North Dakota tribes want exclusive rights on online gambling

North Dakota’s five American Indian tribes are seeking exclusive rights to host internet gambling and sports betting in the state, a monopoly worth millions, just a year after legislators turned aside a push by one big national player to allow it in the state.

The tribes are turning to Republican Gov. Doug Burgum to approve the idea under tribal-state agreements known as compacts, the first of which was signed in 1992. The current compacts expire at the end of this year and only Burgum can approve them, said Deb McDaniel, North Dakota’s top gambling regulator.

The tribes argue their casinos have been hurt by the explosion of electronic pull tab machines statewide after they were legalized in 2017, with North Dakotans pouring almost $1.75 billion into the machines in fiscal 2022. Their proposal, obtained by The Associated Press, is still in draft form. A public hearing on a final proposal is set for Oct. 21, McDaniel said.

DraftKings, a big player in the U.S. mobile gambling market, supported legislation and a failed resolution last year to allow sports betting in North Dakota to join about two dozen other states. The company said at the time that sports wagering already is taking place in North Dakota, with an estimated 138,000 people betting more than $355 million in illegal offshore markets annually each year.

The company did not immediately return messages seeking comment on the tribes' proposal. FanDuel, another major player in the mobile gambling market, said it had no comment.

Americans have bet more than $125 billion on sports with legal gambling outlets in the four years since the U.S. Supreme Court’s 2018 decision that lifted a federal ban on sports gambling, clearing the way for all 50 states to offer it.

In the fifth year of legal sports betting, the action is speeding up due to microbetting, the ability to place a bet on an outcome as narrowly targeted as the result of the next pitch in baseball or the next play in football.

It’s unclear what the financial benefits would be to the tribes — or the state — under the proposal, or how it would be regulated and taxed.

Burgum spokesperson Mike Nowatzki said the governor would not comment because negotiations are ongoing.

The proposal comes as Burgum has worked to improve state-tribal relations that have been especially strained since he took office in 2016 in the midst of prolonged protests and hundreds of arrests during the construction of the Dakota Access Pipeline that passes beneath the Missouri River near the Standing Rock Sioux Reservation. The tribe draws its water from the Missouri and fears pollution.

Burgum in 2017 signed legislation that approved the electronic pull tab machines, despite opposition from tribes that warned the Las Vegas-style games would lure gamblers away from the state’s tribal-owned casinos.

Allowing the tribes to host internet gambling and take off-reservation bets would help improve relations and offset losses tribes have suffered from e-tabs, said Cynthia Monteau, a lawyer and executive director of the United Tribes Gaming Association, which consists of leaders from each of the state’s five tribes.

“I think it’s time to start looking at ways on how we can work together and help each other and mend relationships and move forward in a positive way,” she said.

Tribes believe the federal Indian Gaming Regulatory Act gives them authority to conduct online betting statewide, using servers on tribal lands.

A similar compact between Florida and the Seminole Tribe is tied up in federal court after a judge in November found the multibillion-dollar agreement between the state and tribe allowing online betting violated a federal rule that requires a person to be physically on tribal land when wagering. The lawsuit, filed by non-Indian casino owners in Florida, challenged the approval of the agreement by the U.S. Department of the Interior, which oversees tribal gambling operations.

North Dakota Attorney General Drew Wrigley, a Republican, said he has offered Burgum legal advice on the tribes’ proposal but would not disclose what it is. Wrigley said he’s aware of the lawsuit in Florida.

West Fargo Republican Rep. Michael Howe, who now is a candidate for secretary of state, has long been an advocate of expanding online sports gambling operations in the state.

Howe said he does not necessarily oppose the tribes’ proposal. But he said if it fails, he expects legislation to resurface allowing it with or without tribes’ involvement because of its growing popularity.

“I think the average North Dakotan who enjoys sports wagering isn’t concerned where the tax revenue is going,” he said.