Federal Regulations Alter Landscape for Tribal Gaming Compacts

On February 21, updated federal regulations regarding Indian gaming compacts were unveiled by the Bureau of Indian Affairs (BIA) under the US Department of the Interior (DOI). These regulations, slated to take effect on March 22, mark a significant development for Indian tribes across various states, albeit with disparate impacts depending on regional dynamics.

Key Points

1. Federal regulations published by the Bureau of Indian Affairs (BIA) offer clarity on Class III gaming compacts under the Indian Gaming Regulatory Act (IGRA), particularly regarding online gaming.
2. The inclusion of online gaming in compacts presents tribes with new opportunities, especially in states like California, Oklahoma, and Washington, where an IGRA approach may be economically viable.
3. However, limitations within the regulations leave some tribes at a disadvantage, particularly in states where commercial interests dominate the online gaming market, raising concerns about equitable opportunities for tribal gaming enterprises.

The final rules aim to bring clarity to tribes and states regarding the scope of Class III gaming compacts permitted under the Indian Gaming Regulatory Act (IGRA). Notably, one key clarification is the approval of compacts encompassing online gaming beyond Indian lands, as explicitly stated in the regulations.

Alex Weldon from Bonus.com provided an initial analysis of the final rules, juxtaposing them with earlier draft proposals. Furthermore, discussions with stakeholders, including a California tribal leader and a tribal attorney, shed light on the potential ramifications of these regulations on the future landscape of tribal online gaming.

A pivotal precedent was set in 2021 when the Department of the Interior approved the Seminole Tribe's compact with Florida, which included statewide online sports betting. This landmark decision solidified the pathway for tribes to engage in online sports betting and casino gaming under IGRA, contingent upon compliance with state laws and compact agreements designating betting locations on tribal lands.

Previously, tribes seeking to partake in statewide online gaming often resorted to commercial agreements with states, a model adopted in Michigan, Arizona, and Connecticut. However, the recent regulations offer tribes alternative avenues, potentially reshaping the online gaming landscape.

Tribal gaming attorney Scott Crowell highlighted states such as California, Oklahoma, Washington, Wisconsin, Minnesota, New Mexico, North Dakota, and South Dakota as prime candidates for tribes to explore online gaming through the IGRA framework. This approach not only ensures tribal exclusivity but also safeguards their economic interests, given IGRA's limitations on management service provider contracts.

“Crowell predicted that tribes in California, Oklahoma, Washington, Wisconsin, Minnesota, New Mexico, North Dakota, and South Dakota could take a serious look at doing online gaming through the IGRA model.”

California, with its myriad tribes and vast geographical expanse, stands out as a prime example where an IGRA-based approach holds substantial promise. James Siva of the California Nations Indian Gaming Association expressed contentment with the regulations, emphasizing their alignment with the Seminole model, which resonates well within the state's tribal community.

However, challenges persist in states where the 40% limitation on management service providers under IGRA proves prohibitive. In North Carolina, Massachusetts, and Arizona, tribes may find themselves sidelined by commercial interests, unable to secure viable partnerships under IGRA constraints.

Conclusion

Moreover, the final rules omitted provisions requiring states to negotiate with tribes for online gaming parity in cases where commercial online gaming is legalized. This omission poses challenges for tribes in states like Indiana, Iowa, and Oregon, where online sports betting has gained traction without adequate tribal consultation.

Despite these omissions, the regulations represent a pivotal step forward in delineating the contours of tribal gaming compacts in the digital age. While certain states may benefit more than others, the overarching aim remains to empower tribes in navigating the evolving gaming landscape while preserving their sovereignty and economic interests.