American Indian tribes have been largely ignored in the public and media debate over the potential legalization of sports betting, despite the fact indigenous governments operate the largest segment of the nation’s legal gambling industry.
With nearly 500 casinos nationwide, tribal governments dominate gambling policy in many of the 29 states in which they do business, including the potentially major sports betting markets of California, Florida, New York, Michigan, Arizona, Washington, Minnesota and Wisconsin.
Tribal governments will play a significant political role in efforts to legalize expanded gambling in those and other states.
“If you are thinking of moving into some big-market states—whether it’s California or New York or Florida—you are going to have to deal with the tribes,” says Chris Stearns, a member of the Washington Gambling Commission.
“You don’t just walk in and turn on the lights,” says Stearns, a Navajo. “Whether you have to deal with exclusivity or whether you have to push a boulder uphill in the legislature, you are going to have to work something out with the tribes. It may not be what you want.”
Nevertheless, tribal governments have been ignored in most trade press and mainstream media coverage of the nationwide movement for repeal of a federal ban on sports wagering, which happened with last month’s U.S. Supreme Court ruling.
“What’s been written is largely from the perspective of the commercial operators,” says a tribal media consultant who requested anonymity.
“I believe the media have been overlooking tribal gaming or not taking it into account,” agrees economist Alan Meister, author of the Indian Gaming Industry Report. “It could be just a pure lack of knowledge of Indian gaming.”
Tribes also have been left out of much of the anticipatory legislation introduced in New York and nearly 20 other states which could legalize sports betting in the wake of the Supreme Court ruling repealing the Professional and Amateur Sports Protection Act (PASPA).
Debbie Thundercloud, chief of staff for the National Indian Gaming Association, a tribal casino trade group and lobby, says the tribal government casino industry “is one of the best-kept secrets in the gaming market in the United States.”
“It’s a big industry and it’s a significant part of the gaming industry in the United States,” says Ron Allen, chairman of both the Washington Indian Gaming Association and Jamestown S’Klallam Tribe.
The trade press had largely promoted a well-financed campaign for repeal of PASPA launched by the American Gaming Association, a lobby and trade group primarily for the commercial casino industry, but which has 10 tribal members.
NIGA, which puts its membership at 184 tribes, passed a resolution in April joining AGA in seeking repeal of PASPA.
But NIGA is demanding new legislation to give tribes equal sovereignty with the states, tax exemptions provided in the Indian Gaming Regulatory Act (IGRA), protection of gambling exclusivity provisions in tribal-state regulatory agreements, or compacts, and other assurances.
The ability of many states to pass legislation expanding sports betting and other legal gambling may hinge on their ability to work with the tribes.
Tribes in the West and Southwest and along the East Coast are apparently more anxious to pursue sports betting than those in the Midwest and Great Plains.
Industry writers and federal and state officials seldom delineate between commercial casinos taxed and regulated by the states and tribal government casinos, which operate under federal law and tribal-state compacts. Casino revenues are used to provide services to indigenous citizens.
“It’s all casinos to them,” AGA President and CEO Geoff Freeman told attendees of the NIGA conference and trade show in April.
Some blame the media. Others fault the tribes, many of which distrust the media or have difficulties dealing with the press.
Tribes have historically discouraged coverage of government casinos for fear of being labeled as rich Indians. Despite the unprecedented social and economic progress gambling has created for tribes, most of Indian Country continues to struggle with poverty and high unemployment.
“I don’t see a lot of focus on Indian gaming,” says Howard Stutz, former gaming reporter for the Las Vegas Review Journal. “A lot of the focus has been on states and the legislatures. I don’t think the media, in general, differentiates between tribal gaming and commercial gaming. A few reporters do—those who have been in the business for a while. But most of them don’t.
“I don’t know if that’s the fault of the media or the tribes.”
“Tribes are getting less and less coverage,” says Victor Rocha of Victor Strategies and Pechanga.net, a tribal gaming news service.
“Tribes are getting thrown in with commercial gaming,” Rocha says, a situation he believes is partially a result of the demise of newspapers and the popularity of social media news snippets.
“The problem is twofold,” says Rocha, a citizen of the Pechanga Band of Luiseño Indians. “It’s lazy journalism and it’s the tribes.”
