Tribal Casinos Rapidly Expanding Into Sports-Betting Market

September 16, 2021
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After taking a cautious approach following the U.S. Supreme Court’s decision three years ago to overturn the federal ban on sports wagering, Indian tribes are now rapidly expanding into the market and driving the debate over the future of sports betting in the U.S.

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After initially taking a cautious approach following the U.S. Supreme Court’s decision to overturn the federal ban on sports wagering, Indian tribes are now rapidly expanding into the market and driving the debate over the future of sports betting in the U.S.

With the opening of a sportsbook at the Northern Arapaho’s Wind River Hotel & Casino in Wyoming last week, tribes in 11 states are now offering sports betting as part of their casinos.

Connecticut’s two Indian tribes are set to launch sports betting in short order after the amended gaming compact between the state and the Mohegan Tribe was published in the Federal Register on Wednesday, meaning it is operational.

“The publication of the approval of the compact amendments in the Federal Register today was a very important and necessary step needed to offer sports wagering in the state,” said Ray Pineault, president and CEO of Mohegan Gaming & Entertainment (MGE).

“We continue to work very closely with our partners and the state to make sure we roll out sports wagering and iGaming in an appropriate manner that is in the best interest of the Mohegan Tribe, our organization, the state of Connecticut and its residents as well as our guests.”

Pineault said the tribe was confident of soon making an announcement when these new offerings will be available, “but [we] are not prepared to provide a definitive date today.”

There was no notice about when the amended compact between the state and Mashantucket Pequots would be published. Both agreements were approved by the U.S. Department of the Interior (DOI) last week, according to Democratic Governor Ned Lamont.

Both tribes will offer retail and mobile sports betting and online casino gaming.

The latter two offerings will be conducted under the regulatory oversight of the state, with retail sports betting on reservations operated as a form of tribal gaming subject to the compacts.

Lamont said he expects all the new forms of gaming to go live in early October.

The Mohegans, who own and operate the Mohegan Sun Casino, have partnered with FanDuel for sports betting, while the Mashantucket Pequots, which own and operate Foxwoods Casino, have partnered with DraftKings.

Before the tribes can launch online sports betting, the state's Department of Consumer Protection (DCP) will issue supplier and vendor licenses, and operators must file a request with the DCP to begin operations. According to state law, operators must inform the DCP ten days in advance of when they want to go live.

Also on Wednesday, the DOI published four more tribal-state sports-betting compact amendments for tribes in Washington State. The approvals were for the Muckleshoot, Kalispel, Colville and Shoalwater Bay tribes.

Nine tribes previously had their own compact amendments approved, with three more amended compacts pending DOI approval.

Last week, the Snoqualmie Tribe became the first Washington State tribe to open a retail sportsbook at its casino just outside Seattle a few hours before the kickoff of the 2021 National Football League Season on September 9.

It remains unclear when the other Washington tribes will launch retail wagering and limited mobile betting on reservation lands.

Currently, 16 of the 22 tribes that operate 29 casinos in Washington plan to offer sports betting.

Tribes Shaking Off Sports-Betting Skepticism

In addition to Washington and Wyoming, tribes in Arizona and North Dakota have also joined the sports-betting market ahead of the NFL season getting underway last week. In Wisconsin, the Oneida Tribe are expected to open a sportsbook at their eponymous casino in Green Bay in November after the tribe recently negotiated amendments to their compact with the state.

Tribal-run sports betting is also imminent in Florida, after the federal government last month declined to reject a landmark new compact that will permit not only on-site sportsbooks at Seminole Tribe casinos, but also state-wide mobile sports wagering conducted from servers located on tribal lands.

The Seminole compact still must overcome at least two lawsuits in federal courts, but the tribe are eligible to start offering sports betting on tribal lands as early as October 15.

The recent expansion activity means at least 17 of the 29 states with tribal gaming markets should include sports betting by Super Bowl LVI in February, versus just seven at the start of 2021, according to VIXIO GamblingCompliance research.

There are four main reasons why tribal expansion into the sports-betting market has accelerated, despite initial skepticism over whether it would be worth amending compacts for a lower-margin product, according to Kathryn Rand, a professor and co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota.

First, the closures caused by the pandemic gave tribes a greater sense of urgency to ensure the future success of their gaming operations and tap into younger demographics, Rand told VIXIO GamblingCompliance.

In addition, there are now several examples of successful regulatory frameworks to copy and new vendors have established a proven track record that grants tribes greater confidence in them as potential business partners.

The rapid rollout and fiercely competitive market has also been a factor, Rand said, forcing tribes in states with both commercial and tribal gaming to move quickly because “being late to the game can be costly.”

“Some tribes have been successful in working cooperatively with states to favorably position their sportsbooks in this highly competitive environment,” Rand said.

Finally, the federal government’s tacit approval of state-wide mobile sports betting as a form of tribal gaming under the new Seminole compact “has opened up a critical competitive market angle,” according to Rand.

“This is particularly important for tribal casinos, many of which are in rural areas with limited markets,” Rand said. “If a tribe is able to conduct state-wide mobile wagering, that opens up a market previously unavailable to tribal casinos, particularly in rural areas.”

Despite the rapid pace of change in Indian Country, in the second largest tribal gaming market any discussion on legalizing sports betting remains off-limits, due to the lingering effects of a legal battle last year between tribes and Oklahoma’s Republican Governor Kevin Stitt over the renewability of their compacts.

Oklahoma has 39 gaming tribes and 132 facilities from bingo halls to casinos.

The relationship between Stitt and tribes remains strained after the governor claimed tribal compacts expired without an automatic renewal and then negotiated new agreements with two tribes that included sports betting.

Both agreements were ruled invalid after the Oklahoma Supreme Court ruled the governor lacked the authority to enter into both compacts under state law.

Sheila Morago, executive director of the Oklahoma Indian Gaming Association (OIGA), simply said “nope” when asked on Wednesday if there was any movement toward talks between tribes and the Stitt administration over amending the compacts to allow for sports wagering.

Additional reporting by James Kilsby.

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