States, Tribes Diverge On Compacting Online Poker

Tribal-state gambling compacts could hinder efforts by American Indian tribes in the Southwest and Washington State from entering the emerging online poker market, according to tribal officials and authorities on Internet wagering.

Tribes in the Midwest and Great Plains are seriously considering interstate Internet coalitions that could prove to be a segue-way for Indian governments seeking an entry into online gambling in the absence of federal legislation.

Tribal-state regulatory agreements, or compacts, prohibit tribes in Washington State, with 23 casino tribes, and Arizona, with 15, from operating Internet gambling.

 

A proposed compact between the Navajo Nation and New Mexico, with 14 casino tribes, would enable the tribe to stop sharing slot machine revenue if the state legalized Internet gambling.

 

“This provision was intended to discourage the adoption of Internet gaming in the state,” said Enrique Knell, a spokesman for Governor Susana Martinez. 

 

Meanwhile, the Cheyenne-Arapaho Tribes of Oklahoma last week agreed to shut down their free-play PokerTribes.com website in exchange for an agreement with the state allowing them to offer a real-money site for non-U.S. players.

 

“Internet gaming is improper in Oklahoma,” where 33 tribes operate more than 100 casinos, Steve Mullins, general counsel to Governor Mary Fallin, told the Oklahoman newspaper.

 

“We basically are saying we will not expand gaming in Oklahoma on the Internet.”

 

Cheyenne-Arapaho and the state disagreed over whether the tribal-state compact allowed online wagering.

 

Sheila Morago, executive director of the Oklahoma Indian Gaming Association, said tribal attorneys are meeting to determine whether the tribal-state compact agreed in 2004 does prohibit online wagering.

 

“We are currently looking at that,” Morago said. “It’s not clear. We won’t know until the attorneys finish their analysis.”

 

The impact tribal-state compacts nationwide may have on the ability of tribes to enter the online gambling market is difficult to determine because no two compacts are alike.

 

“I don’t think anybody knows what impact they’ll have,” said Ehren Richardson, an Internet consultant to the National Indian Gaming Association. “These compacts are all over the place.”

 

Some 247 tribes operate casinos in 28 states. Twenty-three of the states have tribal-state compacts which give states limited regulatory authority over Indian casinos.

 

The compacts are required by the Indian Gaming Regulatory Act (IGRA) for tribes seeking to operate Class III, casino-style gambling. Most of the national debate on Internet gambling has focused on online peer-to-peer poker, a Class II game not generally subject to the compacts.

 

However, Arizona’s compact covers both Class III and Class II gambling, said Valerie Spicer, executive director of the Arizona Indian Gaming Association.

 

Washington’s compact only covers Class III gambling, but the issue of online poker has not been raised by the tribes.

 

“No one has ever proposed that so I can’t answer that,” said Ernie Stebbins, executive director of the Washington Indian Gaming Association.

 

California, the largest Indian gambling market with 59 tribes operating 60 casinos, is seeking to authorize intrastate Internet poker to guard what is believed to be the country’s most lucrative online gambling market.

 

Online poker in California is not subject to the tribal-state compact.

 

Tribal lawyers and lobbyists contend politics will play more of a role in the ability to offer Internet wagering than the language in the state regulatory agreements.

 

Tribes in many states have the political clout to amend compacts. The Internet prohibition in several compacts is lifted in the event state lotteries go online.

 

State law is generally not applicable to Indian lands, and it is not clear if the compacts prohibit tribes from taking wagers from gamblers outside the state.

 

Oklahoma is willing to let the Cheyenne-Arapaho offer online wagering to overseas gamblers. The Nevada Shoshone also announced last week their intention of offering an international gambling website.

 

Meanwhile, the Minnesota Indian Gaming Association meeting this week is expected to discuss an interstate Internet coalition with tribes throughout the Midwest and Great Plains.

 

“I’m going to propose a regional thing,” said association executive director John McCarthy, linking tribes throughout the Midwest and Eastern United States.

 

Kurt Luger, executive director of the Great Plains Indian Gaming Association, which includes 24 tribes in North and South Dakota, Montana, Wyoming, Nebraska, Kansas and Iowa, has long been an advocate of interstate Internet alliances. 

 

The Mohegan Tribe of Connecticut and Mississippi Choctaw have also expressed interest in an interstate tribal alliance.

 

The Mdewakanton (Shakopee) Sioux and Prairie Island Indian communities and Mille Lacs Band of Ojibwe Indians of Minnesota and the Oneida, Ho Chunk and Potawatomi Nation of Wisconsin are expected to provide leadership in the two states on the Internet issue.

 

“Shakopee is moving aggressively to get into the Internet space,” said attorney Tom Foley, vice president of Lowry Strategies, a Washington, D.C. government relations firm.

 

“I believe they see themselves as part of the lead in an interstate consortium, where other tribes could work through them.”

 

Although the larger, more lucrative gambling tribes are likely to take the lead, McCarthy said the smaller tribes also need to be players.

 

“My main concern is that we stay together and that the smaller operations don’t feel left out, that there’s a place at the table,” he said.

 

A joint online operation merging Minnesota and Wisconsin tribes could prove significant.

 

“That’s a winning combination, Minnesota and Wisconsin,” Richardson said. “Those two states alone are a fantastic start to an interstate consortium.”

 

As IGRA largely restricts gambling to Indian reservations, an interstate alliance of tribes on a poker website is not expected to generate the player liquidity to make a project economically successful.

 

But the Tribal Internet Gaming Alliance, a consortium of the Lac du Flambeau, Red Cliff and St. Croix bands of Lake Superior Chippewa Indians of Wisconsin, believe a consortium could contract with states where online gambling is legal, generating additional liquidity.