Tribes vs sweepstakes

The conference chair of the Indian Gaming Association (IGA) has stated that there can be no collaboration between tribal gaming authorities and sweepstakes sites, bluntly telling the latter “we don’t negotiate with terrorists.”

Rocha said that sweepstakes sites were encroaching on tribal exclusivity in gambling

Speaking at the New Normal webinar series, Victor Rocha said that sweepstakes sites were encroaching on tribal exclusivity in gambling and that the time had come to explore options for enforcement.

“You see the entire industry is reacting to this,” said Rocha, before adding: “….you’re starting to see the outrage” in states such as California, where the problem has reached a boiling point.

Limited options

The tension between tribal casinos and sweepstakes sites has been growing as the latter have proliferated over 2024.

Sweepstakes sites operate in states such as California, where sports betting is not legal, by offering free-to-play games. Players can purchase coins to wager, however, which can be exchanged for money.

tribes were granted the right to sue cardrooms in California, which they say are operating illegally

Tribes say the operators violate their exclusivity rights by inhabiting a gray area of the law, although their ability to react is limited. Earlier this year, tribes were granted the right to sue cardrooms in California, which they say are operating illegally. But for online sites, the task becomes much harder.

The guest on the webinar episode was Jonodev Chaudhuri, principal at Chaudhuri Law and former chair of the National Indian Gaming Commission (NIGC). When asked what enforcement options are available to tribes, Chaudhuri admitted that they are limited.

Tribes themselves are required to regulate much of the gaming law and can only serve as a go-between with state authorities, making it difficult to prevent sites from emerging. However, Chaudhuri also noted that there are clear laws about protecting tribal land, which sweepstakes sites operate on.

“In many ways the NIGC has to be somewhat reactive,” Chaudhuri said. “If there is gaming occurring on tribal lands that isn’t run by the tribe, that is a violation of IGRA. How that applies to sweepstakes is a conversation about what is actually going on.”

State inaction

States do not directly profit from sweepstakes sites as with other revenue-sharing models, and as a result are also incentivized to crack down on them. Tribes have repeatedly run into problems in getting state authorities to take the issue seriously.

In some states, such as Florida, tribes have even withheld payments agreed upon as part of revenue-sharing deals in protest of what they see as inaction from state authorities to protect the exclusivity rights of tribes to offer gambling.

Rocha’s fellow host on the show, IGA executive director Jason Giles, said: “This is getting worse by the week.” Rocha compared the encroachment of sweepstakes sites to the construction of a dam upstream from tribal reservations, stating that the problem will worsen with time.

Lastly, Rocha called for dialogue between tribes to discuss and share strategies on how to deal with the threat. “The industry is behind us but we have to lead,” he said. “That’s not an unfamiliar position for us.”