Tribes Undecided About Benefits of Online Gambling Legalization
Indian tribal leaders have significant concerns about federal efforts to legalize and regulate Internet gambling, they said at a Senate Indian Affairs Committee hearing Thursday. Internet gambling is illegal in the U.S. under the Unlawful Internet Gambling Enforcement Act (UIGEA), though some lawmakers have expressed hope that legalization could generate significant revenue for state and federal governments and curb abuses in the offshore gaming market. But tribal leaders said existing legislation would put them on unequal footing with established commercial gaming sites and fail to honor the sovereignty of their tribal agreements.
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Sen. Al Franken, D-Minn., was reluctant to support Internet gambling legislation because he said it might threaten existing Indian brick and mortar gaming operations. “I would imagine it is something Indians would be very wary of and would want some stake in if it were part of the gaming horizon,” he said.
The prospect of Internet gaming does pose financial risk to tribal economies and unfairly disadvantages the ability for tribes to compete, said Glen Gobin, vice chairman of the Tulalip tribes. Gobin said tribes are undecided if Internet gambling would benefit them since many tribes still lack the technological infrastructure to manage large-scale online gambling operations. “If it turned on tomorrow I don’t think all tribes are ready; a handful may be, but I don’t believe most of them will be,” Gobin said. And it would be difficult for tribes to compete with large corporate gambling firms, Gobin said: “There is no brand name recognition.”
Bruce “Two Dogs” Bozsum, chairman of the Mohegan tribe, asked that native tribes have more say in the formation of Internet gambling legislation and equal footing to compete if Internet gambling is sanctioned. “We need a fair and level playing field … there needs to be laws and structures in place to protect tribes,” Bozsum said: “We need to make sure we are at the table working out the details of what that policy may be. If you are not at the table for dinner you will be dinner.”
Advocates for Internet gambling are “willing to come half way,” Bozsum said after the hearing. “We have the juice on them. We'll get to the point where they are willing to take away the federal tax on us."
Taxation is “a thorny issue but one that can be solved,” said Alfonse D'Amato, a former Republican senator from New York and current chairman of the Poker Players Alliance. Customers could pay fees to participate in licensed online gambling sites, he said. Internet gambling legislation can protect the sovereignty of tribal nations and not put anyone at a disadvantage, D'Amato said. “One thing that is not a win-win is allowing the status quo to exist,” he said. “Why leave this very ambiguous situation where you have shady operators from offshore sites?”
The lack of regulation of the Internet gambling market has enabled bad actors to take advantage of online gamblers, said advocates for Internet gambling legislation. Federal authorities recently acted to block U.S. players from accessing three of the top poker websites, Full Tilt Poker, Absolute Poker and PokerStars, and in April prosecutors in Manhattan charged 11 people with bank fraud, money laundering and illegal gambling (WID April 18 p6). “Right now the people basically in this country are not protected,” D'Amato said. “You have dozens and dozens of offshore sites operating without any supervision,” he said. “If you want to stop illegal activities you have to regulate it.”
Committee Chairman Daniel Akaka, D-Hawaii, said he plans to hold additional hearings to address the issue before a Senate Internet gambling bill is introduced. “It’s clear that this is a very complex issue and I feel that we have just scratched the surface of the issues here today. There are other tribes and stakeholders that we need to hear from,” Akaka said. The Senate has yet to introduce an Internet gambling bill this session but there are three bills pending in the House.
Rep. Joe Barton, R-Texas, introduced HR-2366 in June, which would legalize online poker playing by requiring Web gambling sites to obtain licenses and maintain a database of all their online poker players. The bill would also establish an office of Internet poker oversight in the Department of Commerce, amend UIGEA and prohibit players from using credit cards for Internet gambling. Lawmakers raised significant concerns at a recent House Commerce, Manufacturing and Trade Subcommittee hearing about the logistical and technical problems associated with legalizing Internet gambling (WID Oct 26 p1).
The National Indian Gaming Association (NIGA) opposed Barton’s bill because it said it would violate the core principles of tribal leaders concerning gambling rights, said NIGA Chairman Ernie Stevens. Specifically, the bill fails to treat tribes as government operators, would tax tribal government revenue and would violate existing Indian Gaming Regulatory Act (IGRA) rights, he said. If Congress proposes any further Internet gambling legislation it must acknowledge that tribes are eligible to operate gaming sites, allow customers to access tribal gaming sites where permitted, prohibit the federal government from taxing tribal Internet gambling revenues, protect existing IGRA rights, and preserve current Indian laws, he said.