Recent court rulings have given tribal nations in the United States hope that they will be able to defend their sovereignty. However, with the state governments wanting more control over Indian Country as well as ongoing concerns about courts, these fears are not going away.
Tribal leaders expressed similar concerns at last week’s Foxwoods Resort & Casino mid-year conference & expo, just as they had done at the Indian Gaming Association (IGA) conference held in March.
Tribal gaming is in good health. The National Indian Gaming Commission’s annual report shows revenues in 2022 rose 4.9% to $40.9bn (PS33.0bn/EUR38.2bn). This $1.9bn increase is the largest ever recorded.
Even though tribal leaders have enjoyed a lot of success, they remain wary as politicians and commercial gaming interests try to reduce their share by using the courts or state government.
In June, the US Supreme Court upheld in a majority decision the validity of Congress’ 1978 Indian Child Welfare Act.
Haaland vs Brackeen victory
The high court, while deciding whether Native American families should be given preference when it comes to fostering and adopting children (Haaland vs Brackeen), harmed tribal sovereignty.
In this case, a couple from Texas who were not natives cited arguments used to restrict tribal gaming rights enshrined by the 1988 Indian Gaming Regulatory Act. The tribes were concerned that if the case was lost, it would be used as a tool to remove gaming rights.
Victor Rocha is the conference chair for the IGA. He says, “It will make people think twice before going to the Supreme Court in order to weaken tribal sovereignty.”
It’s this aspect that creates a little doubt for many of these organizations that are going after tribes.
IGA Chairman Ernie Stevens claims that tribes don’t want to create favoritism. It’s more about recognising that tribes have been sovereign governments for a long time before the US Constitution.
Seminoles Celebrate Sunshine State Success
Tribes won another victory this summer, when a federal court of appeals reinstated the compact between the Seminole Tribe in Florida and the State. This agreement focuses on mobile sports betting statewide, creating a tribal-owned monopoly. Gambling expansion requires a commercial casino and poker rooms.
11th September the US Court of Appeals in the District of Columbia voted against a rehearing of the case. The Supreme Court could hear the case if it is not appealed. Sports betting may now be available this month. This case will have a ripple effect on other tribes, and could lead to future legal challenges.
Rocha, who emphasized that online gaming and sports betting are important for the future of a tribe, said, “It was an eye-opener to us all, especially those like me who were afraid of eclipses.”
It changes many things when tribes start thinking about sports betting or compact negotiations. The tribes are trying to take away everything they have or negotiate it down. This case is generating a lot excitement and I am seeing many reports that the tribes could start sports betting. It gives me a lot more optimism.”
Scott Crowell, an Arizona-based attorney for tribal gaming, said that the significance of this ruling was “overwhelming”. The ruling dispels the idea that IGRA could be used to prevent tribes from participating in sports betting, the newest and fastest-growing sector of the gambling market. This argument held sway at the district court.
Boxed
Crowell: “That somehow all aspects of gaming activities must occur on Indian land, or else tribes cannot participate?” The circuit court ended that nonsense.
Since the early years of the Indian Gaming Regulatory Act we have had off-track betting agreements with tribes from dozens of different states. The major part of this gaming – which determines the result of the game – occurs off Indian land.
This has been dispelled, and it’s going be crucial as tribes across the country look to see what opportunities they might have with mobile betting.
State by state, the issue will be decided. Crowell says that there is a way to do it if a tribe and a state are willing to sign an IGRA agreement.
Rocha: “It was like the industry tried to put us into a box.” They were using IGRA to lock the tribes into a box. This feels like the box is now open, but the case has to be handled state-by-state.
Commercials powering tribal?
Crowell claims that sports betting operators had pushed for the state-by-state model. Commercial competitors spent hundreds millions of dollars to defeat a referendum in 2022 that would have allowed sports betting in California. They would be able to negotiate deals that would allow them to keep most of the revenue.
Crowell explains that “they like the model” because of the Indian Gaming Regulatory Act, which stipulates that tribes are the primary beneficiaries and have the sole ownership interest. At least 60% the revenue goes to the tribes. He wants to see more deals in which commercial technology is used to power tribal brands.
The economic opportunities for tribes would change dramatically if there were companies that had the technology to set up a website and offer that service, while recognizing that the maximum revenue that they could extrapolate was 40%.
The exclusiveness factor
He continues, “The key to the economics behind the Seminole’s deal with Florida is exclusivity.” It is a stark contrast to a state such as Arizona, where 10 tribal licenses and another 10 brought in DraftKings FanDuel BetMGM along with sports franchises.
Crowell says that, “even though the tribes hold half of the licenses, they may have only 5% to 10% of the revenues. This was due to the legal uncertainty before this decision came down.”
