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S. HRG. 112–627

U.S. DEPARTMENT OF JUSTICE OPINION ON

INTERNET GAMING: WHAT’S AT STAKE FOR

TRIBES?

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

FEBRUARY 9, 2012

Printed for the use of the Committee on Indian Affairs

(

(II)

COMMITTEE ON INDIAN AFFAIRS 

DANIEL K. AKAKA, Hawaii, Chairman 

JOHN BARRASSO, Wyoming, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

JON TESTER, Montana 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

MIKE CRAPO, Idaho 

MIKE JOHANNS, Nebraska 

LORETTA A. TUELL, Majority Staff Director and Chief Counsel 

DAVID A. MULLON JR., Minority Staff Director and Chief Counsel 

(III)

C O N T E N T S 

Page 

Hearing held on February 9, 2012 ......................................................................... 1

Statement of Senator Akaka ................................................................................... 1 

Statement of Senator Barrasso ............................................................................... 2

Statement of Senator Udall .................................................................................... 2

WITNESSES

Feldman, Glenn M., Mariscal, Weeks, McIntyre & Friedlander, P.A. ................ 46

Prepared statement .......................................................................................... 47

Fleming, Patrick W., Litigation Support Director, Poker Players Alliance ........ 39

Prepared statement .......................................................................................... 40

Porter, Hon. Robert Odawi, President, Seneca Nation of Indians ....................... 3

Prepared statement .......................................................................................... 5

Rose, I. Nelson, Distinguished Senior Professor, Whittier Law School .............. 21

Prepared statement .......................................................................................... 23

Skibine, Alex T., Professor, S.J. Quinney College of Law, University of Utah .. 28

Prepared statement .......................................................................................... 29

Washburn, Kevin K., Dean, University of New Mexico School of Law ............... 12

Prepared statement .......................................................................................... 14

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U.S. DEPARTMENT OF JUSTICE OPINION ON 

INTERNET GAMING: WHAT’S AT STAKE FOR 

TRIBES? 

THURSDAY, FEBRUARY 9, 2012

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:15 p.m. in room 

628, Dirksen Senate Office Building, Hon. Daniel K. Akaka,

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. DANIEL K. AKAKA,

U.S. SENATOR FROM HAWAII 

The CHAIRMAN. The Committee will come to order. 

Aloha. Today, the Committee will hold an oversight hearing on 

the Department of Justice opinion on Internet gaming and examine 

what impact this decision may have on Tribes. 

This issue is of great importance to Tribes. Indian gaming is currently the only form of federally-authorized and regulated gaming 

in the United States. In total, Tribal gaming revenue makes up 40 

percent of the total casino gaming market in the United States. 

Gaming has been the single most effective form of economic development for Indian Country. That is why, when court administrative or legislative decisions are made, Tribal concerns and priorities 

must be considered as part of the dialogue. 

Tribal gaming revenue provides for the education, housing, infrastructure and health needs of our Tribal members. In addition, 

Tribal gaming provides economic opportunities and jobs in the surrounding communities. 

I would like to call your attention to the charts in the room 

which illustrate that Tribal gaming occupies a unique status in the 

framework of Federal law. As you can see, Tribal gaming represents an overwhelming percentage of total U.S. casino revenues. 

The Committee held a hearing on Internet gaming in November. 

Since that time, the Department of Justice issued an opinion on 

the scope of the Wire Act. That decision raises many questions for 

Federal, State and Tribal governments. Today we will hear from 

our witnesses on the potential impact that decision could have on 

the current framework of Tribal gaming. 

In this session, Congress may consider proposals that would expand Federal authorization and regulation of gaming activities in 

this Country. The Committee will provide a legislative forum where 

2

everyone, especially Tribal governments, are able to provide their 

perspective on an issue that is so vital to Tribal self-sufficiency. We 

also want to continue to hear from other affected stakeholders. 

The record for this hearing will remain open for two weeks from 

today. So I encourage all interested parties to submit written testimony. 

I would like to now ask our Vice Chairman for his opening statement. 

STATEMENT OF HON. JOHN BARRASSO,

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. Thank you very much, Mr. Chairman. I do 

appreciate your holding this hearing today. 

We all recall that last November the Committee held an oversight hearing on Internet gaming in Indian Country. About a 

month later, the Department of Justice issued an opinion regarding 

Internet gaming. So today we are going to hear from the witnesses 

what that opinion means for the Indian Tribes. 

I realize that this is a subject of great importance to Tribes 

across the Country, so I just want to thank you, Mr. Chairman, for 

your leadership in examining this matter. I appreciate and thank 

the witnesses who have traveled great distances to be here to testify today. 

So thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator. 

Senator Udall? 

STATEMENT OF HON. TOM UDALL,

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Thank you very much, Chairman Akaka. I really 

appreciate being here with you today, and I want to thank you for 

holding this important hearing on Internet gaming and the Department of Justice’s recent opinion. 

