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The U.S. Department of the Interior has approved new regulations for tribal gaming compacts that expressly recognize the possibility of tribes offering state-wide online gaming without having to obtain a state license.
The new rules on compacts were announced by the Interior Department on Friday (February 16), some 14 months after an initial draft was released for a formal consultation process that drew several hundred responses from across the tribal and commercial gaming industries.
Perhaps the most significant change in the updated regulations formally recognizes the prospect of compacts including provisions for state-wide online betting consistent with those of the Seminole Tribe’s landmark 2021 agreement with the state of Florida.
Specifically, compacts may permit online betting involving players located beyond tribal reservations so long as both state law and the compact deem the gaming to take place on servers on Indian lands, and the tribe is responsible for regulating the activity.
In updated language from the initial draft, online gaming may also be offered on the lands of another Indian tribe within the same state, but only if that tribe consents to it.
The Interior Department’s rulemaking initiative has been strongly supported by a number of major gaming tribes, including the San Manuel Band of Mission Indians of California.
But the language on state-wide online betting was sharply criticized through a series of comment letters submitted by commercial gaming interests, including by various state-level trade associations.
In its final rule, the department acknowledged that “many non-tribal organizations expressed deep concern” regarding the provision, but said the final language “codifies existing departmental practice and, where relevant, existing case law.”
The new regulations come after the U.S. Court of Appeals ruling last June that reinstated the 2021 Seminole compact and allowed the Seminole Tribe to relaunch its Hard Rock Bet online sportsbook in Florida.
The Interior Department’s Bureau of Indian Affairs allowed both the Seminole compact and 2023 amendments to a compact between the state of Kansas and Prairie Band Potawatomi Nation to take effect without explicitly endorsing their language regarding state-wide online wagering.
The regulations announced on Friday would now appear to give the department clearer authority to affirmatively approve such compacts in future.
Tribes in other U.S. states — specifically Arizona, Connecticut and Michigan — have instead been able to participate in online sports betting and iGaming on a state-wide basis by obtaining a commercial license from a state gaming authority.
The interior department noted that nothing in its regulations precludes that model, as states “will remain free to choose whether or not to permit mobile or internet gaming in the state as well as if such gaming will be state-licensed and taxed or compact-based tribal gaming potentially with government-to-government revenue sharing.”
The department also declined to adopt proposed language that would require any state that otherwise legalizes any form of online sports betting or iGaming to negotiate with tribes to offer the same via a compact. The U.S. Secretary of Interior “does not have the authority to unilaterally require a state to allocate jurisdiction over wagers made by patrons located off Indian lands in the state,” the department said.
Controversial Proposals Axed From Final Rule
Recognition for state-wide online gaming by tribes is not the only significant change in the updated compact regulations published on Friday.
Elsewhere, the rules:
However, the final rules do not include at least two controversial provisions that attracted fierce criticism from non-tribal interests during the consultation process.
The Interior Department’s previous draft would have sought to compel states offering any form of Class III, casino-style gaming to negotiate a compact with tribes to cover all forms of Class III gaming.
That language was opposed by the attorneys general of at least 20 states, who submitted a joint letter to the Bureau of Indian Affairs last March warning that such a rule would mean tribes potentially being able to offer blackjack, roulette and any other form of casino gaming, simply because a state has a lottery or horseracing.
Also not included in the final regulations was another proposed rule that would have allowed the Interior Department to avoid a legal obligation to disapprove any compact that violates the 1988 Indian Gaming Regulatory Act.
The new regulations on tribal gaming compacts are due to take formal effect 30 days after they are published in the Federal Register, which could happen as soon as Tuesday (February 20).
The rules follow the adoption on December 12 of a separate set of updated regulations governing the acquisition of lands by the federal government on behalf of tribes for gaming and other purposes.
In a statement, U.S. Secretary of Interior Deb Haaland said the updated rules on compacts “provide certainty and clarity to tribes for an industry that remains one of the significant sources of economic development in Indian Country.”
