Numerous Native American tribes across the country believe they have an exclusive right to offer sports betting now that the federal ban on sports wagering fell via the Supreme Court last May. In many cases, that desire for exclusivity is slowing the process of legalizing sports betting. Given the massive payments some tribes pay states according to to their tribal-state compacts, and concern for losing those contributions, the tribes have lawmakers’ ears. And in at least three states, lawmakers have filed bills that would give local tribes a monopoly on sports betting.
The desire for a monopoly is obvious. Becoming the only game in town forces anyone who wants to legally bet on sports visit to a tribal casino, or use a tribe’s app. While tribes in Minnesota and other states want exclusivity, most don’t want mobile sports betting, even if the mobile apps are tied to tribal casinos. Yet given what New Jersey‘s ever-increasing mobile sports betting revenue figures have proven, at least in the short term, mobile is where the real money is at in sports betting, so it seems curious that Minnesota tribes are so adamantly opposed. The concern boils down to foot traffic worries.
“Our major concern is the mobile gambling,” said John McCarthy, executive director of the Minnesota Indian Gambling Association. “We’ve been fighting that forever. Why would you get up on a 20-below-zero-day and come out to the casino when you could just sit at home. We’re not opposed in any way to sports betting as an activity, but we are concerned about what (mobile) leads to.”
MN tribes: Mobile will damage casinos
It appears that Minnesota tribes believe that mobile gaming of any kind will damage physical casinos. In many cases, in Minnesota and across the country, casinos are the very lifeblood of a reservation, a meeting place, a provider of jobs, a source of community pride. Minnesota’s tribes believe that mobile gaming could open a Pandora’s box they’d rather keep a tight lid on.
“It’s not specifically the money today, it would be kind of an amenity, but we don’t think it’s a huge amenity,” McCarthy said. “The state of Minnesota, it’s not Chicago, and it’s not New York and it’s not LA, but if it were to pass …. We’ve seen how it works, the first thing that starts to go is the live racing (at racinos), then they go back to the legislature, and say, we’re not quite making it, we really need some machines, and then other groups come in and say, well, you’re bailing them out, I’m a farmer, so why don’t you bail me out?”
But this view is not universal, highlighting the divergent views among tribes nationwide. At a hearing concerning gaming in Connecticut in 2018, one of the two powerful tribes, Mashantucket Pequot Tribal Nation, which runs Foxwoods Resorts Casino, expressed support for mobile sports betting and iGaming.
“As we see it, the strongest opportunity for the state is in legalizing statewide iGaming, another activity that is currently operating for Connecticut residents in the black market today,” the tribe wrote in a statement. Of course, the representative for Foxwoods wrote, “[F]or the record that I know the tribes believe sports gambling, daily fantasy sports betting, and iGaming fall under the exclusivity agreement.”
Next steps in Minnesota
This week, Minnesota Representative Pat Garofalo (R-District 58B) will become the third lawmaker to offer up a sports betting bill with tribal exclusivity. He says he consulted with tribal interests before drafting his bill, though McCarthy said those conversations didn’t happen through his organization. Garofalo outlined the details of his bill — on-site sports betting at tribal locations only, no state-wide mobile — at a press conference late last week. He’s also suggesting a unique tax structure that he believes will benefit the state. The bill calls for a 0.5 percent on total betting handle, rather than revenue, which is the norm in states to have legalized and launched.
But separate from the details, Garofalo’s bill placates Minnesota’s Indian gaming interests. In a state that only has tribal gaming, and in which the state would benefit through a tax, he’s merely trying to create a new revenue stream and open the door to sports betting.
“I’ve got to be honest,” Garofalo said. “My goal is to get the bill passed, so I made the concession (of taking mobile off the table). All the controversy has been removed from this bill, so it really will just be a matter of public opinion.”
But the tribes only want it on their own terms. Members of the Minnesota Indian Gambling Association in January sent a letter to state lawmakers saying they “oppose the expansion of off-reservation gambling, including the legalization of sports betting.”
This letter from the Minnesota Indian Gaming Association opposing the legalization of sports betting means that legislation is dead this session (and likely longer). Frustrating. pic.twitter.com/Go2tQ1Z3rg
— John Kriesel (@johnkriesel) January 14, 2019
Because of these beliefs, Minnesota’s tribes are taking a hard line against sports betting. The letter leaves little room for negotiation, and McCarthy said that as long as mobile is on the table, the tribes are unlikely to budge. The Minnesota Indian Gambling Association is essentially a trade association, with voluntary participation, and should one member of the group decide that sports betting is in its best interests, it would not be bound by the association to not offer it.
Bills pit tribes against commercial gaming interests
It’s likely that public opinion in Minnesota will mirror Washington, where during a sports betting hearing for another tribal-only bill, lawmakers and the public had major concerns about limiting sports betting to tribal interests. The key question — is it fair to exclude restaurants, bars, card rooms, horse-racing venues, OTBs or other commercial entities from offering sports betting?
“If we’re left behind and not allowed to add our toolbox as tribes are trying to do here, you won’t fatally kill us right away, but you’ll wound us so badly, that we’re going to die and go away pretty soon,” Pat LePley, president of Washington Horsemen’s Benevolent and Protective Association testified.
His words crystalized a growing sentiment across the country. And tribes around the country are not naive to the fact that asking for exclusivity will render some bills DOA. But many tribes are in no rush with sports betting — generally a low margin and volatile source of revenue.
“We don’t think (Garofalo’s bill is) going to fly at the legislature because of exclusivity,” Minnesota’s McCarthy said. “Bar owners and other restaurant owners are going to have a fit.”
Though Indian tribes do have the exclusive right to gaming in some states, including Washington, Minnesota and Connecticut, sports betting is not explicitly addressed in existing tribal compacts, although the argument goes that sports betting is encompassed in a certain class of gaming that is permitted.
Tribal-friendly sports betting bills will be test cases
Minnesota, along with Washington and Arizona, will be test cases of just how strong the Indian gaming lobbies are in various states. In Washington last week, Representative Eric Pettigrew (D-District 37), who sponsored HB 1975 which would legalize sports betting only at Indian-0wned venues, declined to discuss adding Emerald Downs, a commercial horse track, to the bill, saying that by legalizing gaming on tribal lands, state residents have already shown that they don’t want sports betting on every corner, but only in designated locations.
— Brian Pempus (@brianpempus) February 14, 2019
Tribal representatives support the bill, which also does not include mobile sports betting, arguing that exclusivity provides economic opportunity to the tribe in general, as well as providing jobs for its members.
Jerry Allen, a tribal elder of the Jamestown S’Klallam Tribe in Washington, told Sports Handle that it’s delicate balance between offering mobile and keeping the bricks-and-mortar casinos vibrant.
“We want the traffic is generates,” he said. “The Nevada and New Jersey sports betting model still works, but at some time you have to drive people into your brick and mortars. Making sports betting too easy by putting it in convenience stores and the like, as Oregon wants to do, and put into the same kiosks with their daily keno game creates a different problem.
“But it makes no sense to offer up a bill that doesn’t make sports betting accessible to everyone through mobile betting. It’s clear the public doesn’t want to get out of their own living rooms every time they make a bet.”
Arizona was the first state in which a tribal-only sports betting bill was filed, when HB 1158 was introduced last month. That bill allows for sports betting at tribal locations, including at on-reservation casinos, and via kiosks locations that have a bar, beer and wine, or private club license. The bill has yet to have a hearing, though lawmakers have been discussing it. It appears that Arizona could not legalize commercial sports betting without breaking its current tribal compacts.