Update: Federal court deals blow to potential sports gambling expansion in WA
A federal lawsuit with potentially far-ranging implications was filed Tuesday claiming Washington state officials unlawfully granted Native American casinos a ‘”discriminatory tribal gaming monopoly” over sports betting and other types of gambling such as roulette and craps.
The lawsuit was filed in U.S. District Court in Washington, D.C., by Maverick Gaming LLC, which owns and operates 19 of 44 licensed card rooms in the state. Maverick and owner Eric Persson have unsuccessfully lobbied state lawmakers in recent years to expand sports gambling beyond tribal casinos.
Such gambling was approved only for tribal casinos in March 2020 and went into effect in September 2021 on a case-by-case basis. Maverick, which originated in Nevada but has shifted operations to Kirkland, had pushed bills aimed at expanding such gambling to its card rooms. But those efforts never got to the voting floor, and a similar attempt this legislative session was denied last week before even being granted a hearing.
Washington did enter into amended compacts with 15 tribes running various betting venues, the first of which, Snoqualmie Casino, began a sports-betting book in September, in time for the NFL season. The Stillaguamish and Kalispel tribes soon followed.
Tuesday’s lawsuit asks to invalidate the agreements that led to sports books being offered by those tribes and to effectively put sports gambling within Washington on hold.
Maverick alleges in the lawsuit that U.S. Secretary of the Interior Deb Haaland, Washington Gov. Jay Inslee, Attorney General Bob Ferguson and current and ex officio members of the Washington State Gambling Commission are “irrationally and impermissibly discriminating on the basis of race and ancestry” by wrongfully applying the Indian Gaming Regulatory Act (IGRA) to prevent outside gambling competition to Native American tribes.
Persson said in an interview that he’ll continue his legislative push to attain sports and other gambling in his card rooms. But he said the lawsuit is necessary because he feels the federal IGRA law is being wrongly applied in Washington and creating an unconstitutional monopoly system in which he can’t get a fair shake from lawmakers.
“I think there’s a big gap between the judiciary and the legislative system,” Persson said. “And I think that as that gets clarified and the legislators understand that IGRA is being applied wrongly in the state of Washington, I think they’re going to engage us. And to me, this is just a logical next step.”
The lawsuit states that gambling proceeds for the state’s tribal casinos had surpassed $2.5 billion by 2017 even before sports betting was added.
“Those activities harm Maverick by making it more difficult for Maverick to compete with the Tribes’ much broader gaming offerings in Washington,” the lawsuit states.
The allegations contained in the lawsuit have yet to be rebutted in court and do not necessarily constitute statements of fact.
Worth noting is that one of the lawyers representing Maverick in the lawsuit, Ted Olson, was lead counsel for the state of New Jersey in the successful U.S. Supreme Court challenge that in 2018 overturned a federal law barring sports gambling in all but Las Vegas and a handful of other places. Once that “Christie versus NCAA” case was settled in Olson’s and New Jersey’s favor, the Professional and Amateur Sports Protection Act law from 1992 was nullified, and states were effectively left to chart their own sports-gambling course.
More than two dozen states have legalized some form of sports gambling, including Washington. But the lawsuit filed Tuesday argues that Washington is different from other states that have allowed tribal gaming, because other states also have accommodated nontribal casinos.
“The Indian Gaming Regulatory Act was intended to guarantee parity between tribal and nontribal gaming, but unfortunately Washington State is misusing IGRA to instead create tribal monopolies on certain types of gaming, such as sports betting,” Olson said in a statement. “Contrary to IGRA’s own words, the law is being used to insulate tribes in Washington State from competition that exists in many other states with legal gaming marketplaces. We look forward to resolving this matter so that IGRA’s intent and wording are reflected in Washington State’s regulated gaming marketplace for tribal and commercial businesses.”
Buoying some hopes for the lawsuit was a ruling by the same Washington, D.C., court that has now put the future of sports betting in Florida on hold. The court ruled in November that a tribal compact last May between Florida Gov. Ron DeSantis and the Seminole Tribe was unconstitutional because it violated IGRA. The Washington, D.C., Court of Appeals two weeks ago issued a motion denying the Seminole Tribe’s request to stay the ruling, meaning no sports gambling can take place in Florida for now.
The tribe’s Hard Rock Sportsbook shut down after the ruling was issued.
Maverick is seeking a similar shutdown here.
Washington has some of the nation’s toughest anti-gambling laws, with any form of online wagering considered a Class C felony. The decision to grant even tribes-only sports gambling was seen as a major change. Such betting is limited within casino grounds only, including any mobile wagering. A digital geofence security component restricts mobile sports wagering to tribal casino grounds.
Mobile wagering is the fastest growing sports gambling sector. Persson said he’d also restrict it to his card-room premises just as the law requires Native American casinos to do.
“There’s room for everybody in this business,” he said. “We don’t overlap with tribes.”
The Washington Indian Gaming Association, which promotes the benefits of tribal gambling, has long argued that such betting is vastly different from the commercial realm. It states that revenues from gambling in tribal casinos supports vital community self-government programs in housing, medical care and education.
“Maverick Gaming’s newly announced federal lawsuit is a desperate attempt to overturn federal law, the will of the Washington State legislature, state and federal agency decisions, and the clearly expressed sentiments of the general public in Washington State,” WIGA executive director Rebecca George said in a statement. “It would severely undermine the well regulated and safe system of limited gaming that has been established in Washington State over three decades of carefully negotiated compacts between the State of Washington and Native American tribes.
“Those compacts are fully in keeping with the federal Indian Gaming Regulatory Act, as well as with state law, and have been repeatedly vetted at multiple levels of regulatory oversight. In short, this dangerous and destructive lawsuit is without merit, and were it to somehow be successful it would cause irreparable harm not only to historically marginalized tribal communities but also to the broader public, which opposes a massive expansion of gambling in their neighborhoods and communities.”
It also argues that revenues from tribal casinos flow back into the broader Washington state community. And that it’s one of the state’s largest employers.
But Maverick argues that none of that matters. That it is constitutionally guaranteed the same rights as tribal casinos to offer sports betting and other gambling on its grounds.
“Every day we wake up determined to bring sports betting to the mass population of Washington,” Persson said. “And what we’re doing right now is just the logical next step towards that process.”
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