And thank you for remaining engaged in this issue. It is very appropriate that the Indian Affairs Committee take up the issue of 

Internet gaming. This is an issue that may have significant impact 

on Indian Country. So the Committee and Tribal leaders need to 

be an active part of the debate over any possible legislation. 

Beyond this hearing, it is my hope that my colleagues in the 

Congress who are proposing related legislation will engage Tribes 

in the development of any gaming proposals. And while I am at it, 

Mr. Chairman, I would also like to welcome Mr. Kevin Washburn, 

who is the Dean of the University of New Mexico Law School. Mr. 

Washburn is a citizen of the Chickasaw Nation of Oklahoma. He 

is the first Native American to serve as a dean, as the Dean of the 

UNM Law School. He has a strong background in Indian law, gaming and criminal law. And I am sure we will learn a lot from him 

today. 

Mr. Washburn is also a former Federal prosecutor in New Mexico 

and a trial attorney with the DOJ. He has served as the General 

Counsel of the National Indian Gaming Commission. I look forward 

to Mr. Porter’s testimony and Mr. Washburn’s and the other panelists. I want to thank Mr. Washburn very much for participating 

today and making the trip here. I also want to applaud the NaVerDate 0ct 09 2002 10:45 Nov 28, 2012 Jkt 075534 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\DOCS\75534.TXT JACK
3

tional Indian Gaming Association and the gaming Tribes for getting out on front of this issue. This is the most important thing you 

could do. 

Thank you, Mr. Chairman, and with that, I look forward to hearing the witnesses. 

The CHAIRMAN. Thank you very much, Senator. 

Now I would like to invite our first panel. Let me welcome you, 

the Honorable Robert Odawi Porter, President of the Seneca Nation of Indians. President Porter, will you please proceed with your 

remarks? 

STATEMENT OF HON. ROBERT ODAWI PORTER, PRESIDENT, 

SENECA NATION OF INDIANS 

Mr. PORTER. Nya-weh Ske-no. Mr. Chairman, Mr. Vice Chairman, Senator Udall, thank you for having me today. I am thankful 

that you are well. 

I am honored today to testify on this subject before this wellcredentialed panel of law professors and deans and scholars. They 

do what I used to do for many years before I became the president 

of my nation. 

I have read their testimony and they make very good points. But 

as a Tribal leader I must say that there are two questions that 

must frame our discussion as we move forward. First, will the decisions of the Congress in Internet gaming support or destroy the Indian gaming jobs held by our Tribal citizens and our neighbors? 

And two, will your decisions support or erode the gaming revenue 

that Tribal nations use to fund essential governmental programs 

and services? 

In my written testimony, I have set out a number of reasons why 

it is in the political interest of every member of Congress, including 

Senators Schumer and Gillibrand from New York, and every Governor, including New York Governor Cuomo, to join with the Seneca Nation and other Indian Tribes to protect the existing jobs that 

exist at our bricks and mortar Tribal government gaming facilities, 

and to preserve our right, if new Internet gaming is authorized, to 

participate as equal partners. 

In recent years, big gaming and State regulatory interests in Nevada and New Jersey have pushed for Federal Internet gaming legislation that would give them monopolistic control of Internet gambling operations throughout the United States. This brazen power 

grab is based on a lie, a fiction that big Nevada and New Jersey 

interests alone are sophisticated enough and strong enough to operate Indian gaming businesses. They are determined to shove Indian gaming away from the table or at best, to deal Indian gaming 

a short hand. 

But the fact of the matter is that the Seneca Nation and dozens 

of other Indian nations are at least as sophisticated, if not more so, 

in terms of management, security, oversight and regulation than 

the biggest and best operators in Atlantic City and in Las Vegas. 

Tribal job creation and economic diversification in our regions 

should be respected, protected and cultivated, not attacked, undermined or assaulted. 

The Seneca Nation, like dozens of other Indian Tribes, is one of 

the largest employers in our geographic region. Collectively, Tribal 

4

government gaming injects billions of dollars into the regional 

economies that surround Indian Country. Tens of thousands of 

American workers, both Indians and non-Indians who are our 

neighbors, depend on the health and vitality of Tribal government 

gaming operations for their jobs. These jobs exist directly or indirectly, such as through the contractors and vendors who rely upon 

our gaming enterprises for their livelihoods. These family breadwinners have invested their lives in Indian gaming as chefs, as slot 

machine technicians, as construction workers and suppliers and so 

on. In an unbelievable and ironic twist of fate, it could literally be 

said that many Indian nations and Tribes carry the responsibility 

of feeding and clothing our non-Indian neighbors along with our 

own citizens. 

