Tribal revenue hit after state legalized machine gambling in 2017

James MacPherson

Associated Press

BISMARCK, N.D. (AP) — Allowing North Dakota’s five American Indian tribes exclusive rights to host internet gambling and sports betting could effectively end charitable gambling in the state, officials representing charities told Gov. Doug Burgum on Friday.

The tribes want the two-term Republican governor 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.

The tribes argue their casinos, which typically are among their biggest employers and help fund social programs on the reservations, have been hurt by the explosion of the charities’ Las Vegas-style pull tab machines, which were legalized in 2017. North Dakotans poured almost $1.75 billion into the machines in fiscal 2022.

Representatives from North Dakota’s five tribes and officials from the charitable gambling industry argued their cases during a public hearing attended by about 100 people at the state Capitol.

If approved, gamblers throughout North Dakota using mobile devices could place bets that would be funneled through computer servers on tribal land.

Rhonda Counts, an employee at the Sky Dancer Casino on the Turtle Mountain Reservation, said the casino has had to shutter some of its gambling offerings and cut jobs since e-tabs have come online.

“We are suffering,” she told the governor.

She and others said allowing the tribes to host internet gambling on their reservations and take off-reservation bets would help offset losses from e-tabs.

Mike Motschenbacher, executive director of the North Dakota Gaming Alliance, told Burgum that allowing the off-reservation bets “would absolutely devastate our industry.”

He said tribes already have the advantage with gamblers due to their casinos. That statement drew a rare and somewhat angry rebuke from Burgum.

“I just have to say that I don’t think that data would support your assertion that the tribes have the advantage,” Burgum said.

Deb McDaniel, North Dakota’s top gambling regulator, said the amount of revenue going to charities this year from all gambling activity is estimated at $75 million. She said that’s more than double that from just two years ago, thanks to increased e-tab wagering.

State tax revenue from charitable gambling also has more than doubled to about $24 million during that time, data show.

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 said the terms of the compacts are still being negotiated and should be finished next month.

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