Charitable Gaming Clashes With North Dakota Tribes Over Online Gambling

October 24, 2022
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Efforts by North Dakota’s five Native American tribes to secure exclusive rights to offer internet gaming and sports betting would devastate the charitable gaming industry in the state, lobbyists and members of veterans organizations told Republican Governor Doug Burgum on Friday.

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Efforts by North Dakota’s five Native American tribes to secure exclusive rights to offer internet gaming and sports betting would devastate the charitable gaming industry in the state, lobbyists and members of veterans organizations told Republican Governor Doug Burgum on Friday (October 21).

The tribes and the governor have been negotiating five new compacts that would introduce internet gaming and allow for mobile gambling within the boundaries of the reservation.

Burgum said the terms of the compacts are still being negotiated and should be finished next month. The state’s tribes operate under gaming compacts that were first signed in 1992 and need to be renegotiated every ten years.

Ryan Norrell, general counsel with the governor’s office, said the proposed compacts would allow the tribes to accept debit and credit cards for cashless gaming but would not allow casinos to extend credit to customers.

The compacts also lower the legal gaming age to 19 from 21 years old and would require each tribe to contribute $25,000 annually to the state’s problem gambling fund.

The current compacts expire at the end of 2022.

During Friday’s public hearing at the state capital in Bismarck, tribal employees argued their casinos have been hurt by the expansion of electronic pull-tab machines, which were legalized in 2017.

North Dakotans spent almost $1.75bn on electronic pull-tabs in fiscal year 2022.

If approved by the U.S. Department of the Interior, the compacts would allow North Dakota residents to wager on sports or play casino games using their mobile devices which would then go through servers located on tribal land.

Mike Motschenbacher, executive director of the North Dakota Gaming Alliance, told Burgum that by allowing tribes to have exclusive access to internet gaming and sports betting it would “decimate the charitable gaming industry.”

Charitable gaming this year will provide $43m in state tax revenues, Motschenbacher said.

“We question why the governor’s office would be wanting to create a monopoly,” he said. “This is what this is essentially doing by allowing one group or one organization to provide a service. There are laws against monopolies.”

Motschenbacher added that charitable gaming interests have read the proposed compacts and did not “see anything in there that specifically said what tax dollars will be paid to the state if internet gambling and sports betting is allowed.”

He went on to say that they want both charitable and tribal gaming to succeed, but “this compact, we believe, tips those scales greatly against us.”

“And it is absolutely going to decimate our industry.”

Motschenbacher said tribes already have an advantage with gamblers due to their casinos. That statement drew an aggravated response from the governor.

“I don’t think the data would support your assertion that the tribes have an advantage because of the expansion of the pull tab machines across the state,” Burgum said. “The five tribes are way down and charities are way up. If you are going to make statements, we should back them up with data.”

Motschenbacher apologized but reminded the governor and his staff that tribal casinos can offer roulette wheels, table games and slot machines, games which are not available to charitable gaming.

He argued that tribes could increase their gaming revenues by more aggressively marketing their properties.

Representatives from tribal casinos and their trade association testified that the convenience and widespread availability of e-tabs have had a significant impact on revenues.

Cynthia Monteau, executive director of the United Tribes Gaming Association, said gross proceeds from e-tabs since 2018 have exceeded $4bn.

“It’s pretty hard to say the scales are tipped in favor of the tribes,” Monteau said. “It’s pretty hard to say that.”

She said the tribes came to the negotiating table looking at how “we can present a win-win situation.”

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