Pending Federal Rules Set To Give Tribes More Mobile Betting Options

January 10, 2024
Regulations from the U.S. Department of the Interior's Bureau of Indian Affairs that could streamline tribal efforts to expand into online gambling remain pending more than a year after their initial proposal.

Regulations from the U.S. Department of the Interior's Bureau of Indian Affairs (BIA) that could streamline tribal efforts to expand into online gambling remain pending more than a year after their initial proposal.

The BIA’s Office of Indian Gaming proposed formal regulatory changes for tribal gaming in December 2022 that, among other things, would expressly permit compacts that include provisions addressing state-wide internet sports betting or online casino gaming where either state law or the compact deem the bets to be accepted on a server located on tribal land.

If finalized, the rules could provide tribes with more security to pursue state-wide mobile betting through compacts, rather than alternative models that have been employed to allow tribes to offer online betting by waiving sovereign immunity for the limited purpose of obtaining a state license, as in Michigan, Arizona and Connecticut.

“In California, we view this very favorably, obviously,” said Dan Little, chief intergovernmental affairs officer for the San Manuel Band of Mission Indians, which has lobbied in support of the changes.

“If there was going to be some kind of expansion into online and mobile, it would only make sense that the tribal-state partnership that exists is kind of just built upon, versus creating something new.” 

“The great thing about tribal gaming is that tribes can’t pick up and move, the reservations have been there for thousands of years,” he added. “I think it works really well in other states for tribes and I think you’ll see more tribes kind of embrace it favorably.”

The concept of permitting tribes to offer mobile sports betting through compacts that deem the wager to take place on tribal lands remain the crux of ongoing federal litigation involving the Seminole Tribe surrounding its 2021 compact with the state of Florida.

In June 2023, the U.S. Court of Appeals for the D.C. Circuit reversed an earlier decision and upheld the compact, clearing the way for the tribe to relaunch sports betting later in the year.

The compact was deemed approved by the interior department in 2021, but adoption of the new regulations would expressly allow the federal government to affirmatively approve such compacts in the future.

“I think they’re helpful just in terms of providing that additional clarity for tribes in states across the country,” said Joe Webster, a partner with law firm Hobbs, Straus, Dean & Walker in Washington, D.C. who represents the Seminole Tribe. “And it’s obviously consistent with what the DC Circuit said.”

“I think in terms of other states, it's an option that's available,” he added. “I guess that's how we've sort of looked at this with respect to sports betting.”

The BIA said in formulating the rules that tribes and states have effectively become competitors in the gaming marketplace in ways the Indian Gaming Regulatory Act of 1988 (IGRA) could not have envisioned.

“The expansion of state lotteries and state licensed commercial gaming can place tribes and states in direct competition for market share,” the bureau said in 2022 in explaining the proposed rules. “Also, advancements in gaming technology and changes in state and federal gaming law since the passage of IGRA has shaped the compact negotiation process.”

“As a result, Class III gaming compacts have expanded in scope and complexity as the parties seek mutually beneficial provisions,” it continues. “However, IGRA did not anticipate the compact negotiation process would be between competitors, rather sovereign governments seeking to regulate gaming.”

The BIA has not taken any new action on the proposed regulations since December 2022, although it did last month publish the final version of a separate rule that was proposed concurrently with the compacting language regarding the taking of land into trust for Indian tribes for gaming and other purposes.

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