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North Dakota Governor Doug Burgum has denied tribes’ request for exclusive online gaming rights in the final draft of new gaming compacts, saying Wednesday (November 2) that there is no clear legal path for him to unilaterally expand the state’s gambling laws to allow the five tribes to offer internet wagering across the state.
Internet gaming and sports betting are currently illegal in North Dakota, but the new compacts announced on Wednesday include provisions to allow the tribes to offer online gambling across the state if authorized by state and federal law in the future.
“While we understand and appreciate the desire by some of the tribes to extend online gaming beyond their reservation boundaries, a clear legal path does not exist for the governor to grant such a broad expansion of gaming in the compact,” the governor said in a statement.
The new compact, which remains subject to final state and federal approval, does allow for internet gambling and mobile sports betting within tribal reservation boundaries.
The state’s five gaming tribes had petitioned Burgum to give them exclusive rights to the online gambling market to make up for lost revenue from the legalization of electronic pull-tab machines.
Since electronic tabs were authorised in the 2017 legislative session, there are approximately 4,500 devices at 800 charitable gaming locations across North Dakota, surpassing the roughly 3,300 slot machines located at tribal casinos in the state.
The governor's stated concerns as to the legality of offering state-wide online gaming via a compact come as a federal court of appeals in Washington, D.C. prepares to hear oral arguments on December 14 on a similar agreement struck by the state of Florida and the Seminole Tribe last year.
Although the federal government allowed the 2021 Seminole compact to take effect and enable the tribe to launch online sports betting across Florida, a federal district court judge ruled last November that it did not comply with the Indian Gaming Regulatory Act of 1988.
North Dakota's Burgum assured the tribes in his statement on Wednesday that his administration plans to work with the legislature to bring all parties to the table and take a comprehensive look at gaming during the 2023 session, including sports betting, electronic pull-tabs and other gaming.
Other changes to the compacts include lowering the legal age for gambling on reservations from 21 to 19 years old and allowing tribes to accept credit and debit cards for any purpose, including account wagering and cashless gaming.
Under the agreement, the state’s five tribes will each pledge $25,000 annually for gambling addiction programs. The current compacts, one for each tribe, expire at the end of the year.
The compacts also clarify that the state will conduct one annual casino inspection at the tribe’s expense. Any additional inspections will be at the state’s expense.
Casinos remain subject to regular federal inspections and audits, along with submitting quarterly reports to the state, according to the compact.
“These negotiated compacts address a number of long-standing issues between the state and tribes by cutting through red tape and streamlining regulation of tribal gaming for the benefit of both parties,” Burgum said.
During a public hearing on October 21 at the state capital in Bismarck, tribal employees argued their casinos have been hurt by the expansion of electronic pull-tab machines, which were legalized in 2017.
North Dakotans spent almost $1.75bn on electronic pull-tabs in fiscal year 2022.
Cynthia Monteau, executive director of the United Tribes Gaming Association (UTGA), said gross proceeds from e-tabs since 2018 have exceeded $4bn.
“It’s pretty hard to say the scales are tipped in favor of the tribes,” Monteau said. “It’s pretty hard to say that.”
She said the tribes came to the negotiating table looking at how “we can present a win-win situation.”
Monteau did not immediately respond to a request for comment Wednesday. The UTGA consists of members from each of the state’s five tribes.
Burgum has submitted the five compacts to Legislative Management for review. After the committee’s review, the compacts could be signed by the governor and tribal representatives.
The tribal-state gaming compacts would then be sent to the U.S. Department of the Interior for final approval.
