Law Blog: Insights from the 2012 Western Indian Gaming Conference

Topics: Epic Poker League, Law Blog, Online Poker, Legislation

It was my first gaming conference, and I was rather excited to attend. With this column needing pertinent information and my desire to learn more about Internet gaming in general, especially in my home state of California, the 2012 Western Indian Gaming Conference at Morongo Casino - a drive of less than two hours from my home in Los Angeles - seemed like a perfect way to begin understanding the complexities of the positions of Indian tribes toward online gaming.

Going into the conference, what I knew about Indian tribes and their feelings about online gaming was limited to information from Congressional hearings and links provided by Victor Rocha’s daily updates on Twitter and his website. But after several seminars and discussions with influential people like Rocha, I have a much better understanding of this perspective.

The bottom line for many Indian tribes is that online gaming is terrifying. Many reservations and communities rely heavily on revenue from Indian-run casinos for basic needs and services, and the idea that a company like PokerStars or Caesars Entertainment could, with a Congressional vote and Presidential signature, do significant damage to that revenue stream was devastating.

Steve Stallings of the Rincon Band of Luiseno Indians put it best in the Internet gaming seminar: “We wanted it to go away.” However, most Indian nations realized that they could not ignore it. Over the past few years, the increase in public demand for a legalized and regulated online gaming industry have prompted Indian tribes with a reliance on gaming to examine the issue, take a stand, and participate to ensure their voices are heard.

To put it simply, there are tremendous concerns that a federal online gaming bill will ignore the sovereign rights of tribes as previously secured in the Indian Gaming Regulatory Act (IGRA) of 1988. There are also significant worries that companies like Caesars and MGM are substantially more prepared to launch Internet gaming platforms and have the name recognition to dominate the market from the outset. In addition, anything beyond online poker-specific legislation will encroach upon brick and mortar revenue and severely impact tribes’ well being.

Many Indian tribes in California are more prepared to face intrastate gaming than anything done on a federal level. Leaders know that they have a voice in California, and their concerns will be addressed by any legislation on the table. They will have more of a say in how many licenses are issued and assuring that all licensees start on the same date and have the same rights, with tribal compacts honored. An exclusion of companies like PokerStars, which have allegedly violated U.S. laws, and larger companies like MGM that have no hold on California gaming will give Indian nations more of an even footing.

On the other hand, federal legislation has taken little consideration to include Indian tribes in writing previously introduced bills or negotiations to improve them. Allison Binney, who formerly worked for Sen. Byron Dorgan (D-ND) in Washington, D.C. and is currently a partner at Akin Gump Strauss Hauer & Feld, spoke to seminar attendees at length. She said that there is no spokesperson in Congress specifically for Indian online gaming issues, meaning there is no Senator or Representative who can speak for the tribes and their views to ensure their voices are heard. Senator Dorgan tried to take a stand against Reid’s bill in 2011 by threatening to withhold all votes if Indian concerns weren’t address in the gaming bill, but when Reid asked what tribes wanted, Dorgan had to confess, “I don’t know.” It was one example of how there is no true consensus among all tribes and no concrete proposals for Indian concerns about Internet gaming.

Ernie Stevens, spokesperson for the National Indian Gaming Association (NIGA) who has spoken at Congressional hearings, noted that there was a NIGA resolution in October 2010 that lists Internet gaming legislation demands. NIGA has also developed a set of principles that they made publicly available with regard to their concerns with federal bills. As NIGA consists of 184 Indian nations, it is viewed as somewhat of a consensus, though not all tribes subscribe to the principles. And without a representative in the Senate and in the House of Representatives to ensure that the collective voice of NIGA is heard, the problem of non-representation remains.

State legislation, as mentioned before, could benefit tribes in California if they are given enough time to prepare and the regulation is confined to poker only. State Senator Roderick Wright (D) reintroduced his bill, SB 45, on January 31, 2012, and that bill seeks to legislate the whole of Internet gaming. Senator Lou Correa (D), on the other hand, previously introduced SB 40 specific to online poker, and tribes have had more input in this bill than SB 45.

George Forman of Lewis and Roca spoke from his background as a tribal attorney and reiterated that there is “nothing good” for Indian tribes in federal legislation, though California could use the revenue, as could tribes as intrastate online poker could boost business opportunities. He noted that recent compacts with tribes could also cost the state money, which could be made up for with online poker revenue, especially with the large population already in place.

The California Online Poker Association (COPA) supports the online poker plan for California. COPA is a coalition of 29 tribes and 30 card rooms promoting intrastate Internet poker, so much so that they established a free online poker room called CalShark that offers poker to the public. They assert that the state’s Gambling Control Act not only allows Internet poker to go forward but prohibits out-of-state gaming operators from owning more than one percent of the venture, which makes it appealing and important that California ensure its own place in the gaming environment.

Those are the basics. I plan to interview representatives of COPA, NIGA, and the California Indian community in the coming weeks to dive deeper into some of the issues.

For now, I want to conclude with some information provided at WIGC regarding the regulation race. Allison Binney noted that though she doesn’t expect federal online gaming regulation to pass in 2012, there is a better chance this year than in past years. In addition, she mentioned that Senator Harry Reid (D-NV) and Senator Jon Kyl (R-AZ) may be closer to proposing a Senate bill than the public is led to believe. Not only is Reid anxious to keep his supporters/contributors in Nevada happy, but Kyl wants to keep promises before his exit from Congress. It seems likely that any piece of legislation would be introduced quickly and attached to another piece of legislation, as a stand-alone bill must acquire 60 yes votes in the Senate. An add-on bill should add votes to a piece of legislation but, more importantly, not subtract votes, and if this can be done, expect Reid to make an attempt during the current session.

In a matter of deductive reasoning, imagine this: Reid is able to push a bill through the Senate on a must-pass bill that also passes the House, and President Obama signs it. Should this happen soon, before New Jersey or California - or any other state, for that matter - enacts intrastate legislation, Nevada would be the only state with an intrastate law already in place. If the bill is written to grandfather in any state with said law on the books, and Nevada is the only one, Reid’s state has a leg up on the industry.

Anything is possible at this stage of the game. California has two bills to consider. The United States Congress also has two bills to consider. This game is playing out in multiple dimensions, with no clue how they will remain parallel or intersect: federal laws, state laws, online poker sites, state lotteries, Indian tribes, casino resorts. Let’s see who wins the next hand, which could be a big one.