Legal sports betting and tribal interests

A Supreme Court decision in May 2018 ended the federal ban on sports betting in the US. Since then, eight states have opened sportsbooks and many more states will follow suit in the near future.

Many international sports betting operators and commercial casinos have great interest in sports betting in the US, the interest from tribal casinos has not been significant.

A lot of tribes appear to not be overly keen with opening sportsbooks. Sportsbooks have high setup and maintenance costs, along with slim margins.

With sports betting, gamblers use other gambling facilities, which could have a significant impact on tribal gaming revenues. Some tribes will favor the idea of legal sports betting only if they have the exclusive ability to offer it.

Tribes have a lot of political influence in many states, which is why they have a significant impact on the future of legal sports betting.

Influencing policy decisions

In a lot of states, tribes are treading carefully with sports betting. Some are vehemently fighting against its introduction, whereas others want to take a slow approach to see how it might fan out in other states.

In many states, tribes have exclusive agreements that allow them to operate casinos and other types of gambling. They fear that these agreements could be put into jeopardy with an open sports betting market.

Talking about the role of the tribes in key decision making on a statewide level, a gambling interest lobbyist, Bill Pascrell III says: “The tribes have a major-league seat at the table.”

In Minnesota, for example, 21 tribal casinos are operating. They donate millions each year to political campaigns. They do not want mobile gambling to become legal or for sports betting legalization going forward. They have a lot riding on their gaming interest.

The Minnesota Indian Gaming Association’s executive director, John McCarthy, recently spoke about how gambling is “the only successful economic development tool the tribes have ever had.”

While bill for sports betting legalization have been proposed in states such as Texas, Washington, and Arizona, tribal interests have largely squashed any hope of this happening.

Some major states, such as Florida and California, are not even considering any sports betting bills. A constitutional amendment would likely be required in California for sports betting legalization.

Case of Florida

The passage of Amendment 3 in Florida during the November 2018 midterm elections was a big win for the tribes in the state.

The passage of that amendment means that any proposed gambling expansion has to be approved to a public vote. Therefore, politicians will not be able to create expansionary laws on their own.

Along with Disney, which has a large interest in Florida, the Seminole Tribe was a major contributor to the campaign for Amendment 3 passage. They gave donations of more than $24m (￡18.4m) during the course of the campaign.

While there are more than 80 tribal gambling facilities in Florida, the Seminole Tribe dominates the gaming sector. They have an exclusive agreement with the state government making them the only tribe in the state that can offer card games.

They also are the only provider of slot games in the state, except for a handful of exceptions. This relationship has been very good for the state that gets about $350m (￡268.4m) in tax revenue annually from the tribe.

Amendment 3 makes it extremely tough for any sports betting bill to come to fruition and to infringe upon the Seminole Tribe’s activities.

Is there any tribal support?

There are some states where tribes embrace sports betting.

In New Mexico, for example, sports betting is already offered by tribes. They used a loophole in the state’s tribal gaming laws and did not have to get permission from the state. There was no legal challenge from the state and the compact is in place until 2037.

The Santa Ana Star Casino Hotel in Bernalillo (approximately 10 miles from Albuquerque) became the first facility in the state to offer sports betting in October 2018.

The Mashantucket Pequot and Mohegan Sun tribes in Connecticut are the only providers of casino gambling in the state. They are working with the office of the governor to open sportsbooks.

The Eastern Band of Cherokee Indians is championing a bill in North Carolina that would allow them to provide horse and sports betting at their two casinos.

In Arizona, there are tribes on both sides of the debate. The Navajo Nation wants to have the exclusive right to provide sports betting outside of their reservations. However, other tribes in Arizona oppose this move. They believe offering sports betting in non-tribal clubs and bars would have a significantly negative impact on the on-reservation facilities.