New York online sports betting has been a revolutionary move in the gaming industry, but at what cost? The increased involvement of commercial operators could mean fewer opportunities for tribal online casino operators. Although online casinos are still in the early stages of development in the state, it has become clear that commercial online casino license holders will be the primary recipients of such licenses, leading to fears that tribal entities may be left out of this system. With this extended tension between tribal and commercial entities, many worry about the potential consequences of diminished relationships in the upcoming years.
NY Tribal Gaming Compacts Can Be Confusing
In 2019, New York made a move that caught the attention of online casino operators all around the country. The legislation was passed to legalize retail sports betting which opened the door for tribes to open up places of business in their communities. Under the state/tribal compact three tribes – The Oneida Indian Nation, Saint Regis Mohawk Tribe, and Seneca Nation – were permitted to start retail sports betting services.
Over time, however, commercial enterprises were allowed to offer in-person gambling as well. According to Kathryn Rand–co-director of the Institute for the Study of Tribal Gaming Law and Policy–in an interview with Tribal Business News:
“[The] 2019 law authorized in-person, retail sports bets. Existing state compacts expressly permit tribes to operate any Class 3 game that is subsequently legalized by the state. As a result of that automatic amendment provision, no additional amendments were necessary to authorize tribal sportsbooks.”
Rand revealed that it was effortless for tribes to present this modern form of gambling, as the state/tribal compact classified it under “Class 3” gaming. Unfortunately, when New York approved online sportsbooks, matters became unclear and more complex.
Tribes Were Left With Very Few Options
The launch of online sports betting in New York presented tribes with very limited avenues of participation, essentially making them outsiders in the industry. According to the state gaming law at the time, bets had to be made through servers that were physically located on the grounds of commercial casinos.
Consequently, the number of options left for Tribal entities was restricted – they could build their product from start and request a license from the state or partner with commercial operators for profit-sharing opportunities. The latter option proved more lucrative for tribes, who directed their efforts toward forming alliances. For instance, Oneida Indian Nation and Saint Regis Mohawk Tribe tied up with Caesars Entertainment while Seneca Nation connected with FanDuel in pursuit of revenue-sharing deals.
Conflict Could Arise Establishing Online Casinos In NY
The push for legal online casinos and poker in New York presents a unique opportunity for tribal nations. Renegotiating revenue-sharing agreements with commercial operators could potentially introduce them to these new ventures, such as FanDuel and Caesars who have already succeeded in offering these services in neighboring states.
Unfortunately, not all tribes may be eager to digest this new policy due to the strained relationship between tribes and the state of New York since 2022. In that year, the Seneca Nation was required to credit 566 million dollars towards Governor Kathy Hochul’s stadium building project despite objections; a clear indication that Tribes need more control or autonomy over their finances and policies if they are going to willingly opt-in to any intergovernmental arrangements.
Through a radio advertisement, the tribe stated:
“The state of New York just received hundreds of millions of dollars from the Seneca Nation. The additional funding gave Gov. Hochul a great opportunity to help repair our roads, build hospitals, fix our bridges, and support our schools. What did she do instead? She gave away hundreds of millions of dollars to build a football stadium for the NFL.”
