Tribal gaming could throw wrench into sports betting expansion

Tribal gaming could throw wrench into sports betting expansion

January 09, 2018 3:11 AM
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If and when, perhaps as early as June, the U.S. Supreme Court allows each state to institute its own sports wagering laws, it may not be as smooth a path to execution as many observers believe.

The reason is the complicated relationships many states have with Tribal gaming, now a nearly $100 billion business in this country. Indian gaming entities control gambling in the populous states of Florida, California and Connecticut, just to name a few. Toss in Oklahoma and numerous other mid-western and western jurisdictions and the result is the Native Americans, in the form of their National Indian Gaming Association (NIGA), are certainly a force to be reckoned with.

It was simply stated by NIGA leaders last summer that, when it comes to the legalization of sports wagering, “We must have a seat at the table.”

As we say in the gambling world, NIGA leaders have plenty of juice because as the American Gaming Association (AGA) presented in a recently released report entitled “The Economic Impact of Tribal Gaming: A First-Ever State-by-State Analysis,” tribal gaming nationally supports as many as 635,000 jobs that generate $33 billion in employee wages.

The report also notes tribal casinos generate close to $16 billion in taxes and payments to federal, state and local governments. AGA data reveal, as of several months ago, there were about 485 Indian gaming operations comprised of 565 Native American tribes running 244 gambling operations in 28 states.

When it comes time for each state to fine tune and pass sports gambling legislation in states with a significant tribal gaming presence, the Native American gaming contingent will have plenty of clout. No state is going to risk jeopardizing the tax revenue Indian casinos generate.

Late last year, the Seminole Tribe of Florida, national and global operators of the Hard Rock gambling brand, issued a warning soon to become familiar if sports betting becomes legal in this country. Seminole leaders contend their exclusivity is being compromised when a new form of gambling enters their state. They’ve defended their compact with the state in court before with success.

The Seminoles have issued a formal letter of complaint in response to a Florida bill that could allow daily fantasy sports (DFS) to become legal in the state. Expect similar objections in many other tribal-controlled gambling states where compacts dictate what kinds of gambling can be offered and who can offer them.

Issues related to DFS, sports gambling, online gambling and iGaming will all have to be scrutinized, certainly resulting in renegotiation of many of these agreements.

This will be a complicated issue to sort out as has been pointed out by Spectrum Gaming’s Managing Director Michael Pollock “there’s not just two sides, there’s multiple sides to these issues.”

In California, a massive gambling expansion is under way. State lawmakers will have to consider legislation to determine who gets potentially lucrative contracts to operate online poker and possible sports betting within the state’s border.

Hundreds of millions of dollars are now being spent at numerous San Diego-area casino/resorts such as the $285 million in improvements at the Pechanga complex near Temecula, making it the largest casino/resort in the state.

Pala Casino Spa and Resort, located in Northern San Diego County, last year announced plans to remodel and expand its existing facility at an estimated cost of $170 million.

The San Manuel Band of Mission Indians announced plans of their own to build a 500-room hotel and the Luiseno Indian Tribe, located in the San Jacinto area, are among the other tribal gaming entities pouring millions into their operations.

Indian gaming operators will certainly have something to say about sports wagering, especially if a state allows online betting. They will move quickly in the courts to protect their investments, if need be. They will have a significant voice in how potential sports betting is legalized wherever they operate.

You can count on that.