Sports Gambling Indian Casino
The legality of betting and gambling has been a subject of extensive debate over the course of many years. Although in India playing of cards and rolling of dice has been in existence since time immemorial, yet, one often comes across the debates on gambling on both legal and ethical fronts. While one section seeks to legalize gambling because of the revenue it might generate for the government, the other section has been reluctant to do so owing to issues like corruption and money laundering that might germinate from it.
While the Law Commission of India, in 2018, in its report on Legalizing of Betting and Gambling in Sports recommended for regulating the gambling industry, no substantial progress has been made in this direction. The commission opined that the inability of the state to completely ban the betting and gambling has lead to corruption in sports which could be resolved if the industry is adequately regulated. This would also lead to generation of revenue to the government.
Rising Star Casino in Rising Star, Indiana, and Majestic Star Casino in Gary have been permitted to conduct sports betting, but regulators have not granted those sportsbooks opening dates as of. Indiana casinos are racing ahead with preparations to launch legalized sports betting in early September, looking to seize an advantage over competitors in Chicago and other nearby large markets.
The Indian-owned Morongo Casino Resort and Spa near Cabazon, California, is one of dozens of California casinos that leaders of the Indian tribes say are legally entitled to play a major role in. American Indian tribes are welcoming an opportunity to offer sports betting in potentially hundreds of casinos across the country after the U.S. Supreme Court cleared the way for states to.
The Law Commission rightly noted that the ban is not absolute and the industry is highly unregulated. This observation stems from the fact that India has legislations relating to regulation of gambling both at central and state level, which adds to the already existing conundrum. Additionally, the legislations in place often pre-date technological advances and therefore fail to address the recent emergence of online gambling.
The legislation in place, the Public Gaming Act of 1867, is a federal legislation which outlaws the operation or being the person in-charge of a public gaming house. It states that it is illegal to operate a public gaming house and also prohibits people from visiting gambling houses. The contravention of this law attracts a fine of Rupees 200 or imprisonment upto 3 months. However, the Act is archaic and does not specifically address the aspect of online gambling. The Act itself predates the recent advancements in technology and fails to address online gambling. Due to this fact, millions of people in India indulge in online gambling on sports and casinos.
Another legislation, the Information Technology Act, 2000 regulates cyber activities in India but does not address legality of gambling or betting. The Act does not specifically address online gaming or gambling thereby making no impact on legal position of online gambling.
Further Entry No.34 of List II of the Constitution of India, 1950 empowers the states to make laws on betting and gambling. Due to this entry, many states in India have their own legislations dealing with gambling and are subject to different interpretations. For example, Bombay Wager Act bans online gambling in the state of Maharashtra and Delhi Public Gambling Act, 1955 bans gambling in the union territory of Delhi but makes an exception for ‘game of skill’. However, the states of Goa and Sikkim are the only states that have legalized gambling with appropriate licensing requirements and at restricted places. The Goa Gambling Act, 1976 allows playing of cards at off-shore vessel. Sikkim is the only state to have a law on online gaming which is the Sikkim Online Gaming (Regulation) Act, 2008. The Act however was later amended to restrict online gaming activities to physical gaming parlours in Sikkim through the internet.
In recent past, we have seen mushrooming of online gambling games such as Rummy, Casino etc. where millions of people rush to test their fate. Since, the law does not adequately address the legality of online gambling, this remains a grey area which requires intervention on part of either legislature or judiciary. While in several Supreme Court decisions Rummy has not been held to be gambling, the clarity is still required when it comes to online casinos.
Rummy has been held to be a game of skill similar to horse racing and is therefore legal in India. However, games like Casinos are a game of chance involving high monetary stakes which amounts to gambling as per Public Gaming Act of 1867. This inference is not difficult to draw as the issue that courts consider while deciding on gambling is whether a particular game is a ‘game of skill’ or a ‘game of chance’. Because of this uncertainty there is no organization that operates the online casino in India. So whether online Casinos are legal in India is the question that has a negative answer. However, indulging in online Casino games would not be considered to be illegal if the site is outside the jurisdiction of India. Due to the fact that the laws of India are not applicable to an overseas organization or gaming site, we continue to see an upsurge in the number of people engaging in this activity. Perhaps, the time is ripe for the Indian legislature and judiciary to end this conundrum and regulate the laws relating to online gambling.
[toc]The Mohegan and Mashantucket Pequot tribes, who share Connecticut’s American Indian casino market, operating gambling resorts in Uncasville and Mashantucket, anxiously anticipate adding legalized sports betting to their host of wagering options.
But the tribes say they are not yet certain they would be operating sports betting as a tribal government enterprise under the Indian Gaming Regulatory Act (IGRA) – as they do their casinos – or as a commercial venture, taxed and regulated by the state.
“We have not begun those discussions in detail but are looking forward to being a lead state,” Chuck Bunnell, Mohegan’s chief of staff, said in an email.
