NIGC Issues Recommendations to Tribal Operators to Stay Compliant

The tribal regulator of gambling matters, the National Indian Gaming Commission, has issued a list of recommendations on how to set up a sports betting business and comply with all legal prerequisites.

Regulator Advises Tribes on How to Open Sports Betting Operations

The National Indian Gaming Commission (NIGC) has released a new document outlining the potential difficulties that Native American tribes face in relation to rolling out sports betting operations in the united states. These difficulties, the official statement specified, had to do specifically with the Indian Gaming Regulatory Act (IGRA).

NIGC Chair E. Sequoyah Simermeyer spoke about the new regulation and how it could help tribal operators to operate in the changing order after the repeal of the Professional and Amateur Sports Protection Act (PASPA).

The lifting of the federal ban has already prompted tribal operators in places like New York, Mississippi and New Mexico to launch their operator, as per the negotiated tribal compacts with the U.S. Department of the Interior, Simermeyer explained.

However, Simermeyer also explained that to roll out sports betting, all tribes must make sure that the activity is classified as Class III gaming under their own compact.

Explaining the Business of Tribal Gambling in the U.S.

Tribes need to also understand the different ways of setting up their business, including a full control over the sports betting activity – where a tribe would be fully responsible for running business, and leasing its land to allow third-parties to run operations there.

Furthermore, tribes could also team up with third-party data providers while managing their own sportsbook. However, involving any third parties would necessitate further approval from the chair.

More importantly, Simermeyer explained, all tribes should seek and comply with the regulations lest they face stiff penalties. Speaking of payments, all transactions back to any partner must not exceed 30% of the Gross Gaming Regulator (GGR) as per NIGC approved regulation.

However, if specific conditions are negotiated, then a 40% revenue split of the revenue could be enacted, provided that the NIGC chair has given his or her approval.

What Kind of Relation Is It?

To help build a mutually beneficial business, NIGC will focus on several selection criteria in determining the viability of an individual partner. For starters, the Commission would look at the longevity of each partnership, giving a slight preference to long-term contracts.

Secondly, the regulator would also take a look at the amount that will be paid out to any third party, as well how much control said third-party has in running tribal operations. In addition, all tribes must comply with regulatory expectations insofar as compliance with tax laws and customer protection goes.

Due diligence checks are advisory, NIGC specified, to ensure that everyone is enjoying a safe gaming environment. According to Simermeyer, the latest recommendations issued by NIGC consolidate the Commission’s position as a regulator and a source of safe guidance in the sector.