Federal Bill Aims To Remove Tribal Online Gambling Barriers

A new effort is afoot to remove barriers preventing federally recognized tribes from offering online gambling products. According to the title of the new bill, HR 4308, it seeks “to remove Federal barriers regarding the offering of mobile wager son Indian lands when the applicable State and Indian Tribe have reached an agreement.”  

The bill’s main thrust is to clarify that tribal online gambling occurs at the server’s location. Which, if located on tribal land, would satisfy the language of the Indian Gaming Regulatory Act (IGRA).

The bill, introduced by California Rep. Lou Correa (D-CA), received bipartisan support from Rep. John Katko (R-NY).

Building On Tribal Gambling Momentum

The current House Resolution isn’t the first attempt to clarify a tribe’s capacity to offer online gambling under IGRA, but the timing couldn’t be better.

The online gaming landscape has evolved since late 2019 when then-New York Congressman Anthony Brindisi’s similar attempts failed even to receive a committee hearing before the annual session came to an end less than two weeks later.

In 2021, tribes are increasingly motivated to dip their toes in the online sports betting and online gambling pool. Still, in most instances, tribes wishing to get involved in online sports betting have done so as commercial operators. 

Online sports betting gained tremendous steam in 2020 and has lived up to its further projected growth in 2021 as more than half the states in the country have now legalized sports betting.

Furthermore, Connecticut’s full legalization of online gambling was done in a manner that gives the state’s two tribes exclusive rights to online casino gaming within the state. But as mentioned, they will do so as a commercial operator. The tribes will also be able to operate retail sportsbooks, as will the Connecticut lottery. The three parties will be the only ones allowed to operate online sportsbooks – once again, the tribes will be licensed as commercial online sports betting operators.

There are also the recent developments regarding sports betting in Florida, where a new compact approved by the legislature has already received a legal challenge on the grounds that it violates IGRA, the law Rep. Correia’s bill would address.  

The Details

Rep. Correa hopes that tribal gaming will get its fair share of a growing online gaming market should his proposal become a reality.

There are many gray areas and individual state laws around online gaming that often enable other online casino and sportsbook operators to enter markets ahead of, or in favor of, tribal casinos. Without legal clarity, tribes would be restricted to brick-and-mortar operations in most cases.

Correa’s bill would enable tribal casinos to operate their own onsite servers with the greater aim of clarifying that “the location of the wager occurs at the location of the server,” as he said.

Correa also threatened that such clarification was necessary for the bill to “ensure that tribal gaming is not relegated to the same fate as Blockbuster.”

Future Impacts

A handful of states will be voting whether to legalize sports betting over the next year, and several more have already done so but have not yet launched online sportsbooks.

As that trend continues, the ability for tribal casinos to have access to new markets will be highly beneficial, if not completely necessary, towards maintaining a presence in casino gaming as a whole.

Currently, 29 states play host to Indian casinos, including Arizona (where tribes agreed to become commercial online operators), Louisiana, and Wyoming, which have legalized online sports betting but have not yet gone live.

With access to online gaming’s revenue streams, tribes will be in much better shape to sustain themselves and compete on equal footing in the modern gambling world.

The alternative is they find themselves shut out of the online market and find themselves at an extreme disadvantage to commercial gaming operators.