The interests of the Seneca Nation and our neighbors in New 

York are aligned and congruent when it comes to the threat of 

Internet gaming and lottery operations. Our common interests are 

to protect local jobs and local commerce that will create more local 

jobs. Internet gaming, if not tied to local facilities and local operations that trade in ancillary local entertainment and local commerce, does not create local jobs and local economic activity within 

a State. Internet gaming, if it is not controlled locally, and connected to local commerce, will bleed dry the regions surrounding 

Indian Country and cause great injury to all of us who depend 

upon our existing businesses. 

My request today is simple. Send your colleagues a message that 

you will not tolerate any new legal authority that will result in job 

losses in Indian Country or that shoves aside large and successful 

Tribal gaming operations from any new Internet gaming table. Indian nations not only demand a seat at the table, we insist that 

we already own our own table and that we should not have it stolen from us, as has too often been the case in the past. 

American history is littered with predatory Federal Indian policies and illegal and immoral confiscations of Native property and 

wealth. Whenever non-Indians have discovered that the Indians 

have possessed something of value, the non-Indians have tried to 

grab it for themselves and too often succeeded. Recently, Indian 

gaming slipped through the cracks of this sordid history and for the 

last 30 years, a rare economic revitalization has occurred for some 

Indian nations located in population centers in States that did not 

authorize gambling otherwise. 

But now these cash-starved States are embracing casino gaming 

with great enthusiasm. These predatory actions are eroding Tribal 

exclusivity interfering with existing compacts and threatening the 

jobs that Indian gaming has created. 

I will leave it to others on the panel to pick apart the Wire Act. 

And if I could, Mr. Chairman, I realize my time has expired. I 

would like to take a moment to conclude. 

If the New York lottery, for example, offers electronic gaming, 

without the participation of the Seneca Nation and other Tribal casinos, it will violate our existing compact and undermine our bricks 

and mortar business. We cannot stand for the disruption of these 

compacts either in New York or anywhere in Indian Country. 

There is much that we can do together, there is much that we can 

do collaboratively that will benefit all. 

5

In conclusion, we have serious concerns that Internet gaming 

will undermine our efforts to lift ourselves up as a people after centuries of economic deprivation. This will imperil our jobs and revenues that we have created for ourselves and for our neighbors. 

Should this Congress authorize some form of Internet gaming, the 

Seneca Nation insists that it be done in a way that protects our 

inherent and treaty-recognized sovereign right to engage in Internet gaming activity on terms that reflect the economic interests of 

ourselves and that of our neighbors in western New York. 

Nya-weh, and I would be glad to take any questions. 

[The prepared statement of Mr. Porter follows:]

PREPARED STATEMENT OF HON. ROBERT ODAWI PORTER, PRESIDENT, SENECA NATION

OF INDIANS

Introduction 

Nya-weh Ske-no. Mr. Chairman and members of the Committee, I am thankful 

that you are well and I am pleased to appear today to discuss the testimony I am 

submitting for the record on behalf of the Seneca Nation of Indians. 

My purpose in testifying is this—I believe it is in the interest of each member 

of this Committee, as well as the other senators representing Indian Country, like 

our Senator Schumer and Senator Gillibrand, to join with the Seneca Nation and 

with other Indian tribes in protecting the existing jobs at tribal brick-and-mortar 

gaming facilities and in preserving the right of Indian nations to meaningfully and 

substantially participate, from the outset, in any new Internet gaming authorized 

under federal or state law. 

Cultivating job creation within Indian country and ensuring meaningful, substantial, early and fair participation by Indian nations in Internet gaming, be it poker, 

lottery, or other games, is in the mutual self-interest of Indian nations, of our neighbors and of the states whose lands adjoins ours. It is also sound federal Indian policy. 

The Seneca Nation, like dozens of other Indian tribes, is one of the largest employers and economic enterprises in our region. The ancillary impact of tribal gaming operations on regional economies surrounding Indian tribes is in the millions if 

not billions of dollars each year. Tens of thousands of American workers—our neighbors—depend on the health and vitality of tribal gaming operations for their jobs, 

either directly with Indian nations as their employers or as vendors or nearby enterprises who rely on our gaming casino activity for their upstream or downstream 

business activity. 

We ask that you join with Indian tribes to protect against any move by powerful 

gaming interests who will try to force Nevada-only or New Jersey-only control over 

Internet gaming. This is not idle speculation. Last year, some senators released 

draft legislation which would have shut out Indian tribes from any competitive involvement in Internet gaming, as if we are inferior and irrelevant gaming operations who are incapable of meeting or exceeding Nevada or New Jersey regulatory 

standards. The approach embodied in the draft bill was certainly short-sighted, as 

it would have threatened existing jobs. 

