As the holidays begin, a quiet announcement in the Federal Register will sound louder than trumpets: The Department of the Interior’s Bureau of Indian Affairs (DoI BIA) issued a proposed rule change regarding the tribal gaming compacting process.
The Dec. 6 announcement stipulates that the BIA is seeking comments on proposed changes to the Indian Gaming Regulatory Act (IGRA) regulations governing the compacting process.
While the summary seems relatively innocuous, the 32-page document could result in a significant modernization of the compacting process. It could even create a pathway for iGaming and mobile sports betting.
That idea currently sits in legal limbo as the DoI and the Seminole Tribe of Florida challenge a federal district court ruling. That ruling struck down Florida’s 2021 gaming compact that allowed the tribe to offer sports betting to anyone within the Sunshine State.
About the Tribal Gaming Compacting Process Announcement
On a quiet Tuesday in December, the BIA issued a proposed tribal gaming compacting process rule change in the Federal Register.
The daily publication is released every weekday. It details new agency rules, proposed new rules, and other public notices related to government actions.
The executive summary for this proposed change shines a glimpse into the agency’s thinking. It notes that the proposed rule changes would “add factors and clarify” how the federal agency reviews “Class III Tribal-State Gaming Compacts.”
The summary notes that the proposed rule modernization comes following evolution within the gaming industry and “ongoing litigation.” That highlights the need to bring IGRA in line with contemporary standards. That’s as opposed to relying on the guidance from 1988 when the statute was passed.
Burying the lede?
While the executive summary promotes modernization, in part, as a result of ongoing litigation, the proposal appears to be significant. Section 293.29, as reported in the Federal Register, is titled, “May a compact of [sic] amendment include provisions addressing Statewide remote wagering or internet gaming.”
As you may recall, the state of Florida and the Seminole Tribe of Florida entered into a gaming compact that allowed statewide mobile sports wagering. But the compact was struck down in November 2021. The DoI and Seminole Tribe of Florida both appealed different aspects of the case. Also, the Court of Appeals for the DC Circuit heard oral arguments on Dec. 14.
The court is likely to decide the case within the next three to nine months.
While the proposed rule changes affect many different sections, the proposed changes to Section 293.29 seem the most impactful for those hoping for mobile gaming or mobile sports betting in states with significant tribal gaming operations.
The proposed rule clarifies that:
The Department’s position is that the negotiation between a Tribe and State over Statewide remote wagering or i-gaming falls under these broad categories of criminal and civil jurisdiction. Accordingly, provided that a player is not physically located on another Tribe’s Indian lands, a Tribe should have the opportunity to engage in this type of gaming pursuant to a Tribal-State gaming compact.
However, the proposed rule does potentially limit the impact of this change. It does so by noting that there will still likely be questions of state law that could restrict statewide gaming. Plus, “federal law may also place restrictions on that activity.”
In answering the question posed by the proposed rule change about whether a compact can include provisions allowing igaming, the agency answers in the affirmative. The agency notes that state law or the compact can deem a bet to occur where the server accepting the wagers is located, subject to a few exceptions.
This was an issue in the litigation over the Florida compact, as the district court held that a bet occurs both where a bettor is and where the bet is received. In fact, Judge Dabney Friedrich called the idea that the parties could deem a bet to occur only at servers on tribal lands a “fiction.”
Could Changing the Tribal Gaming Compacting Process Change Tribal Gaming?
It is important to note that this is a proposed rule change.
Also, the 90-day window for comments is open. The BIA will receive public comments on the proposed changes until March 1.
At that time, BIA will review and evaluate the comments. If the changes are adopted, the agency will set an effective date.
While this seems like an easy fix and one that would solve a lot of problems, it looks like there is at least a possibility that someone will challenge it. The challenge may center on the agency’s ability to make this change through administrative rules.
We saw a congressional bill introduced before that would have clarified that the IGRA permits mobile sports wagering. However, that failed to gain sufficient traction.
Ultimately, congressional action may be the ideal route for modernizing IGRA.
Still, if permitted to stand after any potential challenge, these proposed rule changes would add significant clarity. They could modernize IGRA. They could allow tribes to engage with states to offer iGaming and mobile sports wagering through the compacting process.