It’s impossible to accurately report on the spread of sports betting without giving considerable weight to tribal casinos.
Two hundred forty-four tribal governments operate 484 gambling facilities in 28 states that in fiscal year 2016 generated $31.2 billion, according to the National Indian Gaming Commission, the federal agency that oversees and audits tribal casinos.
Eighty-four casinos in more urban areas, or 17.3 percent of the operations, generated 72.9 percent of the revenues, according to the NIGC. Many tribal casinos are marginal operations on rural reservations whose value is in the creation of jobs.
In comparison, the commercial industry in 2016 consisted of 404 casinos generating about $30 billion a year, according to the AGA and Meister’s report, an updated version of which was expected to be released in late May.
But 273 of the commercial casinos are in Nevada, according to the AGA, where wagering on sports was already legal. Another 60 operations are in South Dakota and Colorado, leaving 71 for-profit casinos in the remaining 47 states.
AGA combines 54 racetrack gambling facilities, or racinos, in 15 states with the commercial casinos, raising the total revenue to $38.96 billion. Racinos, which according to Meister generated $8.6 billion in 2015, are largely run by the parimutuel industry to subsidize purses.
David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, estimates the total legal gambling industry (tribal and commercial casinos, parimutuel racing, lotteries, charitable gaming and card rooms) generates about $100 billion a year.
The major beneficiary of sports betting on the commercial side of the industry aisle is MGM Resorts International, which has casinos in six states outside its base in Nevada. It also has an online app, playMGM.
Ignorance of tribal government gambling even among the industry was evident last year when an AGA coalition launched its sports betting website stating its goal was to “give states the ability to decide the question of legalization.”
It also called for a “tax regime” enabling the U.S. to compete with offshore operators.
The website has since been edited to recognize that tribes are sovereign governments equal to the states with gambling revenues exempt from taxation.
Tribal government casinos under IGRA also have primacy in regulating gambling on trust lands.
Tribes Under the Radar
Writing about tribes can be difficult for reporters not familiar with IGRA, tribal governance and Indian law. Tribal governments are not as transparent as non-Indian governments and keep much information secret.
The commercial casino industry is largely consolidated. The AGA had a unified message to repeal PASPA and a sizeable amount of research to support its case.
The 244 tribes operating casinos are far from monolithic, with different cultures and governmental structures.
Casino gambling plays a varying role in their economic strategies. And the legal and regulatory constraints of operating under IGRA and tribal-state compacts differ greatly from state to state.
Tribal associations in California, Washington, Oklahoma, Arizona, Minnesota and elsewhere invest heavily in public relations, particularly studies that show the benefit of tribal gambling on jobs and state economies.
But little effort is made to reach out to the press on ongoing issues, whether it involves sports betting and internet gambling or pan-Indian issues such as the land-trust process and the recent, failed attempt to get the Tribal Labor Sovereignty Act through the U.S. Senate.
“Everybody in Indian Country talks about PR, but they don’t really know what that means,” says Nikki Symington, a veteran tribal advocate and communications expert. “PR doesn’t include an ongoing relationship with the media. You need to keep an ongoing dialogue with the press.”
“Many tribes are very sophisticated and have very good communications with the media,” says Mark Trahant, editor of Indian Country Today and former president of the Native American Journalists Association.
“Other tribes are very careful,” says Trahant, a member of Idaho’s Shoshone-Bannock Tribe.
Trahant and others believe the non-Indian press and policymakers lack an understanding of tribal sovereignty and self-governance.
“I think you saw that recently with the labor debate in the Senate,” Trahant says. “They didn’t see that as an issue of tribal governance. They saw that as tribes trying to deal with organized labor.”
“It’s an issue at both the state and federal level,” Bryan Newland, chairman of the Bay Mills Indian Community in Michigan, says of the inability of the press and policymakers to grasp the complexities of Indian law.
Tribes contribute to the void by failing to invite mainstream media coverage of gatherings where gambling, land trust, labor and other native issues are discussed, whether it be NIGA, the National Congress of American Indians, National Center for American Indian Economic Development, Native American Finance Officers Association or other groups.
