Online Gambling Harms Tribes, Seneca President Tells Senators
Legal online gambling could have harmful effects on American Indian tribes who depend on local gambling revenue to support their communities, witnesses said at a Senate Indian Affairs Committee hearing Thursday. The Justice Department’s recent opinion concerning the federal Wire Act’s implications for online gambling could open the door for states to legalize Internet gambling, which in turn could deplete the demand for tribal brick and mortar gambling operations, they said. But the Poker Players Alliance said Internet poker is not a threat to tribal operations because Internet poker is fundamentally different from other online gambling.
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The Unlawful Internet Gambling Enforcement Act (UIGEA) blocks payment processing of U.S. Internet gambling wagers, but some lawmakers have expressed hope that legalization could generate significant revenue for state and federal governments and curb abuses in the offshore gaming market. The push for Internet gambling legislation got a boost in December when Justice confirmed that the federal Wire Act does not prohibit online lotteries and non-sports related Internet gambling (WID Dec 28 p1). Justice concluded that “interstate transmissions of wire communications that do not relate to a ’sporting event or contest,’ fall outside of the reach of the Wire Act.”
"Internet gaming could cause great injury to all of us who depend upon our existing businesses,” said Robert Porter, president of the Seneca Nation of Indians. The Justice opinion could expand Internet gambling beyond physical borders, which would enable large gambling companies to “prey upon and seize business opportunities from our patrons,” he said: “Indian tribes have invested billions into creating physical, brick and mortar casinos, and the introduction of Internet gaming would create significant harms to tribal nations.”
"We will not tolerate any legal authority that will result in job losses in Indian country or that shoves aside large, successful native gaming operations,” Porter said. “Indian nations not only demand a seat at the table, we insist that we already own our own table and that we shouldn’t have it stolen from us as has been so often the case in the past.”
The large gambling corporations in Nevada and New Jersey that are pushing for Internet gambling legislation only seek to “bestow upon themselves a monopolistic control of Internet gambling operations,” Porter said. “This brazen power grab is premised on a lie, a fiction that the big Nevada and New Jersey interests are alone sophisticated enough to operate Internet gaming in the first place. The Seneca Nation and dozens of other nations are at least as sophisticated if not more so in terms of the management, security, oversight and regulation.”
But Poker Players Alliance attorney Patrick Fleming said “it’s clear that Internet poker is not a threat to tribal operations.” Fleming argued that in contrast to other online gambling, Internet poker is a social game and a game of skill that brings people together and creates more return customers for tribal nations. “Internet poker functions differently from Internet slot machines, Internet roulette and other games and presents not a threat to the tribes but an opportunity that can bring people into their land-based casinos and operations.”
Though Porter couldn’t say whether Internet poker would create significant harms to tribal nations, he said there are “slippery slope” concerns with the legalization of Internet poker. “If it opens up all forms of gaming, that’s where we become concerned.”
"Tribes have more to lose from the expansion of Internet gaming than any other segment of the gaming industry,” said Glenn Feldman, an attorney with Mariscal, Weeks. Feldman formerly represented the Cabazon Band of Mission Indians in Riverside County, Calif., and successfully argued their tribal gambling case, California v. Cabazon, before the Supreme Court in 1986. “I think it is entirely appropriate for Congress to give some consideration to that potential loss of exclusivity and protect it in some way,” he said. “Tribes can’t afford to lose that revenue stream. So any federal legislation needs to incorporate protections to ensure that revenue stream is not impacted.”
"New Jersey will be legalizing Internet gambling this year,” said Nelson Rose, a professor at Whittier Law School. “We are going to see Internet gambling legalized in every state and unless Congress figures out a way to protect the small tribes I think a lot of the tribes will be out of luck,” he said. “The big tribes can protect themselves from competition from state programs, but it is up to Congress to protect the rest, particularly small tribes located away from cities. It is a problem that needs to be resolved now,” he said.
Kevin Washburn, dean of the University of New Mexico School of Law, agreed that Congress should act to protect tribal interests. “We have created a resource here, $30 billion in 2009 alone,” Washburn said. “Internet gaming causes some risk to that very strong revenue source and if that revenue source goes away Congress will have to step in.”