Amelia Schafer
ICT
A new innovative state-tribal system for controlling online gambling could pave the way for a future where tribal gaming and online gaming don’t have to be at odds.
Online gaming threatens tribal gaming because of the legal loopholes it operates under, said Victor Rocha, Indian Gaming Association conference chair and a citizen of the Pechanga Band of Indians.
“Prediction markets are a loophole that’s been exploited by Wall Street and the tech bros to circumvent states’ rights and tribal rights,” Rocha said. “It’s been the industry’s dream for the longest time to look for a way for federal, sports gambling or gambling, in all 50 states.”
Online gaming, such as prediction markets that allow for individuals to place bets on elections or other real-world events, is framed as an event contact rather than traditional gambling, Rocha said. Rather than state-by-state gaming compacts, like those signed by tribes, online gaming platforms fall under the federal oversight of the Commodities Futures Trading Commission. Because of this, those gaming platforms can operate in all 50 states, completely skirting state-specific gambling operations.
“It’s about taking advantage of the moment, and it’s a violation of states rights and tribal sovereignty,” Rocha said. “Now what is happening is you’re starting to see a big pushback. … Theoretically, in Utah, you could walk into the Salt Lake City temple and you could sit right in the front row and take a bet and there’s nothing the state of Utah can do about that. So that’s a pure violation of their state’s rights to decide.”
While states like Nevada and Utah have challenged these platforms, much of the United States is yet to catch up.
However, a 2021 gaming compact between the Seminole Tribe of Florida and State of Florida, dubbed the “hub-and-spoke model,” could serve as a saving grace, paving the way for tribes to be included in online gaming services.
Through the hub-and-spoke model, the tribe’s casino serves as a “hub,” housing servers which host the gaming platforms. The gaming services are then available to anyone using an electronic device, “the spoke,” physically located within the state signing the compact.
On Feb. 19, the Wisconsin assembly advanced Assembly Bill 601, which includes legislation to allow for the implementation of its own hub-and-spoke system, allowing the 11 federally recognized tribes in the state to control online gambling within Wisconsin’s borders.
“(This is) one of the best things you can do to curb illegal gaming, offshore gaming,” said Dominic Ortiz, CEO of the Potawatomi Casino in Milwaukee and a major proponent of the legislation. “We’re fighting predictions on a national level. The NGIC (National Indian Gaming Commission), IGA, everybody, is fighting against predictions and their ability to offer sports betting. (Which is) in our eyes in violation of state and tribal compacts and sovereignty.”
The Seminole-Florida compact allows for the tribe to continue to conduct gaming across the state while also expanding the allowable scope of available gaming to include mobile sports betting, among other online gaming services.
“The opportunity for hub-and-spoke is really one of the most powerful moves in Indian Country to exercise our sovereignty that we can as a group,” said Ortiz. “Multiple tribes can come together and create a pathway that not just benefits tribes, but benefits the state.”
This system gives exclusive rights to online gaming to tribes, which could otherwise lose out on customers due to these platforms.
“This is about the violation of states’ rights and tribal sovereignty,” Rocha said. “You know, at the very root of it, it’s about tribal sovereignty. They’re saying we can come on your reservation and we can do gambling now and there’s nothing you can do about it because this isn’t gambling. These are event contracts, contracts that are regulated under the commodity futures exchange.”
If passed in Wisconsin, the 11 federally recognized tribes within the state would be given those same exclusive rights – allowing them to serve as hubs for online gaming servers.
“The SBA alliance, the Sports Betting Alliance, they’ve kind of controlled the narratives,” Ortiz said. “Well, now that we have a hub and spoke model, we can now work within the state and we can create an alliance amongst the tribes and unite our sovereignty.”
Ortiz, a citizen of the Prairie Band Potawatomi Nation, has been a major proponent of the bill’s passage.
The 26 tribally owned casinos in Wisconsin have paid hundreds of millions in gaming taxes to the State of Wisconsin since their creations and provide tens of thousands of jobs within their respective communities, he said. On a local, tribal level, these funds are often used to pay for key critical infrastructure such as language revitalization, elder care and natural resource protection, he said.
The Potawatomi Casino in Milwaukee, owned and operated by the Forest County Band of Potawatomi, was the first off-reservation casino in the United States. Opened in 1991, the casino was created to pave pathways out of poverty for the Forest County Potawatomi, located in the Wisconsin northwoods.
Over 70 percent of the casino’s workers are people of color, according to the casino’s website.
“This industry has been able to bring the benefits of gaming and keep it within the economy,” Ortiz said. “This isn’t an outside corporation sitting on a public board with the money going to a particular group outside of the state.”
The 11 federally recognized tribes in Wisconsin hold exclusive gaming rights within the state.
So far, only four states, Utah, Hawaii, Georgia and South Carolina, have banned sports betting, according to the American Gaming Association.
For tribes, there’s no adapting, Rocha said.
“This is about controlling the future of gaming,” he said. “This is about controlling the medium, the online gaming medium. There is no adapting, there’s only allowing somebody to take what is rightfully yours and that’s gambling exclusivity.”
Online gambling can be more addictive than in-person gaming, Rocha said. With the services all taking place online on a mobile device, individuals can gamble at any place and any time.
“It’s the new exciting way to do stuff,” he said. “They were pushing themselves as entertainment.
‘This isn’t gambling.’ … It’s all very Orwellian.”
The Wisconsin senate is expected to reconvene March 17, Ortiz said.
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