How Sports Betting Upended the Economies of Native American Tribes

For many Native American tribes, gambling has long been their primary source of income. The fast growth of internet gambling and sports betting is now endangering that economic lifeblood in many areas of the nation. The influential Seminole tribe in Florida negotiated a lucrative agreement to provide sports betting solely in the state, only to have the agreement thwarted by a lawsuit from casino businesses. One tribe in the Upper Peninsula of Michigan reported a significant drop in gaming revenue last year as a result of the unrest in the internet betting industry.

After Florida’s Seminole tribe launched a bingo hall in the early 1980s, tribal gaming gained traction as a way to compensate for severe federal budget cuts made to Native American tribes during the Reagan administration. The Supreme Court decided in 1987 that tribes could hold gaming operations on their own territories. Since then, 243 federally recognized tribes in 29 states have seen casino gaming grow into a $39 billion industry. However, the Supreme Court invalidated a federal rule that forbade the majority of sports betting outside of Nevada in 2018. This led 32 states, including 22 states with tribal casinos, to legalize sports betting.

A combination of rapidly expanding internet platforms like DraftKings and FanDuel and venerable casino operators like Caesars Entertainment and MGM Resorts International have flooded the market. To obtain favorable deals in state capitals, businesses have sent out legions of lobbyists, showered lawmakers with gifts and campaign contributions, and occasionally dubious data.

As large casino businesses enter the fray, some tribes are seeing their money erode. In other cases, tribes are losing their advantageous position to benefit from the anticipated rise of online gaming in general.

W. Ron Allen, head of the Washington Indian Gaming Association and a former leader of the National Congress of American Indians, asserted that “the corporate sector has always coveted what the tribes have.” They are therefore considering strategies to force the tribes out.

“We Were Wearing Our Prom Dress”

The National Indian Gaming Commission was created by the Indian Gaming Regulatory Act, which Congress passed in 1988. Compacts, sometimes known as agreements, were necessary for tribes to have with states in order to allow certain forms of gambling on their territories.

The Hannahville Indian Community and six other tribes received “the sole right to conduct electronic games of chance” as a result of a 1993 agreement made by Michigan.

The Hannahville tribe’s 543 members became less reliant on government aid thanks to casino winnings. According to census data, today’s typical household income of $40,000, which is slightly greater than half the national average, is higher than that of many Michigan tribes.

Over the protests of the tribes, gambling was allowed to grow twice in Michigan: once in 1996 to enable commercial casinos in Detroit and once more in 2003 to allow gambling in bars and restaurants.

Then, in 2019, state officials approved internet betting for sports and other casino games including slots and blackjack with the support of major industry players. Although the deal was outside the scope of the Indian Gaming Regulatory Act, the tribes were still permitted to participate in the new services but were treated similarly to non-tribal gambling businesses.

In an interview at the Hannahville tribe’s Island Resort and Casino, which is about 100 miles north of Green Bay, Wisconsin, chief financial officer Scott Herioux said: “If you’re a remote tribe that doesn’t have a large population, and your competitive advantage was, ‘We have slot machines,’ well, that’s taken a hit now.

When widespread sports betting was allowed, Hannahville and other Michigan tribes were given an option. They might start their own sports betting operation. Instead, a lot of them set up alliances with outside businesses that already have skills in software, marketing, and placing sports wagers, as well as the willingness to take on a lot of risk. A select few tribes that collaborated with the largest operators, such as the Bay Mills Indian Community and DraftKings, have prospered.

The Kentucky Derby is held at Churchill Downs, and the Hannahville tribe collaborated with that organization’s TwinSpires division. However, TwinSpires terminated the agreement and stopped offering other types of online gaming in February of last year. In a “very competitive” market, corporate managers claimed they did not see a way to profitability.

General Manager of Island Resort Tony Mancilla admitted, “We were kind of astonished.” “We didn’t have a date, but we were wearing our prom dress.”

Online betting in Hannahville came to a complete halt. Eventually, the tribe found new allies in the Israeli business 888 and Sports Illustrated. Other types of internet betting have not restarted, only online sports betting. As a result, according to state data, Hannahville’s internet gambling revenue fell precipitously from $16.7 million in 2021 to $5.8 million in 2022. As a result, the tribe’s entire gaming revenue decreased by more than 12% in 2017.

The tribe is making investments in its golf courses and real estate as the long-term viability of betting is in question.

Its gambling “won’t be able to support itself forever,” according to Kenneth Meshigaud, the longstanding tribal chairman. For many years, the only forms of gambling allowed in North Dakota were slot machines and a few table games in 11 tribal casinos, which brought in roughly $250 million a year for five tribes. The state opposed the prevalence of gambling there becoming as high as in other places like Nevada.

Then a fresh offering appeared. Beginning January 2017, bars, gas stations, and other local businesses were permitted to provide betting through electronic pull tab machines, which resemble slots and operate similarly.

In the fiscal year that concluded in June 2022, the machines brought in $182 million in total revenue. Nowadays, there are more electronic pull tab machines in non-tribal establishments than there are slots in tribal casinos. Get the Sports Newsletter by subscribing Receive every week’s most ambitious initiatives, news, and analyses straight to your email. Have it delivered to your inbox. Devastating effects include the loss of up to 70% of the tribe’s income and 70% of its employment for the Mandan, Hidatsa, and Arikara Nation. Mark Fox, the tribe’s chairman, said in an interview in Bismarck, the state’s capital, “We were battered down so severely it wasn’t even funny.”

Government authorities resisted. Tribes required a new deal to maintain their casinos since the tribal compact was about to expire. Republican governor Doug Burgum used that power to pressure the tribes into accepting a solution that was unfavorable to them. Only on tribal territories would they be able to provide online gaming and sports betting.

Legislators for the state claimed that tribes had plenty of other ways to make money while simultaneously introducing legislation that, if approved by voters, would let commercial businesses to offer sports betting throughout North Dakota.

Republican state representative from Fargo James M. Kasper remarked, “They have the large casinos where folks can go stay overnight, have dinner, and have beverages.” They are the only organizations that own those brick-and-mortar structures.

The tribes’ portion of the state’s gambling sector is probably going to get significantly less if the proposal passes. An agreement from 2003 restricted gambling to 22 tribes in Arizona 먹튀검증 카지노사이트. A new agreement that would grant teams and commercial casinos the opportunity to create sports books and accept mobile bets was pushed for a few years ago by Doug Ducey, the state’s Republican governor at the time, with the support of steadfast allies from the state’s major sports clubs.

The largest tribes joined in as well, partly because they could accept sports bets and provide a greater variety of casino games including baccarat, craps, and roulette. Additionally, they were permitted to construct additional casinos because they wished to draw tourists.

Jeremy Kudon, a lobbyist at the prestigious law firm Orrick who led a nationwide campaign on behalf of some of the biggest sports betting platforms and professional sports leagues, was one of those who contributed to the creation of the legislative agreement in Arizona. His attempt to negotiate compromise agreements was a significant component of his strategy.

In April 2021, Mr. Ducey attended a signing ceremony at Phoenix’s Heard Museum, which is devoted to American Indian art. Arizona launched sports betting five months later, in preparation for the 2021 N.F.L. season.

Licenses were promised to the major professional sports organizations. They partnered with the best national commercial casinos, gained a head start, and spent a lot on client attraction.

In contrast, 16 tribes competed for 10 licenses and were forced to submit ideas, make a $100,000 nonrefundable application fee payment, and screen potential partners before they could even start attempting to draw bettors.

Before taking office as a judge in November, Charlene D. Jackson, a veteran attorney representing a number of the tribes, said, “Quite frankly, we were left behind.”