The governors of New York, and Arizona, California, Florida, Connecticut, Michigan, Minnesota, Oklahoma, Oregon, Washington, Wisconsin, all know full well how 

robust and capable and sophisticated Indian gaming is today. This Committee certainly knows it. And I am confident this Committee will not tolerate anyone in the 

United States Senate giving serious consideration to a power grab by Nevada and 

New Jersey gaming interests that would result in job losses in Indian country and 

would shove aside our large and successful tribal gaming operations from the Internet gaming table. Far too much is at stake, in terms of the interests of tribal nations, our employees, our business partners and our neighbors. And while history 

does sometimes repeat itself, we know one of the missions of this Committee and 

of you, Mr. Chairman, is to avoid repeating the errors of previously misguided federal Indian policy. More on that later. But first, I wish to describe my Nation, where 

we’ve been and where we are going. 

Background on the Seneca Nation of Indians 

Our Nation was one of America’s earliest allies, historically aligned with the other 

members of the historic Haudenosaunee (Six Nations Iroquois) Confederacy and living in peace with the American people since the signing of the Canandaigua Treaty 

6

nearly 217 years ago on November 11, 1794, 7 Stat. 44. In that Treaty, the United 

States promised that it would recognize the Seneca Nation as a sovereign nation 

and that the title of our lands would remain forever secure and that we would retain the ‘‘free use and enjoyment’’ of our lands. This promise has served as the basis 

for a level of freedom possessed by the Seneca people that we believe is unmatched 

by other indigenous peoples in the United States. 

Because of this treaty-protected freedom, our Nation has been able to achieve success in recent years as we continue to strive towards recovering from nearly 200 

years of economic deprivation inflicted upon us by the United States due to devastating losses of our lands and resources. Both our Seneca Nation government and 

individual Seneca citizens have benefited from the opportunity to expanding into 

economic trade with non-Indians during the last 40 years, focusing primarily on the 

tobacco and gaming businesses. We have fought hard for our recent economic success—just as we have fought hard to protect our lands—but the fact remains that 

we are under constant assault from hostile forces such as the State of New York 

and private sector predators who seek to deprive us of economic prosperity and return us to the poverty of a prior era. This Internet gaming and lottery issue is merely the latest in a long line of battlefronts. Like most threats, it also offers great opportunities. 

The Seneca Nation of Indians Enforces Its Own Comprehensive Laws

Within Its Own Territory 

The Seneca Nation has a rich history of actively regulating and enforcing economic activity within our Territories. For example, our Council enacted a comprehensive Import-Export Law in 2006 to regulate sales of tobacco and other products from its Territories. The Nation’s Import-Export Commission regulates all aspects of tobacco sales and distribution on our Territories. As a result of the enactment and enforcement of our own tribal law, the Nation has gained regulatory control of tobacco and other sales activities on its Territories. The Nation’s aggressive 

implementation of its Import-Export law has greatly enhanced its capacity to enforce the law on our Territories. 

We also have comprehensive ordinances governing class II and class III gaming 

activities at our bingo halls and casinos on our Territories. Under these tribal laws, 

the Nation’s gaming regulatory body, the Seneca Gaming Authority, oversees and 

ensures the integrity of our highly successful gaming enterprises. And the Seneca 

Gaming Authority works closely with its federal counterpart, the National Indian 

Gaming Commission, in the regulation of our class II gaming and with both the National Indian Gaming Commission and the New York State Racing and Wagering 

Board in the regulation of our class III casino gaming activity. 

I raise these examples to remind everyone that Indian tribes, like the Seneca Nation, are governments. We govern the people and activity within our own Territories. 

This is reflected in the U.S. Constitution that governs how the United States government is supposed to deal with us—nation to nation. How America has actually 

dealt with Indian nations, however, is twisted into unconstitutional shapes. 

Seneca Nation History Is Replete With Irony 

If you look at American history from the perspective of a Seneca Nation citizen—

or of any American Indian for that matter—it is filled with many cruel ironies. 

American economic development has chronically and habitually by-passed Indian 

Country or has extracted value and then abandoned Indian Country like a mere colony. 

Native American history is one of nearly complete loss of what we once had. We 

have lost most of our lands and nearly everything of value and significance associated with them. We have lost most of our natural resources, such as the beaver belt 

and the buffalo herds. We have lost most of our stockpiles of gold, uranium, oil, gas, 

salt, and gravel. We have had the use of most of our remaining lands taken for railroads, highways, non-Indian homes and reservoirs for hydroelectric dams. In the 

late 19th Century, the United States forced upon the Seneca Nation long-term 

leases for nominal payment to accommodate the establishment of the City of 

Salamanca on the Allegany Territory and to legitimize the leases obtained by railroad corporations through unsavory means. And just 45 years ago, the United 

States again broke the Canandaigua Treaty and took 10,000 acres of our Allegany 

Territory for the Kinzua Dam and Allegheny Reservoir so that a license could be 

granted to a private mega-corporation to make millions of dollars from the sacrifice 

of our lands and the burning of our homes. 

Even when Indian nations were paid for our property, it was often at confiscatory 

prices under coercive agreements pushed down our throats for only pennies on the 

dollar of the actual value taken by outsiders. 

