference last week.
Feldman says that there was initially hope that the current Supreme Court would be a pro-tribal majority, but it is not the case.
Expanding in one area can have an impact on operations in the other
Tribes are concerned about the potential expansion of gaming in certain regions. They fear that new options in one state could impact their operations elsewhere. Texas is the prime example. After repeatedly rejecting offers in the past, the Texas legislature is now deciding whether or not to allow gaming.
Las Vegas Sands Corp. continues its lobbying efforts for this expansion, spending millions.
There is concern that if Texas permits gaming, it could have a negative impact on residents who have traveled for decades to New Mexico, Louisiana, and Oklahoma. Some have suggested that the Texas tribes should be permitted to open casinos.
In the lone star, there is already a strong tribal presence. The US Supreme Court granted the Ysleta Del Sur Pueblo tribe in El Paso, and the Houston-area Alabama-Coushatta Tribe of Texas permission to regulate electronic bingo on tribal lands.
“It’s not theirs, but theirs”
Jan Jones Blackhurst is the chief executive officer in residence at University of Nevada Las Vegas International Gaming Institute. He also serves as a member of Caesars Entertainment’s board of directors.
She said that it takes care of current and future tribal members’ health, education and housing needs. Commercial gaming, on the other hand, looks at the next quarter’s earnings.
Caesars, the tribal casino operator, has remained out of the fight to legalize sports betting in California, unlike other commercial operators.
Jones Blackhurst stated that she was respectful and understood the importance of this conference. She explained that the commercial gaming industry should pay closer attention to how tribes manage themselves, how they build their communities, and how important it is for their members and those around them to succeed.
She said that tribes are open to going off-reserve and using the law, their ability and success to create better and more sustainable businesses.
Jones Blackhurst stated, “I see how difficult it was for tribes to succeed and some made it impossible.” “It began to dawn on me that commercial gaming should not feel it is tribal gaming but commercial gaming should instead look at tribal gaming to learn how it operates, how it has vision and copy that.”
Buck Wargo, a Las Vegas-based gaming journalist and businessman, is Buck Wargo. He was a reporter at the Los Angeles Times in the past. He holds a degree from the University of Texas in Middle Eastern Studies and has worked as a foreign correspondent for the Middle East.