Tribes important to future of regulated daily fantasy sports

In the drive to legislate for or against daily fantasy sports across over 30 US states, the influence of tribal gambling interests is rapidly becoming a key element, and has resulted in pauses in at least two states.

The reason lies in the gaming compacts which many state governments have agreed with tribal gambling interests through which land casinos set up on tribal land pay a portion of their revenues to the state.

The compacts usually contain provisions (loosely termed “poison pills”) which release the parties if full compliance with the detailed terms of the partnership compacts is not respected.

Thus, a state may lose the substantial revenues associated with the compact, and also run the risk of freeing the tribes to embark on alternative arrangements.

Major changes in state gambling laws, for example in the case of daily fantasy sports, could trigger these “poison pills”, giving state lawmakers pause for thought in their deliberations and decisions.

Two recent examples are Oklahoma and Arizona, although the issue applies to many states.

Legal Sports Report notes that in Oklahoma a pair of DFS regulatory bills launched earlier this year has stalled at committee stage despite being voted forward.

The reason for the hiatus is an objection from the Osage nation, which advised in a website comment:

“Among a coalition of tribal leaders, Principal Chief Geoffrey Standing Bear supported successful efforts to defeat the “Oklahoma Fantasy Contests Act” (HB 2278/SB 1396) on March 8 at the Oklahoma State Capitol during a regular meeting of the Oklahoma Caucus of Native American Legislators. The bill aims to establish Daily Fantasy Sports (DFS) online betting in Oklahoma and violate gaming compacts.”

Approached by Legal Sports Report for comment, Oklahoma Senator David Holt subsequently confirmed that the bill has been shelved….for now.

However, any resumption of progress on the bill is likely to again be contested, a possibility illustrated by a letter of support for the Osage from Cherokee Nation head Bill John Baker, who warned that the tribes will be fighting similar legislation in the future.

Arizona is another example, LSR observes, noting that the state Senate Rules Committee has temporarily stalled DFS regulatory proposal S1515 after opposition from the Arizona Indian Gaming Association, a group that has successfully opposed fantasy sports legislation in the past, and remains unhappy with recent proposals.

The group warns that excluding the tribal partner and passing the legislation could result in the state-tribal compact being declared null and void.

The Arizona Indian Gaming Association website explains: “Any change in State law, whether enacted by the State legislature or a vote of the people, that allows for an expansion of gaming off Indian lands that was not lawful on May 1, 2002, permits Tribes to offer gaming without limitation.”

And of course withhold any partnership revenues from the state.

Tribal gambling compacts are widespread, and there are clearly other states where legislators need to recognise that tribal gambling interests are an important consideration that could lead to major and expensive complications if ignored.

The tribes take the compact partnerships seriously and are unlikely to allow themselves to be excluded.