sports betting and the indian gaming regulatory act€¦ · professional and amateur sports...

D.C. Indian Law Conference21st Annual

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Sports Betting and the Indian Gaming Regulatory Act

Michael Hoenig, General CounselNational Indian Gaming Commission


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Created by Indian Gaming Regulatory Act (25 U.S.C. 2704)

Regulates over 500 gaming facilities operated by 241 Tribes


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Indian Gaming Regulatory Act

• “Provides a system for joint regulation by tribes and the federal government…” S. Rep. 100-446 (1988)

• Purposes:o Promote Tribal economic development, self-sufficiency, and strong tribal

governmentso Provide a statutory basis for regulation of gaming by tribeo Establish NIGC to protect gaming as a means to generate tribal revenue


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Professional and Amateur Sports Protection Act (28 U.S.C. 3701)

• Also known as “PASPA”

• Made it unlawful for States or their subdivisions to authorize sports betting. (28 U.S.C. 3702)

• PASPA allowed the Attorney General and professional and amateur sports organizations to bring civil actions to enjoin violations. (28 U.S.C. 3703)


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Murphy v. NCAA • 138 S. Ct. 1461

• “Prohibiting States from authorizing sports gambling” violates the 10th Amendment of the U.S. Constitution.

• States may now legalize sports betting, “if they comply with other existing federal laws”


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State sports book tally as of September 4, 2019:

• 13 states have legal, fully operable sports books: Arkansas, Delaware, Indiana, Iowa, Mississippi, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, and West Virginia

• 5 states and Washington, D.C. have passed sports betting legislation and are ready to launch within the next six months: Illinois, Montana, New Hampshire, North Carolina, Tennessee

• “26 states are moving toward legalization”


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3 Basic Questions in the wake of Murphy:

Does a Tribe Want to offer sports betting?

Can a Tribe offer sports betting?

How does a tribe offer sports betting?


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Does a Tribe want to offer sports betting?

Each Tribe must decide for itself

based on a range of factors

relevant to it.

Revenue generator or

amenity?


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Can a Tribe operate a sports book?

Class III Game

(25 U.S.C. 2703;25 C.F.R. 502.4(c))

Requires compact(25 U.S.C.. 2710)

May require

change to existing compact


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How does Tribe implement sports betting?

Self-operateIndividually

owned gaming

Management agreement

Consulting/vendor agreement


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Self-OperateTribe does everything in-

house

Sets odds

Decides whether/when to accept or stop accepting

wagers


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Individually Owned Gaming (25 U.S.C. 2710(b)(4); 25 C.F.R. 522.10)

• At least 60% of net revenue must go to Tribe. 25 C.F.R. 522.10(c)

• Must pay fees to NIGC. 25 C.F.R. 522.10(d)

• Licensing standards at least as restrictive as state law 25 C.F.R. 522.10(e)

• Apply state law standards with respect to purpose, entity, pot limits, and hours 25 C.F.R. 522.10(f)


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Management Agreement (25 U.S.C. 2711; 25 C.F.R. Parts 531 & 533)

• Must be submitted to Chair for approval. 533.1

• Management fee can be no more than 30%, but can go up to 40% with justification. 531.1(i)

• 5 year term limit, but can go up to 7 with justification. 531.1(h)

• Suitability determinations for management company. 533.6(b)

• NEPA


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Consulting or Vendor Agreement• Tribe maintains decision-making and management authority, but hires vendor or

consultant to provide information or advice

• Declination Letter: A legal opinion from OGC that states that draft documents submitted and reviewed are not management and do not violate SPI requirement.

• [email protected]


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De facto Management• Agreement gives no management authority to consultant or vendor

• Implementation of agreement leads to management without an approved contract

• Tribe should have someone with the expertise to make management decisions and decide whether to accept advice or information from vendor


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Questions?

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