“It is premature to speculate on how any such legislation might impact on our rights under IGRA, much less on the provisions” of tribal-state regulatory agreements, or compacts, with the state of Connecticut, said Lori Potter, spokeswoman for Pequot’s Foxwoods resort.
Talks will intensify if the US Supreme Court deliberating a New Jersey lawsuit tosses out the Professional and Amateur Sports Protection Act (PASPA). Connecticut is one of a variety of states that have introduced legislation to legalize sports betting if PASPA is wiped off the books.
Where do tribes come down on sports betting?
The commercial and tribal government segments of the US casino industry are anticipating the high court’s decision. The matter will likely be argued this fall and ruled on next year.
But while the commercial casino industry may be eager in its anticipation, tribal government casino operators are a bit apprehensive, with good reason.
Tribal governments and commercial casino companies each operate about 460 to 480 casinos generating about $30 billion a year and employing some 330,000 workers.
But while commercial casinos are prepared to run with sports betting, expanding the scope of legal gambling will be problematic for 244 tribes in 29 states operating under federal law (IGRA) and tribal-state compacts limiting the scope and regulation of gambling on Indian lands.
Many of those compacts provide tribes statewide or regional exclusivity. Tribes in at least ten states pay a share of casino revenues in exchange for the exclusivity.
But few compacts cover sports betting, which means the agreements will have to be amended if PASPA prohibitions are lifted and tribes want to offer that form of wagering.
Either that, or new compacts will have to be negotiated, a potentially difficult task where tribal-state relations are strained. Compact negotiations have been prolonged or at least mildly contentious in California, Oklahoma, New Mexico, Michigan and elsewhere.
Tribes at a disadvantage?
Tribes go into any negotiations with states at a strategic disadvantage because they are prohibited by the 11th Amendment and Seminole Tribe of Florida v Florida (1996) from filing a lawsuit in the event of bad faith negotiations. California is one of the rare states that have waived their 11th Amendment protections.
The last option for tribes is to operate sports betting as a commercial venture under state jurisdiction, an erosion of their governmental sovereignty.
“We’re aware of individual tribes that want to have sports betting, which is great,” said a tribal official who requested anonymity.
“But the implementation part is tricky. It comes down to state-by-state and regional concerns and what the compact says.”
“It doesn’t necessarily mean tribes are opposed to sports betting,” said Valerie Spicer, founding partner of the Trilogy Group, a tribal government consulting firm. “They are concerned about the impact it may have on their current agreements.”
“We will be discussing these issues in depth at our mid-year meeting,” Ernie Stevens, chairman of the National Indian Gaming Association (NIGA), said of the group’s gathering Sept. 19-20 at the Renaissance Hotel in Phoenix.
Lobby presses for states’ rights
The American Sports Betting Coalition (ASBC), a group of gambling industry and state officials, law enforcement officers and business leaders, is advocating for the repeal of PASPA to “give states the ability to decide the question of legalization,” according to the group’s website.
The coalition was formed by the American Gaming Association (AGA) which primarily serves as the commercial gambling industry’s trade association and lobby, although it has as members seven of the 244 casino tribes.
The ASBC seeks to:
- Defer to states regarding the desirability of regulating sports betting as all forms of casino wagering.
- Ensure the integrity of sports betting and sports through state licensing and regulation.
- Make all sports betting businesses transparent to law enforcement.
- Ensure a tax regime does not undermine regulated sports betting operations’ ability to compete against illegal offshore operators.
The ASBC goals might rub tribal leaders the wrong way, particularly since IGRA was intended to give sovereign tribal governments – not the states – primacy in the regulation of gambling on Indian lands.
Tribes have different priorities
Thirty-three mostly urban Indian casinos generated half the revenue won by tribes nationwide in 2016, according to the National Indian Gaming Commission, which audits tribal casinos. Eighty-four facilities generated 72.9 percent of the win, or $22.7 billion, leaving nearly 400 operations to divvy up the remaining $7.3 billion.
A handful of those lucrative casino operating tribes are actively lobbying the sport wagering issue, including seven tribes who are members of AGA.
But a majority of tribes operate marginal, rural gambling operations that provide desperately needed jobs and meager subsidies to help fund programs for indigenous citizens. They view state intrusion, including the need to amend compacts, as a potential threat to their stream of government revenue. Betting on sports is not high on the list of priorities.
“There hasn’t been an appetite for expanded gambling that I’m aware of,” Ron Allen, chairman of the Washington Indian Gaming Association, said of state officials and leaders of WIGA’s 25 tribes, with the possible exception of three of the largest and more prosperous casino operators.
Blowback on NIGA joining AGA coalition
NIGA got a flood of negative blowback from tribal members when it announced in July it was joining the AGA coalition. The chatter got a bit heated when trade publication headlines wrongly indicated NIGA was supporting PASPA’s repeal.
