Rocha, Conference Chair of the Indian Gaming Association (IGA), was joined by colleague and IGA Executive Director Jason Giles. This week’s guest was Jonodev Chaudhuri, principal at Chaudhuri Law and former chairman of the National Indian Gaming Commission (NIGC).

The theme of the episode was regulation and enforcement. More specifically, Rocha and Giles sought to know what tools the NIGC—and state and federal governments—might use to combat the proliferation of lotteries.

“You’re seeing the whole industry react to this,” Rocha said. He noted that among California tribes in particular, “you start to see the outrage” that usually follows attempts to encroach on tribal exclusivity.

He later claimed that there is no room for inter-tribal cooperation and raffles. “This is not a dialogue, this is not a discussion – we are not negotiating with terrorists,” he said.

Chaudhuri: NIGC must be ‘reactive’

Chaudhuri, who served as NIGC chairman from 2013-19, explored the nuances of tribal gaming regulation. He explained the story of Indian Gaming Regulatory Act (IGRA), the 1988 federal legislation that established the framework for Indian gaming in the United States. IGRA also established the NIGC, one of the federal agencies involved in tribal gaming.

On enforcement, Chaudhuri acknowledged that the commission is somewhat limited in its abilities. Tribes themselves are the primary regulators, and the NIGC complements these efforts and serves as a link to the government. In some cases, states also play a small role in regulation. The commission is also largely limited to guidance by IGRA. Because of this, it is difficult to come out in front of new developments.

“In many ways, the NIGC has to be somewhat reactive,” Chaudhuri said.

But he noted throughout the discussion that IGRA has express provisions that tribes must be the primary beneficiary and have exclusive interests in gaming operations. It also has clear guidelines to protect Indian lands.

“If there is gambling on tribal land that is not operated by the tribe, that is a violation of IGRA,” he said. “How it applies to sweepstakes is a conversation about what’s actually happening.”

Application options vary for tribes in California

If an entity is determined to be operating illegally on tribal lands, Chaudhuri said there is scope for enforcement. They are applicable to any entity, whether tribal or, in the case of sweepstakes, commercial.

He mentioned fines and closure orders as simple examples. “I wrote letters like that when I was (at NIGC),” he said. The NIGC also has the ability to review games at the request of tribes and rule whether they are Class II or III. But those cases are much more difficult when the provider is not involved, which seems to be the case here.

Given that tribes are the primary enforcement agencies, they can also take similar action. Rocha and Giles asked if, theoretically, all of the state’s gaming tribes could take such action collectively against lotteries.

Chaudhuri did not go so far as to endorse it but said it is technically possible. But he again stipulated that this applies to tribal lands, noting that there is “no uniform compact” in California. Each tribe has its own compact with the state.

Compacts play a large role in this discussion

The role of compacts in this debate was mentioned several times. Chaudhuri pointed out that “many compacts will have provisions in the revenue-sharing parts” of the agreements that make them void if any illegal expansion or breach of exclusivity were to take place.

Indian Country, in general, does not pay taxes to a state for gambling that takes place on its land. But in some cases, tribes agree to revenue-sharing agreements with states. As an example, in Florida, the Seminole Tribe pays the state hundreds of millions per year as part of its agreement with the state. But the tribe withheld these payments beginning in 2019 when it claimed the state was allowing commercial card rooms to encroach on its exclusivity.

Since states often benefit from revenue sharing, they also have an interest in stopping sweepstakes to ensure that their revenue reduction is not nullified. But getting state and federal officials to recognize that significance is a challenge, even for the NIGC.

“It’s a never-ending training challenge,” Chaudhuri said. He explained that the NIGC is constantly working with other officials and agencies to recognize the importance of Indigenous issues. This obstacle applies not only to sweepstakes but also to games of skill, card rooms and other forms of gambling that could be seen as an infringement of exclusivity.

“This is getting worse every week”

In closing, Giles and Rocha again emphasized the importance of the issue as it relates to California tribes.

“This is getting worse every week,” Giles lamented, referring specifically to latest launch of Legendz social casino and sportsbook in 43 states, including California. Rocha agreed, using the analogy of a company building a dam upstream from a reservation. The consequences may not be immediately noticeable, he said, but future infrastructure will undoubtedly be affected.

For future episodes, Rocha mentioned the need to talk to tribes in Connecticut and other states that appear to be take a more direct approach to these websites.

“The industry is behind us but we have to lead,” he concluded. “It’s not a foreign position for us.”