Kansas Lawmakers Warned Of IGRA Violation With Tribal Sports-Betting Bill

March 29, 2023
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A bill that would allow federally-recognized tribes in Kansas to negotiate gaming compacts with the governor for mobile sports betting “outside the boundaries of Indian land” is being opposed by commercial casino operators who believe it would violate both state and federal law.

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A bill that would allow federally-recognized tribes in Kansas to negotiate gaming compacts with the governor for mobile sports betting “outside the boundaries of Indian land” is being opposed by commercial casino operators who believe it would violate both state and federal law.

Senate Bill 322 would repeal the prohibition of tribes offering “sports wagering beyond the boundaries of the compacting tribe’s Indian lands, within the meaning of the Indian Gaming Regulatory Act (IGRA).”

Kevin Fowler, an attorney with Frieden & Forbes in Topeka representing Kansas Crossing and Kansas Star casinos, said his clients were opposed to the bill, arguing that tribes were trying to change the “rules of the game” after the state’s casinos had invested “hundreds of thousands of dollars to get sports betting up and running.”

Currently, the state’s four casinos are permitted to offer both land-based and mobile sports wagering pursuant to a state law enacted last year. Further, casinos may also install wagering kiosks at partnering retail locations, while tribal operators need to execute or amend their gaming compacts to be allowed to offer land-based wagering at their tribal casinos.

Governor Laura Kelly, a Democrat, signed Senate Bill 84 in May 2022 legalizing retail and mobile wagering in Kansas.

Fowler said the tribes supported the land-based-only provision last year. He said SB 322 was also inconsistent with the Kansas Constitution which bans any form of Class III, casino-style gaming unless it is owned and operated by the state.

“Negotiate an agreement with the Kansas Lottery and you don’t even need a compact, you just need to be seeking a compact and then you’re entitled to enter into a sports-betting agreement with the lottery on the same terms and conditions as our casino managers,” Fowler said.

Fowler testified on Monday (March 27) during a hearing on SB 322 before the Senate Committee on Federal and State Affairs. The committee did not vote on the bill, and chairman Republican Senator Mike Thompson did not announce when he might schedule a vote on the measure.

Fowler warned the committee that the tribes are seeking authority from the legislature to “engage in state-wide sports wagering that is not owned and operated by the state.”

He said the state, if it chooses to, can always negotiate something more than tribes were entitled to receive but as a matter of federal law, IGRA expressly says the wager needs to be placed within the boundaries of Indian lands.

IGRA, passed by Congress in 1988 to govern tribal gaming activities, has been found by federal courts in California and more recently the District of Columbia to require both patron and server to be on tribal lands to qualify as a permitted form of Indian gaming.

Several states have negotiated a way around IGRA allowing tribes to operate state-wide mobile sports betting.

Michigan, Arizona and Connecticut tribes have all launched mobile wagering under a regulatory model that applies IGRA to retail sportsbook operations in tribal casinos on Indian lands but requires tribes to obtain state licenses to offer mobile wagers to patrons elsewhere in the state.

Neither Fowler nor Will Lawrence, the governor’s chief of staff, discussed the potential of state licensing as an alternative for tribes in Kansas.

Both tribal officials and the governor are monitoring the Seminole Tribe of Florida gaming compact case, where the U.S. Department of the Interior has argued that a state-tribal compact that allowed state-wide online sports betting is legal under IGRA.

The Seminole Tribe and federal government are waiting for a verdict by a three-judge U.S. Court of Appeals panel in Washington, D.C., after a lower court judge ruled in November 2021 that the compact was invalid as wagers could be placed by players beyond tribal lands, even though the betting servers would be located on the reservation.

Lawrence said he believed that Fowler had “jumped to a lot of conclusions even though there is a long way to go on this” in terms of discussions with the Prairie Band Potawatomi Nation, which requested that the bill be introduced in the Senate.

Lawrence acknowledged that there was federal law involved in their discussions with the tribes but any final agreement on a state-tribal compact would have to wait for a court decision in the Seminole case. He expected the case to eventually be heard by the U.S. Supreme Court.

“We are waiting for the Seminole case … before we know if that is possible or not,” said Lawrence. “If the Seminole case says you can accept wagers on a server on tribal lands even if the person accessing it is off tribal lands, then they can do it anyways.”

“If they come down and say you can’t do it, that’s not an appropriate interpretation of the law … then it’s over,” he said. “But this language is a barrier to us even talking about it right now.”

Lawrence assured the committee that the bill does not in any way expand gaming in Kansas that is not already authorized.

“This allows us to continue to have conversations to try to reach an agreement on the compact. We need to remove this so we can move forward with these conversations.”

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