From the Rumor Mill: Department of Justice considering a rewrite of the IGRA and Wire Act to benefit tribes

From the Rumor Mill: Department of Justice considering a rewrite of the IGRA and Wire Act to benefit tribes

A request from the Biden administration could signal changes are coming to the Internet Gaming Regulatory Act.

Many in the gambling industry were taken aback on Friday when Joe Biden asked the courts to dismiss complaints to a Federal court by two pari-mutuel operations, Magic Casino and Bonita Springs Poker Room, over a compact reached between Governor Ron DeSantis and the Seminole Tribe that gives the Tribe a 30-year deal to offer sports betting in Florida. The deal, which has already been ratified by the state legislature, allows the Seminoles to exclusively offer sports betting and mobile wagering from servers hosted on the reserves. Bets can be made anywhere by citizens of Florida via a computer or cell phone and the Tribe has the right to partner with any pari-mutuel operations to allow sports bets to be placed at their venues such as racetracks, jai-alai etc. The pari-mutuel venues would receive a percentage of wagers, but the Seminoles would still be the hosts. The Seminoles are considering some partnerships, but the two complainants are not in the mix of potential partners.

Lawyers for Magic Casino and Bonita Sprints say the compact would irreparably harm their businesses and also violates the Indian Gaming Regulatory Act (IGRA), which requires that all bets take place exclusively on Tribal lands to be legal.

“Because sports betting provisions are unauthorized or illegal, they are automatically severed from the Compact ratified under the Implementing Law, and the Court should permanently enjoin Defendants from implementing or enforcing such provisions,” the lawyers for the two companies stated in filing their objection.

The lawyers also said that any changes to gambling in the state requires a referendum and that was never carried out.

Magic Casino and Bonita Springs instead have tried to push for a new law that would allow sports betting to take place anywhere in the state and be operated by any gambling company, an effort that DraftKings and FanDuel, among others, have contributed millions to.

U.S. Department of the Interior Secretary Deb Haaland said that Magic Casino and Bonita Springs don’t have standing, that the Federal Government has already implicitly okayed the deal and that there is no proof that the compact will harm either of their operations. In her comments she called the lawyers’ complaints, that it will harm their businesses, to be unproven and that it is based solely on assumptions with no proof. Consequently, she asked the federal judge, on behalf of President Biden, to dismiss the complaint filed by Magic Casino and Bonita Springs.

The announcement by Haaland, who is the first ever Native American to hold this cabinet post, caught many in the industry by surprise, since this is not an issue one would expect the Federal government to take such an interest in. But, a source who writes about gaming law and has followed Indian Gaming issues for several years, told me that he has it on good authority that the Feds are interested in this particular complaint because internally the Biden administration is anxious to remove impediments to Tribal sovereignty and many Tribal groups have asked for the IGRA and Wire Act to be amended, since the laws as they stand are not beneficial to the majority of Tribes.

“Many people in the White House feel that the Native Tribes in the United States have been mistreated in the country for almost two decades and that needs to be rectified. Canada just instituted a Truth and Reconciliation commission to look at the crimes and atrocities committed against Indigenous groups and most Democrats in the United States feel it is time that the United States does the same. Racial tension has grown significantly in recent years and they feel it’s time for reconciliation. The current government feels that Tribes are autonomous and allies to the federal and state governments, but are still treated as outcasts in many states and this needs to be rectified. Some states like Michigan and Florida have started realizing that it’s time to allow the Tribes to be seen as sovereign and get some financial independence by permitting them to benefit completely from things like gambling, but other states like Oklahoma still view the Tribes as adversaries and treat them as a necessary evil, rather than ally. So, several Tribes have come forward asking the federal government to amend the Wire Act and portions of the IGRA that restrict them from maximizing profits, since under both laws all bets have to take place completely on Tribal lands to be legal. But most of the reserves are in small, secluded areas of the states and are thus inconsequential in the ability to reach most people. If the Wire Act was amended, however, to include a paragraph which says that Tribal Land is not interstate and if the IGRA was rewritten to remove the requirement that all bets have to take place completely on Tribal lands, then it would be more fair to the Tribal groups. And in that case, adversarial Governors would not be able to stop the Tribes from benefitting. So, from what I’m told, Joe Biden sees that allowing this compact is an important first step.”

If my sources are correct, the federal government will look to amend or possibly even scrap the Wire Act and IGRA. We’ll know in due time, but now Native Americans have a seat at the table at the highest levels of government. Coupled with a belief that it is time to for Tribes to be seen as truly sovereign, it would certainly make sense for why the Biden administration has taken such an interest in this particular compact.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley’s RUMOR MILL!

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