Indian Tribes Establishing Their Own Online Gambling Industry (Part III)


Posted: July 3, 2015

Updated: July 3, 2015

The boom of the tribal internet gambling industry opens serious debates concerning the online gambling laws in US

As GamingZion remarked in our previous article on the Indian gambling industry that the current US gambling laws cannot under any criteria be qualified as stimulating for the online gambling industry in general. Consequently they are not favorable for the tribal gambling industry in the US neither.

• Indian tribes establishing their own internet gambling
• Indian gambling providers can technically license themselves
• Loss of power and revenues for the US Government

The fast development of the Indian internet gambling market is something that the US gaming legislative cannot cope with, gambling news report. For instance, the first problem that an Indian online gaming operator in California faces in this respect is the acquiring of a license. The problem is not how to get the license but that there is no such license to be get in the first place. What can the Indian tribal operators do in such an environment? The answer is easy: give a license to themselves.

Can Indian tribal gambling operators license themselves?

Itasca County Minnesota

In 1972 the Chippewa reservation resident took the state to court about having to pay state property tax for his trailer standing on federal territory. The precedent court ruling opened the way for tribes exempting themselves from state gambling bans.

Many would ask whether this is a possible solution at all. And the answer is that technically this can be done. The current legislation allows for any tribal operator that successfully conducts the operations belonging to class II, according to the Indian Gaming Regulatory Act (IGRA), for at least three years, to apply for becoming self-regulating body. Most of the Indian gambling operators saw this option viable and already applied for becoming self-regulating. The possibility for self-regulation springs out of the fact that while in order to provide class 3 gambling activities one needs an approval by the state, this is unnecessary for class 2 gambling operations. So how to account from these regulations regarding internet gambling in the US? And since bingo and poker belong to class 2, than the natural thing to suppose is that online poker will too belong to this category. This means that online poker for instance can be self-regulated by the Indian tribal regulation bodies.

But things are not as so simple. This comes from the option to view online poker or bingo not as belonging to class 2 but to class 3. According to the Indian Gaming Regulatory Act (IGRA) a game belonging to class 2 can be treated as a game belonging to class 3 if the latter is an “electronic or electromechanical facsimile” of former. But who can account for this difference? Before the appearance of the internet, paper games were considered to belong to one group and games played on machines into another. This being the case, games like bingo, poker, pull tabs were classified in class 2 and others such as video poker, the slots etc in class 3. However this is not a clear cut distinction. For example bingo stayed in the second class even when computers/machines were used for its conduct. Although not precised the question of how these games will be treated and to which class they will belong is of crucial importance for the future of Indian internet gambling.

The consequences of establishing autonomous tribal internet gambling

Kahnawake Mohawk banner

The Kahnawake Mohawk Territory in Quebec, Canada is already one of the biggest online gambling hub of the world. Their gaming commission licenses numerous international casinos operating worldvide

If online poker and bingo belong to class 2 then they can be self-regulated by the Indian tribal gambling operators. In case they are considered to be class 3 then they will need to be conducted in accord with the particular states regulations too. On the other side, none of the states in US were satisfied with IGRA since none of them wanted additional body that can impose an independent authority on gambling. Because of this California made an initiative in the past to put nontribal and tribal operators in the same category so that all of them could be subject to the regulative laws of the state. In other words this was a proposal to withdraw the tribal sovereignty in the case of online gambling. However, this proposal was refused promptly by all the tribal operators, on the base of political considerations, according to gaming news.

Nowadays Indian tribal operators are claiming that they are lawfully warranted according to US gambling laws to conduct online gambling games as part of class 2. But additionally they ask why this distinctions matters in the first place if the gambling services can be offered only on Indian territory? Internet allows us to play poker from different locations in the world while the server provides the game to be on yet another location. According to the new international regulations the wagers or bets take place in the computer server of the provider of the game.

The gambler can be anywhere in the world. In the case of the Indian tribes this means that a tribal operation can be taken from any place on the globe. If this is the case then the consequences for the US gambling industry will be devastating. That would practically mean that since a tribe can impose its own authority in the international economy, the US government will lose all its power and current revenues. The political consequences can be even more far reaching going in the direction of allowing not just limited tribal sovereignty to the tribes but independence.

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