Chairman Stevens issued a “clarifying” statement that NIGA was joining the coalition to monitor the group and not to advocate for PASPA’s repeal. NIGA’s priority, he said, was to protect tribal exclusivity and other rights under IGRA and the compacts.
“We realize that legalizing any new form of gaming, at any level of government, impacts our tribal gaming industry’s economic interests,” Stevens said. “These types of gaming issues raise provincial concerns unique to each and every tribal government engaged in gaming.”
AGA declined calls and emails requesting an interview.
“Repealing PASPA simply gives states, commercial and tribal operators the opportunity to pursue sports wagering if they so choose,” AGA President and CEO Geoff Freeman said in an email.
“States would have the opportunity to choose whether the activity should be regulated within their borders – it does not necessarily mean that they are the regulator and it certainly doesn’t mean that they can violate existing exclusivity agreements.
“Any suggestion to the contrary is fear mongering.”
That may not be the coalition’s intention. But any expanded, state-sponsored gambling could encroach on what tribes are allowed to offer under the compacts, limiting their exclusivity. Negotiations on new and amended compacts to allow for sports betting could in most states result in demands for new or additional revenue sharing.
Tribes divided over implementation
Casino tribes are divided on the issue of sports betting, largely because of the legal issues involved with its implementation on Indian trust lands.
Tribal gaming association leaders and others in California, Minnesota, Oklahoma, Arizona, Michigan and Washington – which combined represent about 160 tribes — can name only a handful interested in sports betting.
Sports Gambling Indian Casinos
Connecticut’s two tribes support sports betting. California, with 110 tribes – nearly a third of the 367 federally recognized tribes in the lower 48 states – has strong opposition, particularly from the California Nations Indian Gaming Association (CNIGA), which represents 31 tribes.
California has by far the largest tribal gambling industry in the country, with 62 tribal casinos generating $8.4 billion a year, a fourth of the win from all the Indian operations nationwide.
Sports Betting Indian Casinos California
California Assemblyman Adam Gray has introduced legislation to amend the state constitution to legalize sports wagering in the event the Supreme Court trashes PASPA. CNIGA, which opposes expansion of gambling in the state, spoke out strongly against Gray’s bill.
“We’re opposing the expansion of gaming,” CNIGA Chairman Steve Stallings said. “We’ll have to look at our expansion of gaming will impact our brick-and-mortar casinos, whether it’s sports betting or poker or anything else.”
Tribes may want to opt in or out
The AGA coalition seeks to make sports betting a states’ rights issue. But tribes believe with a lifting of PASPA prohibitions they have the option under IGRA to pursue sports betting in states where it is not legal.
“If the state opts out, that shouldn’t preclude the tribes from opting in,” said Sheila Morago, executive director of the Oklahoma Indian Gaming Association, the second-largest Indian casino market with 33 tribes generating about $4.2 billion a year.
“We want to make sure the tribes have the opportunity to do what they want to do. That’s the important thing.”
Should a tribe wish to pursue sports wagering in the event PASPA is lifted, it can under IGRA request a state negotiate a compact. If a court determines a state fails to enter into good faith negotiations, the tribe can seek a compact through Department of Interior secretarial procedures.
“If we go to the state of Minnesota and say we don’t want to renegotiate the existing compact – we want to negotiate a new compact – I don’t think they can turn us down,” said John McCarthy, executive director of the Minnesota Indian Gaming Association.
MIGA has a tribal-state compact in perpetuity with no revenue sharing. Tribes have a cooperative policy to work with the state on gambling issues. But should tribes seek a sports betting compact, McCarthy predicts the state would “gouge the hell out of us.”
Myriad complexities with compacts
Tribes are confronted with a myriad of political, legal and regulatory complexities in negotiating tribal-state compacts.
“If a state goes ahead and legalizes sports wagering that could be a violation of exclusivity, in some states,” former chief of staff of the National Indian Gaming Commission Joe Valandra said. “In other states, tribes could be opening the door to state regulations or new and additional revenue sharing.
“Every state is going to be slightly different,” he said. “The situation is very unclear.”
California has 75 tribal-state compacts and the constitutionally guaranteed exclusivity to operate machines and banked and percentage table games. The exclusivity does not include sports betting, which would require potentially long and complicated negotiations and the potential for further revenue sharing.
“I would think so,” Stallings said of compact renegotiations. “People like [Assemblyman] Gray don’t give that any consideration. There’s no thought being given to all these implications. There’s been no consultation with anyone in the industry.”
States would have leverage in compact talks in New Mexico, where competition is stiff, and Michigan, where tribes already compete with commercial casinos. The 33 gambling tribes in Oklahoma may have an easier time negotiating a new compact with a cash-strapped legislature.
The Connecticut tribes have no commercial competition and state officials enjoy a generous share of tribal revenues. Tribal officials hope they can reach a model agreement on sports betting.
“I am sure they don’t want to violate the compact,” Bunnell said of state officials. “That’s why discussions are so important.”