Senate Committee on Indian Affairs Ponders Internet Gaming in Wake of DOJ Opinion

A convergence of gaming industry minds on Capitol Hill Thursday afternoon featured discussion on how tribes would be affected by a looming Internet gaming industry — one that was given a serious boost from a Department of Justice legal opinion released in late 2011.

Robert Odawi Porter, President of New York’s Seneca Nation of Indians, began the hearing in front of the Senate Committee on Indian Affairs by throwing haymakers against the commercial gaming industry. He said that Nevada and New Jersey casino interests have been engaged in a “brazen power grab” for “monopolistic” control in pushing for a federal bill.

Repeated efforts for a federal online gaming bill have failed, thus far, to gain any real traction in Congress. One of them — Rep. Joe Barton’s poker-only bill — was the subject of November’s hearing, where it was blasted by the chairman of the National Indian Gaming Association.

Porter said that tribes “not only want a seat at the table” when discussing a federal regime and implications for their exclusivity, but that “we already own our table and don’t want it stolen from us.”

Porter admitted during his testimony that Internet poker specifically hasn’t harmed his tribe’s gaming business, but that other games form a “slippery slope.”

With the 1961 Interstate Wire Act now being obsolete in preventing intrastate gaming, Kevin Washburn from the University of New Mexico testified that Congress’ hand is now forced.

He referred to a state-by-state approach to Internet gaming as “schizophrenic.”

Washburn added that it is “far more efficient” to federalize the industry. Tribes, he said, have become dependent on gaming revenue.

Also present was gaming law professor I. Nelson Rose, who testified that big tribes can “protect” themselves, but that “it’s up to Congress to protect the rest.”

In an effort to protect Connecticut’s tribal gaming industry against an arms race for more casinos in the Northeast, the governor there has advocated online gaming and could give complete control of it to the state’s tribal casinos — Foxwoods and Mohegan Sun.

Rose testified that tribes would be left out under a state-by-state patchwork unless a state voluntarily “brings them in.”

Rose said that very few states will not move forward with Internet gaming, and for example, New Jersey will legalize the activity this year — giving complete control to Atlantic City casinos. According to Rose, California, another state considering the industry, could charge $100 million for an online gaming license — leaving its small tribes out in the cold.

Appearing on behalf of the Poker Player’s Alliance, attorney Pat Fleming spoke on what he believes to be the difference between Internet gambling and Internet poker. While explaining the social aspect of poker, Flemming said that if online poker was legalized it wouldn’t be a “threat” to tribal gaming revenue. According to Flemming, the rake from poker represents only one percent of the total tribal gaming win.

He added that online poker can increase interest in live poker.

No witness testified against online gaming, but tribal gaming attorney Glenn Feldman, the final witness at the hearing, said that Congress would be making a mistake if it rushed through the process of legalization. He pointed out a number of statutes that he believes still muddy the water for interstate gaming.

The hearing concluded without any formal action and no word on a followup meeting.

Follow Brian Pempus on Twitter — @brianpempus

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