7

Whenever I read the founders of American capitalism, and the great treatises defending the fundamental sanctity of property rights in American law, I cannot help 

but recall how Indian property is the glaring exception to the rule of property law. 

Any unvarnished view of American history will reveal that, when it comes to the 

property of indigenous people, federal and state law has subverted the natural order 

of property ownership. All too often the United States has appropriated, or has allowed states and others to steal, like common thieves, valuable property held by Native Americans. This, whether anyone likes it or not, is the common strain of American history towards the aboriginal occupants of this land. And, just a few years ago, 

the federal courts legitimized theft of Indian property by adopting the theory that 

if the stealing happened long enough ago, it’s okay. We ask that you not tolerate 

any further repetition of this history. 

Discovery Has Led to Confiscation 

The storyline of American Indian history has been the same, time after time. 

When non-Indians ‘‘discover’’ that the Indians possess something of value to the 

non-Indians... then the non-Indians grab it for themselves. No money can adequately compensate Indian Country for these takings, and precious little money has 

ever been offered. 

Recently, Indian gaming slipped through the cracks of this history and for the last 

30 years a thousand flowers bloomed for Indian Nations with territories near large 

population centers in states where the law frowned upon gambling. Because gambling was disfavored by state law but craved by state citizens, neighboring Indian 

gaming markets thrived. The recognition by the U.S. Supreme Court of tribal sovereignty in the pivotal Cabazon case, although constrained soon thereafter by the 

Indian Gaming Regulatory Act, resulted in a temporary but tangible advantage for 

some tribal economies. 

But now big casino industry and cash-starved states are embracing casino gaming 

in nearly every state market. This is eroding tribal exclusivity and thus, tribal gaming market share, and threatening the jobs that Indian gaming has created directly 

for our employees and indirectly for vendors and our neighbors whose businesses 

our employees and customers frequent. Once again, Indians have been discovered 

to possess something the non-Indian economic interests want for themselves. As inevitable as the sun’s rising in the East, discovery of tribal government gaming is 

leading to its confiscation. Once again, Indian nations possess something our neighbors covet. 

In New York, as in some other states, the governor has decided to try to grab 

gaming exclusivity away from the Indian tribes, tearing up the agreement his predecessors struck with us. Governor Cuomo can expect a fight this time. And we have 

lots of allies this time who are not simply going to let Albany pull the rug out from 

under us and them. 

The Seneca Nation is one of the largest employers within the borders of western 

New York State. If the governor kills our gaming enterprises by breaking the exclusivity agreement we negotiated with the State of New York, thousands of people will 

be put out of work and the economy of our entire region will be disrupted. 

With the request it made to the U.S. Department of Justice last year, it appears 

that the New York Lottery is seeking to offer an electronic lottery gambling to customers over the Internet within New York. If—instead of working with the Seneca 

Nation and other existing tribal casinos within the borders of New York—the New 

York Lottery seeks to directly compete with our brick-and-mortar casinos by putting 

the equivalent of slot machines in every living room in New York—we will make 

every effort to see that its effort is a commercial failure. 

There is much that we can do together—New York State and the Indian nations 

with whom New York shares borders—that will be in our mutual self-interest and 

help us together, as neighbors, withstand the competitive influences of New Jersey 

and other surrounding states. But if New York will not join with us, we are all the 

weaker. The tobacco trade is a fresh example of how not to respond; of how shortsighted New York interests combined with (Big Tobacco) interests outside New York 

to short-change the interests of New York taxpayers. 

Can Indian Diversification Outpace the Tidal Waves of Non-Indian

Confiscation? 

Until last year, the Seneca Nation had a robust and diversified trading economy 

based in large part on the sale of tobacco and fuel products to non-Indians. Unlike 

many other places in Indian Country, Seneca Nation Territories had a decades-old, 

private sector economy comprised of competitively-driven Seneca entrepreneurs. Our 

Seneca entrepreneurs traded products for years in bricks and mortar, over the 

counter transactions and, when the World Wide Web offered additional avenues for 

8

trade and commerce, they expanded their market reach into the Internet tobacco 

trade and they created many, many jobs for Indians and non-Indians alike. 

Like with gaming, our Indian Internet trade in tobacco slipped through the cracks 

of history and for a time it blossomed, and the entire Western New York region was 

the beneficiary of the successes of our Seneca entrepreneurs. Because tobacco use 

was disfavored by state law but craved by state citizens, the Indian Internet tobacco 

trade thrived. But when jealous Big Tobacco industry interests combined with the 

avaricious appetites of state taxing authorities, their envy colluded to persuade the 

U.S. Congress that they alone, not Indian Nations, and their terms, not ours, should 

govern trade in tobacco products. 

