Tribal groups consider internet gambling collaboration

Following the annual summit on tribal issues held in Washington DC over the weekend, a number of small northern Midwest tribes came together in a separate meeting to discuss pooling resources with a view to expanding into the burgeoning US online gambling market, reports the Washington Post.

Organising the project is a Washington DC lawyer named Jeffrey Nelson, who said of online gambling:

“Nobody knows how big it’s going to be. But everyone has stars in their eyes, because it’s large.”

Problems facing tribal land casino operators include market saturation and, some cases, remote geographical locations, and there is a school of thought that internet gambling may provide relief and fresh revenues.

However, for smaller tribes that do not have the resources and player liquidity of larger tribal rivals there may be a need to band together to build a viable internet operation.

The confused legal situation doesn’t help, with individual states regulating whilst Congress appears to have largely lost interest in a federal solution to this long-running legislative issue.

“Now, nobody thinks anything’s going to happen [at the federal level] for the foreseeable future,” Nelson said.

Nelson points out that most tribes don’t need federal or state approval to start offering “Class II” games — mostly bingo and poker — as long as the players are located within their reservations, and the National Indian Gaming Commission has given its imprimatur.

Even without the high-dollar, low-skill games like blackjack and roulette, Class II gaming can be quite profitable, and an online offering would serve as an additional selling point for a small casino or other tourist attraction, Nelson says.

If enough small tribes collaborate in setting up a common online platform, they could achieve the scale necessary to attract a critical mass of gamers, and a commission with representatives from each tribe would divvy up the profits while pushing for broader legalisation, he says.

After some enquiry, the Lac du Flambeau Lake Superior Band of Chippewa Indians in Wisconsin signed up in October, and Nelson is now recruiting other tribes to join the project.

He claims that around 40 have expressed interest, but at this stage declines to name them.

The Washington Post points out that Nelson may have some competition, noting that another group called the Intertribal Online Gaming Alliance has a similar project, but with a more aggressive business plan that brings together tribal payday lending operations with online gaming, allowing loans to be placed as bets.

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