ribal governments and commercial gambling companies are softening their opposition to legal Internet wagering, although it does not appear likely that pending legislation to permit online poker will be successful in the current session of Congress.
An association of California tribes has joined with the United South and Eastern Tribes in supporting federal legislation to legalize online gambling as long as it protects the rights of tribes operating government casinos under terms established by the Indian Gaming Regulatory Act of 1988.
“The legalization of internet (sic) gambling in the United States could be a disaster for tribal government gaming or it could be a wonderful new avenue for tribal economic development,” Chairwoman Leslie Lohse of the California Tribal Business Alliance said in a March 24 letter to Representative Barney Frank, author of legislation to legalize and tax online poker.
Lohse said she was concerned however, that federal legislation would conflict with tribal-state agreements established under IGRA that, in many states, give tribes the exclusive right to operate casinos. Tribal casinos have generated billions of dollars in revenue used to provide health care, education and other government services to indigenous Americans.
“We look forward to working with you to create legislation that clarifies federal law on internet gambling and protects the interests of tribal governments,” said Lohse, whose association represents nine California tribes.
CATBA, which previously opposed online wagering, is now taking a position similar to that of USET, a group of 20 tribes that late last year called for a study of the impact Internet wagering would have on tribal casinos operating under IGRA.
In a March 29 letter to Ernie Stevens, chairman of the National Indian Gaming Association, Frank said, “I intend that this legislation should have no impact on (tribal) compacts with states; that is, the bill should not in any way impair existing rights regarding compacts either currently in force or to be signed in the future.”
Meanwhile, the American Gaming Association, the lobby and trade association for commercial gambling companies announced on March 23 that it was shifting its view of legalized Internet gambling and now believes the technology exists to allow the activity to be regulated at the state or federal level.
In a new policy statement, the AGA said it was open to the concept of legalized Internet gaming, as long as a regulatory structure was in place to protect consumers and the game’s integrity. But the organization has not taken a stance on any of the bills now floating through Congress that could legalize all or some forms of Internet gaming, estimated to be a us$ 21 billion a year industry.
“If something were to start, then fundamentally this gives us a seat at the table,” AGA CEO Frank Fahrenkopf told the Las Vegas Review-Journal. “The majority of our board now has a favorable stance on Internet gaming, as long as there is strong regulatory control. But we’re not endorsing any of bills now in the loop.”
Many tribal governments and commercial casino companies remain concerned that online wagering would cannibalize brick-and-mortar casinos. Most tribal opposition to online wagering has come from California, which in 2008 accounted for us$ 7.3 billion of the us$ 26.8 billion won in 2008 by 442 government casinos operated by 237 American Indian tribes and Alaska Native villages in 28 states.
The Tribal Alliance of Sovereign Indian Nations (TASIN), a group of 14 Southern California tribes operating some of the state’s most lucrative casinos, are opposed to online wagering. The California Nations Indian Gaming Association, comprised of 25 casino and non-casino tribes, has also expressed concern about nationwide legalization of online gambling.
Internet gamblers are primarily poker players and sports bettors. Poker and skilled table game gamblers represent less than 15 % of the revenue generated by most casinos. Proponents of online gambling content tribal governments and commercial casino companies would benefit from the legalization of online wagering.
Harrah’s Entertainment, the world’s largest casino company, is lobbying for legalization of online wagering. Steve Wynn, operator of Wynn Resorts in Las Vegas and Macau, is opposed to online wagering. Online wagering on Web sites operated from South and Central American generate about us$ 21 billion a year in revenue, us$ 5.9 billion from US gamblers.
There is little widespread bipartisan support for three pieces of online legislation sponsored by Frank and others in the House and Senate. With no support for the legislation from tribes and the commercial casino industry it is not likely Senate Majority Leader Harry Reid, will allow a bill to come to the floor. “It’s just not anything they (legislators) want to deal with this year,” CATBA Executive Director Allison Harvey said.
The Federal Wire Act of 1961 prohibits interstate wagering through the use of telecommunications, but the act is rarely enforced and, some believe, does not apply to use of the Internet. The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 bans the use of credit cards in paying off online wagers.
The issue of Internet wagering is not on the front burner with most tribes, particularly with such pan-Indian issues as taxation, health care, land/trust policy and finding a congressional fix to the Supreme Court ruling on Carcieri vs. Salazar. But the issue is volatile in California, where the Morongo Band of Mission Indians is proposing an alliance with Los Angeles area card clubs in the establishment of an intrastate online poker Web site.
CATBA and others are opposed to the concept, which they contend would violate the tribal-state agreement, or compact, allowing tribes the exclusive right to offer legal casino gambling. The Morongo proposal for a statewide online poker site is not expected to be any more successful than Frank’s proposal in Congress.
However, tribal lobbyists suspect Frank will attempt to run Internet legislation through Congress as a rider to another piece of legislation, greatly increasing its change of passage in the current session. Regardless of how Internet legislation fairs in this session, gambling industry observers believe online wagering soon will be legal throughout the United States.
Tribal leaders are expected to put together a policy position on Internet wagering at the National Indian Gaming Association annual conference April 6-9 in San Diego. “There has always been this feeling that we’re not going to be able to stop it,” a Capitol Hill tribal consultant said of online gambling. “It’s important that tribes be on equal footing with states in terms of regulatory authority. It’s important that we not lose all the economic gains we achieved through IGRA.”