Share
President-Elect Donald Trump has nominated North Dakota Gov. Doug Burgum as the next Secretary of the Interior, which could be a problem for tribal gaming interests.
While Burgum has yet to be confirmed for the office, the United States Dept. of the Interior (DOI) has an important role in tribal gaming, and Burgum has previously opposed the easiest path tribes have to offer games over the internet.
In his time as North Dakota’s governor, Burgum expressed skepticism about the legality of the “hub-and-spoke” model that some tribal gaming operators have used to offer online gaming. That could signal the potential reversal of current policies favorable to that practice.
Such reversals may inhibit tribal gaming authorities from going down the hub-and-spoke route to expand their offerings. Other options exist for parties interested in launching online casinos but they might prove less attractive.
Burgum’s history with tribal gaming
In 2022, Burgum negotiated new gaming compacts with five gaming authorities operating in North Dakota. Amid those negotiations, Burgum weighed in on the tribes’ attempts to bring online gambling to the state via the hub-and-spoke system.
“While we understand and appreciate the desire by some of the tribes to extend online gaming beyond their reservation boundaries, a clear legal path does not exist for the governor to grant such a broad expansion of gaming in the compact,” Governor Burgum said in a news release.
To understand the significance of Burgum’s comment, it’s necessary to comprehend what a hub-and-spoke model for online gaming is and why it’s legally controversial.
Hub-and-spoke is an analogy
The term hub-and-spoke refers to parts of a wheel, with the hub being the center and the spokes connecting that center to the outer parts of the wheel. In the context of online gambling, it’s a way for tribal gaming authorities to satisfy the language of the Indian Gaming Regulatory Act (IGRA) and offer online gambling throughout the state.
The IGRA governs gambling agreements between tribal governments, the US government, and state governments, which are gaming compacts. Most but not all tribal gaming within the US happens under these contracts.
Among other things, the IGRA stipulates that compact gaming can only take place on lands controlled by the tribe that is party to the compact. In a hub-and-spoke model, such land acts as the hub.
Tribal gaming operators maintain the servers that process online wagers on their lands. Because that’s where the process of accepting the wager and paying out any winnings takes place, proponents of the system argue, that satisfies IGRA.
The spokes in this model are the apps or websites that players access online. Critics of the system contend that placing servers on tribal lands does not satisfy IGRA, thus making online gambling offered by tribal authorities illegal outside of tribal lands.
Amid legal obscurity, online gaming under the auspices of a tribal authority using the hub-and-spoke model is in progress in one US jurisdiction.
Seminole Tribe employs hub-and-spoke gaming in Florida
In Florida, the Seminole Tribe enjoys a state-sanctioned monopoly on legal sports betting. While that includes in-person wagering, online betting via the Hard Rock Bet app and website act as the main spokes.
This system has survived numerous challenges in federal and Florida courts, although federal courts did not directly rule on whether the hub-and-spoke model violates the IGRA. Instead, the cases focused on whether current Sec. of the Interior Deb Haaland failed her duty by letting the statutory window for consideration of the compact between Florida and the Seminole Tribe pass without taking any action.
Approval from the DOI is necessary for gaming compacts to take effect under IGRA. US law says that inaction on submissions through 45 days is tantamount to approval for gaming compacts.
The US Supreme Court declined to review the Seminole Compact case, and there have been no subsequent challenges in Florida state courts since. Thereafter, Haaland showed further support for the model, but that is something Burgum could change.
How Burgum could alter DOI’s stance
On Feb. 21, 2024, the DOI’s Bureau of Indian Affairs (BIA) issued a new rule, essentially stating that including the hub-and-spoke models for online gaming would not prevent the BIA from approving compacts or compact amendments.
However, this is a regulatory direction and not an adjustment to IGRA itself. Rather, it’s basically the BIA telling interested parties how it plans to interpret IGRA.
As such, Burgum could change this rule if he is confirmed as the next Sec. of the Interior. Burgum’s comment from 2022 does not guarantee such a reversal but it does allude to him taking a less favorable view of hub-and-spoke absent any changes to IGRA by Congress.
In turn, that may limit the ability of other tribal gaming authorities to replicate what the Seminole Tribe of Florida has accomplished, at least for the short term. Tribal authorities operating within states similar to Florida may need to pursue other avenues.
What are the other options for tribal online gaming?
Compact gaming is a popular choice among tribal bodies, but it’s far from the only choice. Other states have worked out commercial agreements with tribal gaming operators.
Connecticut is a stellar example of a possible alternative. The state enacted legislation authorizing online casino play statewide while giving the two tribal casino operators within the state the exclusive rights to offer such gaming.
Arizona’s and North Carolina’s frameworks for regulated sports betting are other examples of a state incorporating tribal interests into its online gaming expansion, albeit not exclusively as in Connecticut.
Burgum’s potential resistance to hub-and-spoke online gaming could put more emphasis on tribes’ relationships with state governments and their willingness to expand gambling on a broader basis. The result would look similar but the route to that point would be very different.
Burgum’s history shows amenability to the expansion of land-based tribal gaming but it’s difficult to say the same with online gambling. If he is the next Sec. of the Interior, tribal interests in that vein might need more support from state governments.
