Economic Impact of Legalized Sports Betting on Native American Tribes

Tribal casinos have been here for so long that it’s possible to believe they have always been here, but that’s not the truth. The first one was built by one of the most popular tribes in the United States —the Seminole tribe— they’ll be making an appearance later in this article. Like other tribes running casino operations in the country, they have been facing challenges since the advent of legalized sports betting despite launching the first high-stakes bingo parlor in 1979 before others jumped on the wagon. 

Since then, tribal casino gambling has grown into a massive $39 billion industry across 29 states, managed by 243 federally recognized tribes. It serves as a source of income for many tribe members as a sizable portion of the gaming revenue gets split among members, with tribes like the Santee Sioux relying solely on their gaming/gambling income.

This understanding, or more correctly, compact, with the state governments, is now at risk, and people all over the country are watching with interest to see how it will unfold. 

Curiously, many wonder about the precedence set by the Chippewa couple on the Indian land in northern Minnesota in the 70s who were wrongly taxed and saw the judgment overturned by Justice Brennan of the Supreme Court. This ruling backed the autonomy in action and activities of Native American tribes in their settlements, which resulted in them operating bingo operations that have developed into the tribal casino industry of today. 

The Evaporating Advantage

Residents in Michigan, Connecticut, California, Wisconsin, Oklahoma, North Dakota, Minnesota, Kansas, and Arizona must be familiar with the different levels of gambling restrictions in their states. They must have —at some point— visited the tribal establishments for some sightseeing or recreational gambling. Another thing residents in these states would have in common is the longing for an alternative without having to leave the comforts of their home before accessing their favorite games, which has led many people to bet at the best offshore sportsbooks which, according to Jeremy Olson, often offer live streaming of sports so you can bet as you watch, and accept crypto for fast and anonymous transactions. Many offer more than 20 sports for fans to bet on, too.

But as you can guess, many Native American establishments do not like this. They argue that this operation eeks into their market and dwindles their revenues, which are crucial to their sustenance. This situation can only get worse with the clamor to legalize sports betting. 

Native Americans say it’s their right and crucial to maintaining their sustenance, especially when their establishments contribute to the larger society, providing as many as one million jobs as far back as 2020, with a larger percentage of this workforce being non-native Americans. Lawmakers in Washington are not buying it and choosing to call it a monopoly instead. Their counterargument, which many people of the general public share, is that involving Native American Tribes in sports gambling in California, Wisconsin, and everywhere else will stifle innovation and eat into state revenue. 

Legalizing sports betting completely changes the landscape. As more states make it legal to gamble within state borders, fewer people will be obliged to visit tribal casinos, reducing the advantage they have long held for decades. Coupled with the rise of mobile technology and the introduction of online casinos, no ID casinos will make it easier for players to get their fill for gaming and for many companies to set up shop. This is made possible as they can ensure regulatory compliance with one or more gambling commissions outside of the United States, with the Malta Gambling Authority and the United Kingdom Gambling Commission being some of the most popular. 

Florida with the Not-So Silver Bullet

In April 2021, the Seminole tribe struck a deal with the Florida government to give them the exclusive right to provide several game offerings, including online sports betting, throughout the state of Florida. This compact was supposed to span 30 years, and the government will receive a minimum of $2.5 billion spread across five years. This compact was designed to solve the problem most tribal casinos were facing, and while Florida kicked it off, tribal casinos in other states were all but certain to follow suit. 

It would have been the silver bullet that made all their problem vanish, but for the pushback it got from lobbyists working for commercial gambling companies like DraftKings and FanDuel, to name a few. Clearly irate about the fact that this shuts them out, they argued that even if the casino server is on Native American settlement, it will violate the 1988 federal law governing tribal gambling as it will serve gambling enthusiasts that are not on Native American settlements. 

The tugging continues. With every push, there’s a corresponding pull on the matter and very little in the way of an end in sight. Still, some experts have weighed in on the matter, one of them being John Holden, a Law and Business professor at Oklahoma State University, who had this to say:

“If the tribes can’t have mobile — which will eventually mean they won’t have online casinos — then you are effectively writing an expiration date on tribal gaming.”

Tick tock!