Neither the Las Vegas Review-Journal nor the Las Vegas Sun covered NIGA’s annual conference in April where sports and internet wagering were debated and the resolution voted on by the membership.
When NIGA’s working group on sports betting met in Las Vegas in May, the meeting was closed to the press.
“We didn’t want the press in the room,” a member of the working group said.
“The tribes could do a better job reaching out to the media,” Stutz says. “The media could do a better job trying to understand tribal issues.”
“It’s a fair criticism. It’s an ongoing challenge,” Allen says. “Some tribes are better than others when it comes to responding to press inquiries. There has to be a stronger effort.”
Many tribes are in the process of rebuilding their communities, and their elected leadership is preoccupied with governmental issues.
Meanwhile, where tribes once operated in a bilateral relationship with the federal government, gambling has forced them to work more closely with state and local authorities.
“Tribes and their leaderships are being pulled in multiple directions,” Allen says.
Responding to the press is seldom a priority.
“I think most tribes are just too busy to deal with it,” Trahant says.
A number of tribal leaders are inexperienced and uncomfortable dealing with the media, Allen says, and need training in dealing with reporters.
“There are only a few of us who are comfortable talking to the media,” Allen says. “We don’t have enough people stepping up and talking and being more active.”
Some tribal leaders are discouraged from talking to reporters by their attorneys and consultants. Others have a deep-seeded distrust, if not resentment of the press.
“There’s hubris that it’s none of (the media’s) business. The media has no right to ask questions or deal with their lives,” Symington says. “You don’t take the attitude that it’s in the tribe’s best interest to open up to non-Indians. They don’t necessarily see it that way.”
“Tribal leaders are very suspicious of the media,” says a tribal consultant who requested anonymity. “There’s very little trust there. They get negative coverage. They get biased coverage. They get coverage that’s not fair.
“Tribes are engaged at the government relations level. Tribes don’t feel any great need to be engaged with the media. They know the interactions that count are the interactions they have with Congress and state legislators.”
IGRA Old News in Indian Country
Tribes look for an edge, even if it means going commercial
An increasing number of American Indian tribes are considering operating sports books and other expanded gambling as commercial ventures taxed and regulated by the states, shedding themselves of regulatory limits under federal law, according to industry sources.
The trend parallels the growing number of tribes purchasing commercial casinos both in the U.S. and foreign countries.
“Tribes are seeing beyond their reservation boundaries and beyond what they can do under IGRA,” says a tribal lobbyist, referencing the Indian Gaming Regulatory Act. “They are looking for commercial investments.”
“Absolutely,” says Victor Rocha, president of Victor Strategies and owner of the Pechanga.net news service. “If you can’t make it happen on the rez, go commercial.”
IGRA provides a regulatory framework under which tribes can operate government casinos on tribal trust lands, exempt from taxation and with primacy for regulating gambling operations.
But IGRA requires tribes seeking new forms of gambling such as sports wagering to negotiate new or amended tribal-state regulatory agreements, or compacts. The process can be fraught with legal and political uncertainties, including state demands for a share of revenues.
There is also a legal cloud over whether tribes under IGRA can accept wagers from beyond reservation borders, potentially hindering efforts to embrace mobile wagering. Online gambling legislation is being pursued in several states, largely through lotteries.
Sports books are normally low-margin operations, but they can be more profitable with online and account wagering. Most pending bills to regulate sports wagering have a mobile or online component.
“IGRA is a golden yoke around our neck,” Rocha says. “Once sports betting goes mobile, tribes are screwed by IGRA. They’ll have to go commercial.”
Then there are the potential legal and political complications in amending or drafting new tribal-state compacts.
“That presents a unique challenge for Indian nations under IGRA,” attorney Daniel Wallach told an audience at Indian Gaming 2018, the trade show of the National Indian Gaming Association, last April in Las Vegas.
“Commercial casinos may be able to hit the ground running while the vast majority of tribes are going to be delayed by the compacting process.”
For several years, California tribes have debated offering online poker as a commercial venture, sharing licenses with card rooms. They are undecided about sports betting.
