Moderator:
Valerie Spicer – Founding Partner, Trilogy Group
Speakers:
Sheila Morago – Executive Director, Oklahoma Indian Gaming Association
Loretta Tuell – Attorney, Tuell Law
Jason Giles – Executive Director of the National Indian Gaming Association
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VS: You see a lot of coverage about tribal gaming and sports betting and you see comments such as tribes are slow to get going, they haven’t made decisions yet but I think that’s really a myth, and I want to clarify that it’s a methodical process. There is a lot going on when you are a tribal government involved in gaming and you have to take plenty into consideration, not only what is in your compact and the relationship with the state – all of those factors and what does it mean to you, so it’s a bigger decision.
California has just launched an initiative regarding sports betting. The ballot initiative has been put forward by the state’s 18 tribes, with one million signatures needed for a referendum. It is the number one market for tribal gaming in the US and a lot of people are waiting to see what is going to happen in the state and what that would mean for everyone else.
LT: California is unique; we have 110 tribes and there’s a lot of money there, a lot of economic development and it’s the fifth-biggest economy in the world. When you look at the top 10 sectors of influence in that, tribes are number 10 in the sector and leading that with jobs, so from my perspective, tribes have a voice in this debate and where they want to go and how they want to move forward is critical.
A few years ago, one of the main topics here was online. It’s playing out a little differently with the expansion into sports betting. The initiative is tribally driven, tribally written and tribally sanctioned. In the US, you need authorization for the type of gaming you are going to do. With this initiative, the first thing to know is it is anticipated that even if it passes, it won’t start until at least 2022. It’s a nuance of California law but there is an initiative out there, it’s tribal driven and if it passes it creates a market.
VS: Oklahoma is the number-two gaming market segment for tribal gaming in the US. It has a lot going on there, a number of tribes, with more than 130 gaming facilities, so Sheila, let’s deep dive about what’s going on right now.
SM: To say we’re going through some issues in Oklahoma is mild. Currently right now we have a Governor who is being sued by five tribes, after telling us in July that our compacts expire at the end of the year. However, we argued that the contract has a comma and goes on to read if the state does certain things then the compact should automatically renew for another 15 years. It’s safe to say we’re on different sides of that glass, and each time he keeps digging himself a deeper hole. But five tribes have sued him to say look, let the judge decide if the compact automatically renews, and when you lose then we can sit down and talk about rates and exclusivity.
VS: When you look from a national perspective and all the different states that are potentially looking to come online, what are some of the concerns that come to the National Indian Gaming Association (NIGA) from tribes of those states and what do you foresee happening with them?
JG: The tribes in each of the states have got to exercise their political muscle, as we know in Oklahoma. This is crazy but if the state of California – the fifth-largest economy in the world – went to all their tech companies and said ‘give us more money or you’re out of here’ those companies would refuse and , go up to Seattle, Portland maybe Nevada. Tribes can’t leave, that’s our homeland. Hello states, tribes cannot just get up and leave. We’re going to be here and you’re going to have to deal with it.
SM: Indian gaming is the only thing in the US where a state governor can convene and say ‘I want more money from you although I didn’t put in a dime and risk one cent on your operations’. Although they allowed us to open class III gaming, which is great and we did, we put all the money at risk, we took out all the loans, we did all the infrastructure, which was in rural areas and more than 90% of tribal gaming is in rural areas in the US.
When we do infrastructure builds for our facilities, we tend to actually upgrade or put in new infrastructure for the surrounding community. So they are the largest employers in these communities, they are the largest infrastructure building roads, improving healthcare, the money they make that revitalizes their communities. Everything we do is for the betterment of, yes, us, but our neighbours as well, which is the biggest thing about it. When you have a state which comes in and says ‘we want more money because you should not be making that much money, and we’ve had zero input’, it is insulting at best.
VS: You talk about competition and you look at what is happening in California; certainly there are issues in there with the tribes all at sea with the cardrooms and how they go about play; yet when the initiative filed for sports betting in the city of California, the tribes included some of the racetracks in their initiative. How will that all play out?
LT: California has lottery, it has racetracks, it has cardrooms, it has the casinos run by tribes and that is it. If there is going to be an expansion, tribes want to make sure they are driving the bus. In that regard, they also know to maybe create the opportunities to bring your enemies closer. What I’m looking at is it was very strategic about how the initiative will play out. Because, in Indian country – if you’ve learned anything from these two – nothing happens over night. We have the federal regime that oversees us; we have the Indian gaming regulatory act that requires these tribal state compacts. So the only way for us to ensure we are ready when they pull the switch is for them to give that lee-time of 2022; but it is in that time you have the ability to create this competition among tribes.
It is down in the south in particular where you have the population, you have the market ability for tribes to compete and be supplying for the state and nearby populations; even if they are land-based sports betting. In that regard, one tribe sitting next to the other does not want to see the operator. You now have the ability as operators and suppliers to come in depending on your relationship with the tribes, to have that competition within the state.
It is those who decide they can see what is coming and want to get in which I think is the most important thing for me, versus the intricacies of the strategy to create that playing field. California wants to get into this, the tribes in California want to get in on it and they are creating a pathway to what is their best advantage.
JG: The tribes that are up and running are in unique circumstances, the number one thing you have to realize if you are doing business with Indian country, is that every tribe is unique, every tribe in different states has their very own set of circumstances. Examples are out there, with the likes of New Mexico where the Governor trusted the tribes to run sports betting and are doing a fantastic job running it mainly by themselves, on how tribes can do sports betting. Just exercise your sovereignty and self-determination and go get it done, which is what our message has always been.
