Internet Gambling: How involved are the Indian tribes?

Last November a law went into effect which made financial transactions to online gambling websites illegal, the so-called UIGEA.

Internet Gambling: How involved are the Indian tribes? Many are willing to blame the Republicans for this law, although it was passed by both Republicans and Democrats. And the only attempt to "repeal" the law came from Rep. Barney Frank (D-Mass), which, of course, had nothing to do with repealing the law, but with further limiting the presence of the offshore Internet gambling companies in the United States.

Funny thing about Mr. Frank's proposed bill is that it does not make offshore online gambling legal, and the individual states can continue banning online gambling at their sole discursion. The Indian tribes, however, could opt-in to run Internet gambling websites within their states. This should make you think to what extend are the Indian tribes involved in the current online gambling legislation and other pieces of it in the past.

Documents released in the press clearly show the involvement of some of the Indian tribes with the famous lobbyist Jack Abramoff and even the White House. We will not go into details about these transactions, but in a nutshell, the Agua Caliente Indian Tribe has been "working" pretty close with the above mentioned. Literally millions of dollars exchanged hands, according to the documents, to help the tribe in their gambling business. There is no word on Internet gambling in the papers, but that's not the point.

The point is that we are currently witnessing the biggest ever casino gambling expansion by the Indian tribes in the United States. And there is plenty of proof that some tribes have been greasing the wheels.

And the question is - have they greased the Internet gambling bill? Let's face it, the Internet gambling companies are hurting the land based casino business. Not as much as they would have 10 years ago, when casinos were all about gambling, and now they focus more on entertainment, such as shows, concerts, boxing matches, etc, but still a big chunk of possible land based casino revenue goes offshore. So could the Indian tribes afford to expand their gambling venues to record numbers, as it is in California, for example, if the financial barriers on the Internet gambling were not in place? We think not.

Of course, online gambling cannot put the land based casinos out of business, but if we assume that the figure $8 billion per year spent at the Internet gambling websites by U.S. citizens is correct, and let's say that at least half of that number is now cut-off, and further assume that half would now go the land based gambling houses - that's $2 billion more each year to split among the land based casinos. That's a lot of money, on top on what the casinos already make - Nevada casinos have been showing record numbers, for example, in the past few months.

We don't know if Abramoff was involved with Internet gambling companies. All we know for sure is that he was lobbying against online gambling bills which had included online lotteries to be banned in the U.S. and his job was to not let this happen. Of course, it is expected the publicly traded U.K. online gambling business to lobby against bills like that, but there is no proof that Abramoff was the one working with them. U.S. is probably the only country in the world where the lobbying business is openly exposed and accepted, that is, companies paying lawmakers to make or not make a bill into a law.

Here is a fictional scenario: Lawmakers with a lot of Indian casinos in their states naturally receive campaign contributions and lobbying money from those casinos. Later they pass a bill in benefit of the casinos. Sweet.

As many begin to realize that people gamble online not just for the sake of gambling, but because it's more fun, it's much more convenient, non-smokers do not have to breath smoke, and smokers in some states do not have to be separated in a leprosy-like wards, not to mention that with the current gas prices, driving 70-100 miles to the nearest casino and back is a gamble by itself, it is to be expected that more and more "pro-online gambling" bills would start popping up. And mark my word, those bills will contain a lot of text concerning the Indian tribes' Internet gambling future.

05/24/2007