Two years ago, the U.S. Senate and the U.S. House of Representatives chose to 

over-ride strenuous objections from the Seneca Nation and enact the Prevent All 

Cigarette Trafficking Act of 2010, the so-called PACT Act. The PACT Act singlehandedly destroyed our Internet tobacco trade. It levied prohibitively costly fines 

and penalties on anyone connected with the common carriers and the U.S. Postal 

Service from moving our trade in tobacco products. It brought Seneca Nation’s 

booming e-commerce tobacco trade to a grinding halt and threw hundreds of families out of work. 

Is Internet Gaming the New American Frontier? 

Some Senators, as well as many other observers of the American economic future, 

appear to believe that Internet gaming is the new American economic ‘‘frontier’’. If 

it is, what warning signals can we learn for Indian Country and our allies on this 

Committee and in Congress and the Administration? What lessons can we draw 

from the history of how the United States, and the various states, and American 

economic interests, have shaped the American frontier, from timber and gold and 

water to gaming 25 years ago and to the Indian tobacco trade two years ago? 

One lesson is unavoidable. Isn’t it time the property rights of Indian Nations are 

respected and protected? If not now, when? Isn’t it time non-Indians respect the inherent and treaty-recognized rights of Indian Nations to control what happens on 

and from our own land? That’s exactly what the Treaty of Canandaigua promised 

the Seneca Nation and the Seneca people. 

I and many tribal leaders have no patience for the empty lip-service being paid 

in these hallways to a pseudo concern for Indian country jobs and the diversification 

of Native economies. 

If that concern is real, then honor Indian treaties. Respect tribal sovereignty. Let 

Indian nations trade as sovereigns. Stop undermining Indian casino gaming with 

Internet gaming proposals, or Internet gaming proposals that preclude Indian nations from participating on fair terms. 

Internet Gaming—A 21st Century Gold Rush 

In recent years the Big Gaming interests, not unlike Big Tobacco, have allied 

themselves with state regulatory interests in Nevada and New Jersey and pushed 

for federal Internet gaming legislation that would bestow upon them a monopolistic 

control of Internet gambling operations. That brazen power grab is premised on the 

fiction that the big Nevada and New Jersey interests are alone sophisticated enough 

to operate Internet gaming in the first wave. 

Like land homesteaders and gold stake claimers before them, these Nevada and 

New Jersey moguls see Indian gaming as a competitive threat and are determined 

to shove Indian gaming away from the table or, at best, deal Indian gaming a short 

hand. Make no mistake about it. Internet gaming in the sole hands of these Big 

Gaming moguls absolutely threatens the jobs that Indian country has created at its 

brick-and-mortar gaming facilities through years of innovation and investment in 

Indian country. And it further threatens to undermine the regional economies that 

Indian gaming has created. 

Moreover, the Seneca Nation and dozens of other tribal gaming operations are as 

or more sophisticated in terms of management, security, oversight and regulation 

than the biggest and best operators in Atlantic City and Las Vegas. In addition, 

until this Congress and this Administration recently shut it down with enactment 

of the PACT Act, the Seneca Nation regulated one of the most robust Internet commerce operations in America—the tobacco trade. It is an affront to our dignity for 

the Congress to give any credence to the insulting notion that the Seneca Nation 

is somehow ‘‘not ready’’ or inexperienced or otherwise ill-equipped to conduct Internet gaming from Nation Territory, according to Nation laws and regulations, anywhere the Internet markets take our game and our trade. 

Our treaty rights to conduct commerce—from our land, on our own terms, and 

without restraint by any outside power—must be respected and honored. That must 

apply to both over-the-counter trade and Internet commerce like Internet gaming. 

9

And our job creation and economic diversification in our regions should be both respected and cultivated, not attacked. 

This Congress and this Administration bowed to Big Tobacco and Big State interests last year with the PACT Act and devastated the Seneca economy. I urge this 

Committee, to find its true identity—as a strong ally of tribal sovereignty and as 

a stalwart defender of Indian treaties—and fight to the death to ensure that no 

Internet gaming legislation is enacted unless it guarantees to Indian Nations the 

right to set all terms and reap all benefits of all e-commerce that originates on Indian Country. 

Internet gaming developments are the most recent, modern-day threat to tribal 

sovereignty. I must ask this Committee—will Congress roll over once again and, 

PACT-like, squash tribal sovereignty and tribal ingenuity by acquiescing to the powerful Internet gaming interests in Nevada and New Jersey and the cash-envious 

state and federal treasuries? 

I don’t think you will. Your hearing today heartens me. It is exposing the mutual 

interests that best define what Indian tribes and state governments can do together. 

