Tribal gaming compact rules are getting a refresh
Tribal gaming compact rules are getting a refresh
For the first time since 2008, federal regulations around gaming agreements between tribal nations and states are getting a refresh. The Department of the Interior says the updated rules give “certainty and clarity” on the criteria it weighs when evaluating those agreements.
Tribal nations have sovereign authority to operate casinos on their land. But since 1988, Congress has placed a limit on that right by requiring tribes to negotiate gaming compacts with surrounding states. Those government-to-government agreements are meant to head off questions of overlapping jurisdictions and regulatory power when it comes to gaming.
“In creating the compacting process, what Congress did was erode tribal sovereignty,” said Jonodev Chaudhuri, former Chairman of the National Indian Gaming Commission.
State governments have leveraged the system to negotiate for profit-sharing agreements that send tribal gaming revenue to state coffers. Increasingly, Chaudhuri said compact negotiations have gotten off-topic.
“We see states trying to add nongaming terms to gaming compacts, including terms that impact treaty and fishing and hunting rights,” Chaudhuri said.
The Department of the Interior’s new rules address those trends, according to Kathryn Rand, an expert on tribal gaming law at the University of Nevada, Las Vegas.
“They should give tribes if not leverage, then some certainty,” she said.
Rand said the federal government’s role is to ensure that states are negotiating in good faith and tribes are getting a fair deal. And the new rules make clear: States can’t hold this process over tribes’ heads to force unrelated concessions.
“For example, if a state and the tribe see those negotiations as a chance to settle an ongoing dispute about tribal taxation of tobacco sales, the new regulations make clear the gaming compact is not the appropriate place for that,” Rand said.
Revenue-sharing agreements, she added, will also be subject to more federal scrutiny.
The Department of the Interior has also clarified its stance on the issue of mobile gaming, noted Matthew Morgan, chair of the Oklahoma Indian Gaming Association.
“If a state and a tribe wanted to come to an agreement to offer statewide remote gaming, these regulations say, ‘Yes, you can consider that,’” he said. “Until now, that was unclear.”
Some in the commercial gaming industry have argued that mobile wagers with tribal sportsbook apps, for example, should have to be placed from tribal land to comply with federal regulations. In its new regulations, Interior said that question is fair game for negotiation between tribes and states.
According to Chris James, CEO of the National Center for American Indian Enterprise Development, the update is a long time coming for a rapidly changing sector, and one that hundreds of tribes rely on in lieu of a tax base.
“Gaming revenue is the economic driver for many tribes. It goes oftentimes to education, transportation, housing,” James said — services that benefit tribal citizens and surrounding communities.
The National Indian Gaming Commission reports that tribal gaming generated $40.9 billion in revenue in 2022 for 244 tribal nations.
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