The ruling clearly states that there is a model, if a tribe and a state are willing to follow it. It doesn’t address the issue of tribes being excluded from statewide mobile betting by states.
Crowell notes that Oregon did this. It claimed that only the lottery was able to offer mobile gaming statewide. The District Court’s decision was also used to deny tribes the right to amend their compacts to allow for mobile betting statewide.
The lottery signed an agreement with DraftKings and paid 49% of its net revenues to the operator. DraftKings will also receive 85% of the revenue if a state compact is signed with a tribal group that allows mobile sports betting. The share increases to 95% if there are four Oregon tribes that have signed compacts.
Crowell: “It is crazy that they have locked in this position, which says ‘we are going to create an Oregon State Lottery and lock out the tribes’.” The Oregon Lottery may regret entering into this agreement.
They face a problem if a state refuses to enter an agreement like the Seminoles deal but allows residents to bet from anywhere in their state. He says that under the IGRA, they are required to negotiate with good faith a compact amendment allowing the tribes the same game.
Will Oklahoma be affected by the Florida ruling?
Jason Giles is an attorney and executive Director of the IGA. He wonders what will happen in Oklahoma with tribal gaming and Kevin Stitt, the Governor. The governor has no interest in sports betting, but he may allow commercial operators to enter the state.
Giles explains that, “despite Governor Stitt’s hostile attitude, the legislature appears to be very friendly. They were poised to authorize sports betting for the Oklahoma tribal members,” Giles says. “[But] they were trying to do this without consulting the […] tribals, which led to the failure.
“This Seminole case gives Oklahoma’s tribes and the Oklahoma Legislature a good model, which I believe works. They have preserved tribal exclusivity in casino-style games, just like many other states, such as California and Minnesota.
The Seminole Model would be a good option for those with tribal exclusivity. It will help establish the legal framework needed to move forward.
Crowell explains that even if tribes are allowed to use mobile betting, there will be economic obstacles. Crowell gives the example of North Carolina where mobile sports betting is allowed statewide. The tribes had the option of being geofenced within the reservation, or competing against commercial operators to win one of 12 licences.
The threat of legal action against tribal sovereignty still lingers
Giles hopes that the recent court decisions will deter further attacks on tribal sovereignty. He cites the case of tribes in Washington State who won a court victory in February after a judge dismissed an attempt by card room operator Maverick Gaming to overturn a law that gave tribes exclusive rights for sports betting.
The appeal has been filed with the US Court of Appeals, Ninth Circuit. Giles believes it will make its way up to the Supreme Court, where anything could happen. This is a court which has not been kind to tribes before, changed past rulings and could ultimately threaten sovereignty.
Giles says, “Commercial players are now coming in very aggressively and challenging tribal exclusivity. We take this as a threat to sovereignty.” If it were just commercial gaming, we’d fight them. But it’s an entire movement.
“We’re a government who pre-existed America and we will have to continue to argue that. Even though the ICWA ruling was good, the Supreme Court did not say that the tribes existed before the Union. In the enabling act, states did not want to have anything to do about Indian tribes. They left it to the federal government. The Maverick case should die out on its own.”
Prepare for the future
IGA and National Congress of American Indians reactivated an inactive task force to protect tribal sovereignty and held its initial meeting during the summer.
The Department of Interior is looking to simplify regulations pertaining to tribal lands to help reclaim stolen land. Giles says that those dealing with commercial gaming operators who have been brought in by compacts falsely claim that tribes will open casinos on land they buy in the middle city.
He says that “our interests have become more aligned with commercial gaming, and they are more receptive to us than ever before. This is largely due to the fact that they began doing business in Indian Country.”
FanDuel, DraftKings, and other companies are running sportsbooks on behalf of tribes, despite the fact that they say tribal sovereignty should not exist.
Sovereignty stretches beyond gaming
Rocha says that sovereignty is not only at risk with sports betting and gambling. Native Americans were moved by the adoption case, which harkened back to forced boarding schooling and removing children.
Rocha explains that “In Indian Country, people wept in victory and said we can preserve our own future.” Rocha explains, “Here was an important law that saved children while preserving the culture. It was threatened.
It’s vital that we don’t become complacent, and continue to fight. We must keep a close eye on things and ensure that the tribes do not get shanghaied. It could still happen.”
Giles’ fear will never disappear because of the recent state of American politics.
He says, “You don’t know what the future holds for this country.” Imagine the damage that could be done if you got more people to [Congress] who don’t like tribalism and feel they are unfairly favored.
We’re in an area where a minority of people can set the course for many others and they follow it because they do not want conflict. “Tribes have dealt with this time and again.”