“California is split, with some saying this would be commercial and others saying this would be tribal gaming” under IGRA, says Susan Jensen, executive director of the California Nations Indian Gaming Association. “I don’t think there is a lot of agreement as of yet.”
Tribal Debate Ongoing
Tribes are debating how to leverage their $31.2 billion casino industry to take advantage of the new legal sports betting market.
NIGA, the trade group and lobby for some 500 tribal casinos in 29 states, in April joined the American Gaming Association, the commercial casino lobby, in seeking repeal of PASPA. One PASPA provision prohibited sports betting on Indian lands.
A NIGA resolution called for any enacting sports betting legislation at the federal or state level to recognize tribal sovereignty, IGRA tax exemptions and exclusivity provisions of tribal-state regulatory agreements, or compacts.
“Everybody in our industry is ready to mobilize and make sure we are being treated fairly under the law,” NIGA Chairman Ernie Stevens said after the resolution was voted on by the membership. “We want to do what we can to embrace our gaming market.
“It’s an opportunity to attract more customers and hire more people,” Stevens said. “It’s not about gambling. It’s about jobs.”
Tribes Welcome AGA Alliance
Most tribes applaud the partnership with AGA, despite the competitive history between the commercial and tribal casino industries and initial snafus made by the association in putting together its anti-PASPA website.
“To Geoff Freeman’s credit, he works hard at being inclusive,” Ron Allen, chairman of both the Washington Indian Gaming Association and Jamestown S’Klallam Tribe, says of the AGA president and CEO. “Geoff is clear that the tribes are engaged in the industry as governments and have a different mission than commercial operators. I think he respects tribal governments.”
Two tribal governments and eight Native American casino enterprises have joined AGA, some to monitor sports wagering and expanded gambling and others to pursue commercial casino ventures.
Some tribes who have joined AGA—the Poarch Band of Creek Indians of Alabama, Florida’s Seminoles, the Oklahoma Cherokee and Mashantucket Pequots and Mohegan tribes in Connecticut—have acquired commercial operations in the U.S. and on foreign soil.
Tribal gaming revenue growth has been flat with a maturing market and diminishing availability of trust lands.
“One of the biggest fears about Indian gaming is that it’s uncontrolled and growing too fast, which I think is largely unfounded,” says economist Alan Meister, author of the Indian Gaming Industry Report.
“A proper analysis of the impacts of Indian gaming reveals that there are strong benefits to surrounding communities.”
Tribes moving away from IGRA and joining AGA are not abandoning their sovereignty. It is common for tribes to invest in commercial businesses. As with government casinos under IGRA, revenue from commercial ventures is also used to benefit indigenous citizens.
The small profit margins limit the number of tribes willing to pursue stand-alone sports books to a few more lucrative operations in urban areas.
Others fear sports betting will create competition from commercial casinos, racetracks and lotteries getting into the business.
“Most tribes see it as a threat to cut into profits in an already competitive industry,” says a tribal lobbyist. “Then you have a very small handful of tribes that see it as an added amenity.”
While many tribes in the West and Southwest are more willing to embrace commercial gambling and an alliance with AGA, those in the Midwest and Great Plains are more cautious about blurring the distinction between commercial and tribal casinos.
The Mashantucket Pequot and Mohegan tribes of Connecticut, meanwhile, are challenging the state in efforts to preserve exclusivity to offer sports betting under the tribal-state compact.
“Tribes have spent many lobbying dollars drawing a bright distinction between tribal gaming for governmental purposes and commercial gaming,” says a Midwest tribal consultant who requested anonymity.
“You might find California tribes buying into it because they have a different perspective on things than the treaty tribes.”
Gambling does not have a significant impact on many large-enrollment tribes in the central U.S.
“We don’t have that same level of investment. We don’t want to move away from our model” of operating under IGRA, says a lobbyist who also requested anonymity. “We don’t believe the commercial people have anything good to offer us. There is a difference of opinion on what is the best option to go forward.”
Rocha welcomes the debate.
“That’s the beauty of Indian Country. It’s multi-pronged. It’s not monolithic,” Rocha says. “That’s why Indian Country is going to succeed.
“California’s position is different than Minnesota. They have to pursue a different solution. That’s what makes Indian Country stronger. Indian Country has all bases covered.”