Our common interests are to protect local jobs and local commerce that creates 

more local jobs. Internet gaming, if not tied to local facilities and local operations 

that trade in ancillary local entertainment and local commerce, does not create local

jobs and local economic activity within a state. Internet gaming, if it is not controlled locally and connected to local commerce, will bleed our region dry. Internet 

gaming, and the new technologies that make it possible, actually is the occasion for 

combining the local interests of states like New York and nations like Seneca and 

the interests we hold in common as neighbors. The interests of the Seneca Nation 

and our neighbors in New York are aligned and congruent when it comes to Internet 

gaming and lottery operations. We are sending this message here today because we 

are convinced that our New York senators will sooner or later recognize, like Speaker Tip O’Neill is said to have said years ago, that all politics is local. 

Conclusion 

The Seneca Nation asks that this Committee to avoid taking action that does anything other than cultivating the job creation and economic diversification that Indian gaming has created in our respective regions. We have serious concerns that 

Internet gaming will undermine our efforts to-date to lift ourselves up from centuries of economic depression and will threaten many of the existing jobs that our 

Indian gaming enterprises have created. 

Should this Committee believe that Internet gaming is nevertheless the right answer for Indian country and the American people, the Seneca Nation asks that this 

Committee ensure that the U.S. Congress, in conformity with its responsibility 

under the U.S. Constitution, honor our treaties and protect our inherent, sovereign 

right to engage in Internet gaming activity on terms that reflect the economic interests of ourselves and that of our neighbors in New York. 

We believe it is in the interest of Senators to join with the Seneca Nation and 

with other Indian tribes in protecting the right of Indian nations to meaningfully 

and substantially participate, from the outset, in any new Internet gaming authorized under federal or state law. 

Specifically, and urgently, we ask that you join with Indian tribes to protect 

against any move by powerful gaming interests who are trying to force Nevada-only 

or New Jersey-only control over Internet gaming. 

Thank you for this opportunity to provide testimony and we ask that it be made 

part of the record of this hearing. 

Nya-weh.

The CHAIRMAN. Thank you very much, Mr. President. 

In your testimony, you state that it is mutually beneficial for the 

Tribe and the State to ensure that local jobs and local commerce 

are protected. My question to you is, what impacts do you think the 

DOJ opinion could have on New York State generally and the Seneca Nation specifically? 

Mr. PORTER. Mr. Chairman, our nation is fortunate enough to 

employ almost 4,000 Natives and non-Natives in our gaming business in New York. We are the fifth largest employer. If Internet 

gaming is allowed to commence and proliferate, I strongly believe 

that we will lose jobs and economic resources from our businesses 

10

in an area of the United States that is very under-served economically. 

So to us, it portends a great threat that we have to be very cautious about and be very concerned that the Congress would injure 

our existing business. 

The CHAIRMAN. Do you think other commercial gaming entities 

have a level of expertise in the area of Internet gaming different 

from Indian Tribes that should allow them to have first access into 

this market? 

Mr. PORTER. Mr. Chairman, I do not believe that non-Indian 

gaming businesses have any technological or business savvy beyond what we have. I believe that our businesses are more regulated than other businesses. I believe our technical expertise is superior. And I am absolutely confident that we can provide high 

quality services, we can provide opportunity in this area no differently than we have with bricks and mortar businesses. 

The CHAIRMAN. Thank you. 

Let me now call on our Vice Chairman for his questions. 

Senator BARRASSO. Thank you, Mr. Chairman. 

Thank you, Mr. Porter, I appreciate your being here. As you said, 

you have read the testimony of the next group. I was just noting 

that in the next panel Mr. Rose is going to talk about in the wake 

of the Department of Justice opinion that the States are going to 

be moving, or they will move quickly in light of this opinion, to legalize and establish different regulatory approaches or schemes for 

Internet gaming. 

So what do you specifically feel will be the biggest challenges for 

the Tribes if Internet gaming is then left to State regulation? 

Mr. PORTER. Mr. Vice Chairman, I believe the significant problem is that many of our business agreement are tied to a geographic exclusivity. They are obviously not tied in many cases to 

our territory, per se, but are tied to a region of the State, for example. 

So that is what we have negotiated for. We have paid for that, 

we have invested, in our case, nearly a billion dollars on physical 

infrastructure tied to that geographic area. Opening up Internet 

gaming beyond those geographic borders, and allowing, whether in 

the case of the particular Wire Act opinion, the New York State lottery, to prey upon and seize business opportunity from patrons in 

our exclusivity zone I think is the greatest threat and presents the 

greatest challenge for the Congress in marshaling a solution to protecting our geographic based businesses. I think it is a very difficult problem, but it is something that needs to be addressed. 

Senator BARRASSO. And it is not just in your home State, but you 

are looking at it in each individual State? 

Mr. PORTER. Exactly. 

Senator BARRASSO. Because of the geographic component, and 

then the bricks and mortar location and the impact on the people 

who are there working. Thank you. Do you want to add to that? 

Mr. PORTER. No, that is fine. 

Senator BARRASSO. Okay, thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Barrasso. 

Senator Udall? 

Senator UDALL. Thank you, Chairman Akaka. 

