Indian Affairs Committee Concludes Trial Regarding DOJ Wire Act Opinion

Earlier Thurdsay, the United States Senate Committee on Indian Affairs held a hearing regarding the US Department of Justice’s recent Wire Act Opinion.  Below is a review of the proceedings.

1

First to testify was the Honorable Robert Odawi Porter, the President of Seneca Nation of Indian, Salamanca, NY.  He started with his concerns that Indian nations are being dealt a “short hand” in regards to online gaming and was concerned over the potential loss in both tribal jobs as well as revenue.

Porter also expressed concern that online gaming could erode tribal exclusivity in the states where they already have established compacts.  Ultimately, he says that tribes not only demand a seats in the process but should already have their own table in the games.

During the question and answer period, Mr. Porter was asked whether commercial entities had any distinct advantage over Indian tribes in regards to providing online games.  Mr. Porter did not feel that commercial entities had an advantage and even felt that Indian tribes were superior in both regulation and technology.

Mr. Porter was also asked about the impacts on the Seneca nation and what the tribes would need to see to guarantee rights were maintained.  He stated that the Seneca nation employs over 4,000 Indian and non-Indian workers in the state and that they face both job loss and loss of economic resources as a result of online legislation.

The one thing that he asked in regards to guaranteeing Indian rights was that the Indian Nations not be forced to pay again for the rights they already have paid close to a Billion in New York to acquire.

2

The second consisted of testimony from the following:

• Kevin Washburn – Dean of the School of Law istration at the University of New Mexico
• I. Nelson Rose – Senior Professor, Whittier Law School
• Alex Skibine – Professor S.J. Quinney College of Law – University of Utah

Mr. Washburn first gave testimony and gave the opinion that gaming should be a public resource and that states should indeed be able to opt-out of any potential federal legislation.  He also believes that all states have the same concerns and the same interests, so it doesn’t make sense to have 50 different sets of regulations when one set could do.

Mr. Rose then testified how that with the recent opinion on the Wire Act, there are no federal statutes in place to prohibit gambling for states with the exception of sports betting.  However, he did emphasize that tribes will be forced to compete with other online operators if online gambling is legalized in a state.  As such, smaller tribes will likely be left on the outside looking in unless states take steps to allow them in.  He ultimately stated that tribes will be out of luck when it comes to online gambling unless Congress protects them.

Lastly, Mr. Skibine stressed that the IGRA should be respected in forming online gambling legislation.  He then pointed out the three major components of IGRA that stress:

• Tribes have the right to offer gaming as long as it’s legal in the state
• Tribes must own and operate the casinos
• A level playing field between tribal and state interests

During the question and answer period, Mr. Washburn was asked if the DOJ opinion opened the door for intrastate gambling online and would it be beneficial or detrimental to tribes.  Mr. Washburn stated that doing so would violate many state compacts, which is viewed as detrimental, but then also pointed out that the tribes would not have to pay states the a portion of revenue.  However, he did point out that tribes must be compensated for giving up exclusivity.

Mr. Rose was asked about his statement about the DOJ memo being a “gift” and if tribes would be included in the gift.  Mr. Rose reiterated his previous opinion that many tribes will be left out because they don’t have the money or the political clout to force their way into being included.

Mr. Skibine was asked whether the DOJ opinion was a precursor to legislation and he believed it was, but it must be regulated by Congress.  Also, during the Q&A period Mr. Skibine outlined four things that need to be conceded to tribes regarding online gambling.  They are:

• Tribes be recognized to regulate their own online gambling
• Tribes able to offer gaming where legal
• No taxes on gaming
• Tribes should not be forced to modify existing compacts

3

The final to give testimony were:

• Mr. Patrick Fleming – Litigation Director of the Poker Players Alliance
• Mr. Glenn Feldman – Attorney – Mariscal, Weeks, McIntyre & Friedlander

Mr. Fleming opened with his testimony regarding online poker.  He focused his testimony on how poker was different from online gambling based on being a social game, a game played between individuals, and the fact that there is skill involved.  He then discussed how poker has a symbiotic relationship with the casinos and how poker could be used to draw online players into live casinos.

Mr. Feldman then testified and clarified early on that he is neither for nor against online gambling.  He then goes on to state that legalized online gambling is inevitable and that he has told his Indian nation clients that a “just say no” strategy is ineffective.  He stresses that tribes need to be at the table regarding any legislation and that they need to be flexible in their thinking.

Next, he believes that Congress needs to take their time in enacting online gambling legislation.  He pointed out that IGRA took nearly 4 years to come into law.  While he does not necessarily advocate for that long of a period of exploration on online gambling, he thinks that they need to take their time in order to enact good legislation.

During the Q&A period of this , Mr. Fleming was asked whether the DOJ opinion opens other forms of gambling up and what effect it would have on the tribes.  He then talked about how that players who play typical casino games have no social ties to any particular casino and will go wherever the games are.  As such, this will greatly impact tribes.

Mr. Feldman’s response to the final question regarding the potential benefits to tribes was one that may be the most hopeful.  He stated that after IGRA was enacted, nobody could have foreseen the massive growth in Indian gaming.  If internet gambling were legalized, he believes that there will be massive expansion, but on a national scale.  He believes that the tribes need their entitlements recognized and given the flexibility to take advantage of this.  The need to decide for themselves how to accomplish this and they need protections that will ensure that they are given the best chance to succeed.

Indian Affairs Committee Chairman Senator Daniel Akaka then concluded the hearing.  He thanked the participants for their testimony and answers and stated that the issue of online gambling is one that needs to be looked at and they need to help guide the process along.