BISMARCK — North Dakota is negotiating new agreements concerning gambling operations of the state’s five tribes and the stakes are high between the tribes and charities that share many of the same goals but compete for gaming revenue.

The state’s tribes, operating under gaming compacts signed in 1992 that will expire at the end of the year, are seeking in negotiations for their new compacts exclusive rights to internet gambling and sports betting originating in the state — which would create a monopoly market worth millions of dollars.

Casinos typically are the largest employers on the reservations and provide important revenue streams that provide for basic human needs, including youth programs and services for the elderly.

But tribal officials and members complain that the advent of electronic pull-tabs for charitable gaming are siphoning off significant revenues that support the tribes. The e-tabs, played on machines that mimic Las Vegas-style games, pulled in almost $1.75 billion in fiscal 2022, according to state figures.

“We are not able to compete with the e-tab machines,” Rhonda Counts, who works at Sky Dancer Casino in Belcourt run by the Turtle Mountain Band of Chippewa, testified on Friday, Oct. 21, at a public hearing taking comments on the draft tribal gaming compacts.

Employment at the Sky Dancer Casino once averaged 450 employees, but since charitable gaming organizations were authorized to offer electronic pull-tabs in 2017, casino activity has plunged, and the casino now employs between 250 and 300.

Gaming tables have been reduced by half, from eight to four, and the casino’s buffet line and poker room have been closed, Counts said.

“We’re not winning with e-tabs,” she said. “That’s our main source of employment on our reservation.”

Counts’ comments about the harmful effects of e-tab competition were echoed by other tribal officials — but countered by leaders of veterans organizations and other charitable organizations that use gaming revenues to support community programs.

Matt Jameson, commander of a VFW post in Bismarck, said charitable gaming, legalized in North Dakota after voters in 1976 approved a constitutional amendment, is vital to the support veterans groups provide.

“Without veterans organizations, charitable gaming wouldn’t be here in North Dakota,” he said. Giving the tribes exclusive rights to internet gambling and sports betting would strike a devastating blow to charitable gaming, he said.

“That’s single-handedly going to destroy all veterans organizations,” Jameson said. “Not just veterans organizations, all fraternal organizations.”

Both charitable and Indian gaming advocates agree that the convenience of internet wagering means that it holds the future of the gambling industry, underscoring the stakes of how that revenue pie is divided in the state.

Mike Motschenbacher, executive director of the North Dakota Gaming Alliance, which represents charitable gambling interests, said giving tribes all of internet gambling rights in the state would be unfair.

“Why would the governor’s office want to create a monopoly?” he asked. “There’s laws against monopolies,” adding that if tribes get exclusive rights to internet gambling in the state it “absolutely decimates the charitable gaming industry.”

Gov. Doug Burgum, who presided over the Friday public hearing, has sole authority to negotiate gaming compacts with the tribes.

Charitable gaming this year will provide an estimated $43 million in state tax revenues, Motschenbacher said. “That number is going to be greatly reduced.”

Tribal gambling casinos can offer roulette wheels, expanded table games and slot machines, games that aren’t available to charitable gaming operations, he said, arguing that the tribes could increase their revenues by more aggressively marketing their games.

“They have the advantages,” Motschenbacher said. “They have nicer, giant casinos.”

Indian gaming representatives countered, however, that the convenience and widespread availability of the e-tabs, which they can’t offer, have made a significant dent in revenues that provide jobs and vital services.

Cynthia Monteau, executive director of the United Tribes Gaming Association, said the unemployment rate on North Dakota reservations soared to 60% to 70% before casinos came after the 1992 compacts which opened up the industry.

“That created the jobs,” she said, and created prosperity that spilled beyond reservation borders, through jobs for non tribal members and business activity. “Many businesses in Bismarck serve Prairie Knights Casino, for instance, and have long-standing relationships.”

Prairie Knights Casino is located south of Mandan on the Standing Rock Reservation.

Gross proceeds from e-tabs since 2018 have exceeded $4 billion, Monteau said. “So it’s pretty hard to say the scales are tipped in favor of the tribes. It’s pretty hard to say that.”

Monteau added: “We came to the table looking at how we can present a win-win situation. That’s what we’re trying to do here.”

Burgum agreed that e-tabs pose significant competition to Indian casinos. In a pause during testimony he said record revenues from e-tabs have coincided with a plunge in tribal gaming revenues.

“I don’t think the data would support your assertion that the tribes have an advantage,” Burgum said following testimony from charitable gambling advocates. “If you want to make statements, I think you should back them up with data.”

Doug Yankton, chairman of Spirit Lake Nation, noting that casinos provide badly needed jobs and support vital programs, said the tribes are similar to charitable organizations in their use of gaming revenues.

“So we’re not much different,” he said. He added later, “We’re not here to take anything away from anybody.”

Sen. Dick Dever, R-Bismarck, said he recalls that buses from Minnesota came to North Dakota after charitable gaming was legalized in 1976, but that changed in a “pendulum swing” after the establishment of reservation casinos in the early 1990s.

“I dislike very much that all of this is about one side versus another,” he said, adding that he wished he had a solution to avoid conflict. Dever said he voted against e-tabs, authorized by lawmakers, and is concerned that expanding gambling will increase gambling addiction.

“I know there’s a growing issue with addiction because of that,” he said. “Addiction is a real problem.”

Burgum also noted concerns about gambling addiction. In the new compacts, the state is seeking $25,000 contributions from each tribe to pay for gambling addiction treatment.

Written testimony on the
draft tribal gaming compacts
will be received through Oct. 31 and can be emailed to Burgum at
[email protected]
, mailed to 600 E. Boulevard Ave, Bismarck, N.D., 58505, or dropped off at the front desk of the governor’s office.