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Could Montana TikTok Lawsuit Clear Path For More Online Casinos?

A challenge to Montana’s ban on TikTok, Alario v. Knudsen, might set new precedents for tribal authorities’ digital sovereignty.

Tik Tok logo on cellphone
Photo by Shutterstock/Daniel Constante
Derek Helling Avatar
3 mins read

The proliferation of online gambling across the United States continues to require courts to apply laws and judicial precedents established decades ago to novel circumstances. The same challenge applies to e-commerce on a broader scale beyond gaming.

An example of such a challenge is the matter at stake in Alario v. Knudsen. While not connected to gambling on its face, decisions by courts in the future could have significant ramifications for online gaming across the US.

Background of Alario v. Knudsen

Montana has banned the use of TikTok within its borders, technically. A decision of the trial court in Alario is currently blocking enforcement of that statute.

At issue in the case is whether a state government has jurisdiction over digital communications on land taken into trust for a federally recognized tribe by the US Department of the Interior.

Judge Donald W. Molloy granted the claimants’ request for a preliminary injunction on Nov. 30, 2023. A trial on the merits of the case is still pending.

The defendant, Montana’s attorney general Austin Knudsen, has appealed the decision on the injunction to the 9th Circuit Court of Appeals. It’s unclear how quickly the 9th could issue a decision on that request.

While the immediate effect of this complaint will determine the fate of Montana’s ban on TikTok, decisions on the lawsuit by subsequent higher courts could have broad implications for tribes’ digital sovereignty.

Could victory spur more tribal online gaming?

There are current legal edifices that allow federally recognized tribal authorities to offer online gambling. Class III Gaming (poker, RNG slots, sports betting, table games) primarily takes the form of commercial agreements with state governments and/or executions of gaming compacts in collaboration with the US Department of the Interior.

In either of those cases, the state government is party to the gaming ongoing. Essentially, the tribes can’t begin offering online casino play, even on their own land, without state involvement.

Alario is not a direct challenge to that concept. Jamie E. Wright, principal at J. Wright Law Group, said there could be some implications for tribal gaming in the ultimate end of the dispute regardless.

“If the petitioners come out victorious, the implications for tribal digital sovereignty could be significant,” Wright said. “A favorable ruling could establish precedent affirming tribes’ authority over digital communications within their jurisdictions, potentially framing tribal governance over digital platforms and services.

In parallel, the evolving legal terrain of online gambling and interstate gaming compacts presents additional intricacies that extend far beyond gaming. The outcome of Alario v. Knudsen has the potential to set a seminal precedent on the scope of federally recognized tribes’ sovereignty over digital communications, transcending implications solely within the gaming sector to impact broader issues of tribal jurisdiction in the digital domain.”

While that might set some precedent for tribes’ digital activity on their own lands, the bigger matter of online gambling on lands that tribes do not control is still being arbitrated.

Courts still working to interpret gaming laws

A question that continues to loom large over online gaming offered by tribal authorities is the satisfaction of the Indian Gaming Rights Act’s requirement that compact gaming only takes place on tribal lands. Put more simply; does an online gambler have to physically be located on such lands for the gambling to be authorized by such a compact?

Existing and theoretical frameworks move to satisfy that precept by placing the servers that host the gambling platforms on tribal lands. The premise goes that because the servers that process the bets are on such lands, the gambling is taking place there even if the person who initiates the wager is not on tribal land.

That’s still a novel and mostly untested legal theory at this point. Alario would do nothing to clarify that situation, either. The case only concerns digital communications on lands in trust.

Then there is also the matter of lands controlled by different tribal authorities within the bounds of the same state. Wright summarizes how the application of current laws to ever-changing technology is playing out.

“Overall, while these cases are intricate and their outcomes are to be determined, they hold momentous potential to influence the foundation of tribal sovereignty in digital realms and impact the regulatory power governing online activities within Native American lands,” Wright added.

Alario could begin to provide some clarity, if it does indeed go to trial. Many questions will remain even after the resolution of that case, though.

Derek Helling Avatar
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Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

View all posts by Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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