Within a massive packet of proposed updates to federal regulation of Class III tribal-state gaming compacts lie several sentences that could dramatically change the face of digital gaming across the U.S.
Most immediately, if the proposed rules are adopted, they potentially could negate a lawsuit brought against the U.S. Department of the Interior by two Florida parimutuels and allow Florida’s Seminole Tribe to offer statewide digital sports betting and iCasino. In addition, the proposed rules could allow for tribes to purchase land, put it in trust, build a casino, and then provide the same types of online gaming, all without being taxed by the state on those lands.
All eyes in tribal gaming are on what could prove to be the biggest shift in gambling since the federal Professional and Amateur Sports Protection Act was overturned in 2018 and states began offering retail and digital betting.
When the Supreme Court rejected PASPA, it made legalization of sports betting and iCasinos a states’ rights issue. Should the new proposals from the U.S. Bureau of Indian Affairs (BIA) become regulations, they, in turn, would essentially turn sports betting and iCasino adoption into tribes’ rights issues. The process of getting to market would be more streamlined, and it likely could clarify tribes' ability to offer statewide mobile wagering.
The proposed rules also include many minor changes that would further assist in the implementation of the Indian Gaming Regulatory Act (IGRA). In fact, stakeholders say, the original intent of the update to the rules was to handle mostly non-substantive changes brought on by the evolution of gaming and technology. But the proposed update also appears to include at least three major changes:
- Tribes could offer digital sports betting and iCasino throughout the state within which they are located, as long as such games are included within the tribal-state compact, and in some cases without a commercial license.
- States that do have any form of legal Class III gambling likely would have to negotiate each Class III game with tribes, including digital gaming, which is not currently directly addressed in IGRA. Some court decisions have suggested that if a state permits any form of Class III gaming within the state, then “all” forms of Class III gaming may be negotiated through compacting, which in today’s landscape could potentially include digital.
- Tribes would be permitted to purchase new land (in fee), but would need to go through a formal process before the land is judged to be “held in trust” and available to gamble on under IGRA.
“I see this as fixing the whole thing,” one attorney, who specializes in tribal gaming law but wished to remain anonymous, told 'in reference to the current Seminole-related litigation.
“IGRA only governs on tribal lands, so this appears to be intended to fix that lawsuit. The Seminoles and others likely brought a lot of resources to seek these changes. … If these changes go through, it likely would permit them to offer wagering off reservation under the compact they negotiated with the state of Florida.
“Tribes could possibly offer mobile gambling throughout the state without a commercial license. They’d still need a compact. … These proposed rule changes could be challenged procedurally and for substantive grounds. There have been many efforts over the years to try and amend IGRA, but those efforts have not succeeded.”
Public comment period just ended
At least 16 entities from casino associations to tribes offered comment on the proposed updates before a public comment period closed last Wednesday. Now the BIA and the U.S. Department of the Interior (DOI), which is tasked with reviewing tribal-state compacts, must review comments and determine if they will incorporate any into the proposal.
Among those who offered comments are the Seminole Tribe, which submitted 12 pages of comments in general support of the BIA’s proposed changes. The Seminoles wrote that “compact provisions allocated jurisdiction are permissible under IGRA when the parties are allocating jurisdiction over activities directly related to gaming activities on Indian lands.”
The tribe added its belief that remote wagering “is also clearly authorized by IGRA and is fully consistent with IGRA’s provisions allowing allowing states and tribes to negotiate over the allocation of jurisdiction.” While the tribe believes that compacting involving remote wagering is already acceptable, it stated that the updated regulations could clarify that.
It could be months before the new regulations are formalized. There could be an additional public comment period on any proposed revisions, and once set, the rules must be published in the Federal Register for 30 days before they become active. There’s also a possibility of litigation from the commercial sector if any or all of the above three changes are incorporated in the final document.
How Indian gaming is governed
Among the non-substantive proposed changes, the BIA would:
- Add and define the phrase “gaming spaces,” which would be different from previously defined “gaming facilities.”
- Protect tribes from a state demanding a “tax, fee, charge, or other assessment” for offering wagering.
- Clarify the difference between a “compact” and an “amendment” and the process of submitting agreements to the DOI secretary for determination.
- Allow tribes to submit compacts electronically in addition to hard-copy submissions that have traditionally been mailed or delivered.
- Clarify language around whether the DOI secretary must actively disapprove a compact in order for it to fail, as well as reiterate that a compact that is “deemed approved” with no signature is only approved if it is “consistent” with IGRA.
To give some context, IGRA is the federal law and framework that govern tribal gaming. The view from Indian Country is that IGRA protects tribal sovereignty, while the view from outside Indian Country is that IGRA keeps Indian gaming on tribal lands. The nuanced difference in those views has to do with whether IGRA protects tribes or whether it limits them.
The DOI serves as the federal arbiter of IGRA, while the National Indian Gaming Commission (NIGC) and Bureau of Indian Affairs act as regulators. The NIGC is most often the enforcer when it comes to IGRA and Indian gaming, while the BIA deals more with land issues and compacting.
The NIGC and BIA jointly administer IGRA, but not as equal partners. As gaming has evolved over the years, IGRA has remained static, but many bulletins around how to implement IGRA have come from the NIGC. The proposed changes were initially an attempt to codify the group of bulletins that have grown in volume and scope over the years.
IGRA became law in 1988, well before the personalized computer age, and some say it thus leaves much open to interpretation. The law was written in response to the 1987 Supreme Court decision that allowed the Cabazon Band of Mission Indians and Morongo Band of Mission Indians to offer bingo in California. It was passed by Congress in relatively short time — the SCOTUS decision came on Feb. 25, 1987, and IGRA was published on Oct. 17, 1988 — and some say it was designed to stop Indian gaming where it lay in 1988.
“Let’s just assume that if [the proposed new regulations] were to pass and clear all judicial hurdles, it means tribes won't need to apply for state licenses to conduct mobile gambling in states where it’s legal,” James Lewis, an associate at Duane Morris LLP, told . “Right now, under IGRA, tribes are disadvantaged by state regulation of mobile gambling, because the gambling must occur … completely on Indian lands or it’s subject to state law vs. on state lands.”
IGRA attempts “to control the expansion of Indian gaming,” Lewis continued. “By its own provisions, there’s an argument that IGRA was intended to freeze gaming as it was in 1988.”