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As Louisiana this week becomes the latest state to host sportsbooks in tribal casinos, the federal regulatory agency for Indian gaming has cautioned that proposed deals between tribes and sports-betting partners risk being disapproved unless the tribe retains clear control over the operation.
The National Indian Gaming Commission (NIGC) on Tuesday published a second advisory bulletin regarding partnerships between sports-betting companies and tribal casinos governed by the 1988 Indian Gaming Regulatory Act (IGRA).
The NIGC cautioned in January 2020 that partnerships in which a tribe’s partner can decide what bets to accept or reject would be considered a management contract under IGRA, while deals offering high fees to providers risked disapproval if they meant the tribe no longer retained “sole proprietary interest” in the sportsbook operation as required under IGRA.
In its new six-page guidance bulletin, the NIGC has advised that tribes should continue to write their own house rules and risk management policies and make their own marketing decisions regarding sports betting.
Tribes should also retain control over self-service betting kiosks and any training provided by its sportsbook partner, according to the NIGC.
Meanwhile, deals whereby third-party companies either fund the construction of a sportsbook or receive compensation only when sports betting becomes profitable are also problematic under IGRA.
So, too, are contracts of a long duration with a high share of revenue offered to the tribal partner, with a hypothetical 50/50 split suggesting “a partnership rather than provision of service to a tribe,” per the NIGC bulletin.
Speaking at this week’s Global Gaming Expo (G2E) in Las Vegas, NIGC chair Sequoyah Simermeyer said the new guidance follows a substantial increase in sports-betting related inquiries to the NIGC over the past 18 months.
“The NIGC’s guidance can help bring clarity to management and sole proprietary interest issues as they pertain to agreements,” Simermeyer said.
“If they so choose, tribes may develop appropriate partnerships that comply with IGRA’s regulatory framework and present an opportunity for new and sustainable growth that serves tribal communities and protects tribal assets derived from gaming.”
Sports betting has become a greater area of focus for the NIGC as more tribal casinos across a greater number of states expand into the market.
On Wednesday, Betfred and the Tunica-Biloxi Tribe opened Louisiana’s first legal sportsbook at the tribe’s Paragon Casino Resort, making Louisiana the 14th state where tribes offer sports betting as a form of tribal gaming.
In one of numerous recent partnerships between tribes and leading sports-betting companies, BetMGM on Monday announced a new agreement to offer retail sports wagering at casinos owned by the Puyallup Tribe of Indians in Washington State, following a similar deal inked by rival FanDuel with Washington’s Suquamish Tribe.
FanDuel and DraftKings last week opened co-branded sportsbooks in Connecticut’s two tribal casinos.
The NIGC does not directly regulate tribal sports betting but does have authority to approve or deny management contracts between tribes and outside partners in accordance with parameters set by IGRA.
The agency’s general counsel also routinely reviews proposed deals submitted by tribes and their partners seeking to obtain a so-called “declination letter” advising that they would not require a more formal layer of approval.
In August, the NIGC issued such a letter to Connecticut’s Mashantucket Pequot Tribe supporting the tribe’s proposed contractual relationship with DraftKings, having last year expressed concerns regarding an earlier version of the contract that would also have seen DraftKings store equipment for its Connecticut online sportsbook at the tribe’s Foxwoods casino-resort.
This week’s new NIGC guidance does not directly address the conduct of online sports betting by tribes, although that is an area where many in the tribal gaming industry would like to see greater clarity.
In August, the U.S. Department of the Interior tacitly approved a landmark compact between the state of Florida and the Seminole Tribe that permits the tribe to offer mobile sports wagering to players throughout the state via servers on tribal lands.
In contrast, state laws in Connecticut, Michigan and Arizona have all required tribes to obtain state licenses for off-reservation sports wagering, even as tribes conduct retail sports betting in their casinos as a form of tribal gaming under a compact.
