New Mexico May Ban Online Gambling To Appease Tribe

• Published: April 19, 2013
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A controversial gaming compact between the state of New Mexico and an Indian tribe holds the possibility of throwing online gambling under the bus. And it represents what could become a pattern on the part of tribes around the country when it comes to its attitude toward the potential spread of legalized online casinos.

The compact is being negotiated, and as part of it the Navajo Nation would insist that for the state to participate in revenues from slot games at the Navajo casinos, it would have to institute a ban against online gambling of all kinds.

The flip side of the deal is that if the state were to allow any online gambling, the tribe would be entitled to keep all of its slot game revenues, pending "good faith negotiations" surrounding a revenue share with the state that would have to include studies as to what kind of effect the online casinos would have on their own land-based establishments.

The Navajo nation wants it even sweeter than that, though; if they intend to explore the option of online poker themselves, they would be entitled to keep all the revenues derived from such a thing, without having to share any of it with the state.

This could be the beginning of a precedent. Indian tribes know that they produce a lot of money, and individual compacts determine the amount of money the state can receive. They can use those revenues for leverage to influence states when it comes to the urge to legalize online gambling as a revenue source. Nevada, New Jersey and Delaware, which have approved online gambling, do not have any prominent presence of Native American casinos, so they don't have to worry about things like that. But other states do.

The tribes, as a group, are convinced that in areas where online gambling is legislated, their revenues are going to be reduced by up to 25%. They consider it an inherent part of the tribal-state compact that their businesses should be protected, although exclusivity, either explicit or implied, does not really exist. The interesting part is that there are tribes that are very intrigued by online gambling and are investigating the possibilities involved. Will that lead to some division within the ranks?