11

The Seneca Nation’s history and success with Internet commerce 

is very impressive. And your experience with how Internet commerce can aid local development and local economies I think is an 

important piece of the discussion. 

What do you see as the future of Tribal gaming and should it involve Internet gaming? Could you explain a little bit more when 

you talk about the exclusivity zone and the geographic components 

to this? 

Mr. PORTER. Certainly, Senator. I think that in terms of just capability, as I mentioned before, our ability to participate in an 

Internet economy exists. But it can’t do so in a way that undermines our existing businesses. In our case, the compact that we 

have entered into with New York State defines a 16-county geographic region in western New York that is our exclusive zone for 

the offering of slot machines. And we pay for that right, 25 percent 

off the top is otherwise due to the State and local government associated with that right. 

Everything associated with our business model that we have 

under our 21-year compact is tied to that geographic region. The 

Congress, in very many ways, if we are to just simply open up this 

opportunity of Internet gambling without regard to that existing 

platform, which is common in Indian Country, I believe would 

produce serious injury and impairment to our contractual relationships with not just the State, but with our creditors, with our business partners and would inflict a tremendous degree of economic 

injury to us that could significantly destabilize, if not destroy, our 

businesses. 

So finding that solution, if the Internet gaming legislation moves 

forward, is a critical one to assure that in many ways, Indian 

Country is held harmless from the consequences. 

Senator UDALL. Do you believe the ongoing Internet poker that 

is conducted through international sites has already been a deterrent or a benefit to gaming Tribes, and how specifically has it impacted the Seneca Tribe? 

Mr. PORTER. In our particular instance, I am not sure that we 

can say that the Internet poker has induced tremendous harm. Our 

businesses remain strong and because of the integrity of the compact and the geographic exclusivity, we are able to create and have 

created resort destinations that bring in patrons from Canada and 

other States. 

But obviously, it has a certainly slippery slope element to it, that 

if it simply opens up in all forms of gaming, that is where we have 

to be concerned about how it will affect our business. 

Senator UDALL. Thank you, President Porter. Thank you, Chairman Akaka. 

The CHAIRMAN. Thank you very much, Senator Udall. 

President Porter, currently Tribal gaming is the only federallyauthorized and regulated gaming in the United States. If Federal 

legislation is enacted, some of that exclusivity would be threatened. 

As we have seen in IGRA, it is important to ensure that Federal 

and Tribal interests are balanced in any legislation. In your opinion, what would Tribes need to see in the Federal legislation to ensure that this exclusive right is maintained? 

12

Mr. PORTER. Mr. Chairman, I have long held troubled feelings 

about this notion that should be balancing the interests of Indian 

sovereignty and our treaty rights. We paid for the freedoms of our 

land and our sovereignty 200 years ago. Unfortunately, in our view, 

in my view, the Indian Gaming Regulatory Act reflects once again 

a restriction and a curb on our rights as sovereign Indian nations. 

As the Congress moves forward to deal with this issue of Indian 

gaming, I would ask that we no longer have to pay again for the 

freedoms that we have already paid for. This gaming business has 

done very well for us in many places in Indian Country, and it has 

provided resources to help our people and provide services that 

never before existed. 

So the simple ask would be to hold us harmless, ensure that we 

are not paying again for something that we have already paid for 

more than once. 

The CHAIRMAN. Thank you very much, Mr. Porter. 

Are there any further questions of Mr. Porter? 

Well, I want to thank you very much for your responses. Without 

question, it will be helpful to us as we move forward in possible 

legislation that we have. I thank you very much for being part of 

this hearing, Mr. Porter. 

Mr. PORTER. Nya-weh. Thank you very much. 

The CHAIRMAN. I would like to invite the second panel to the witness table. Serving on our second panel is Mr. Kevin Washburn, 

the Dean of the School of Law Administration at the University of 

New Mexico; Mr. I. Nelson Rose, Senior Professor at the Whittier 

School of Law; and Mr. Alex Skibine, Professor at the S.J. Quinney 

College of Law at the University of Utah. 

Mr. Washburn, would you please proceed with your testimony? 

STATEMENT OF KEVIN K. WASHBURN, DEAN, UNIVERSITY OF 

NEW MEXICO SCHOOL OF LAW 

Mr. WASHBURN. Thank you, Mr. Chairman and Mr. Vice Chairman and Senator Udall. And thank you, Senator Udall, for those 

kind words. 

Senator Udall is one of the alums that we are most proud of at 

the University of New Mexico. 

The OLC opinion that was issued just before Christmas created 

kind of a chaotic atmosphere. Professor Rose has noted this in his 

own testimony. It created kind of a wild west type situation, and 

it is has really forced, I think, Congress’ hand. I think Congress 

does need to act here. 

And I think I have two points to make today. One is that there 

is a strong Federal interest in Indian gaming. This was viewed as 

a very important resource for Tribes by the Federal Government. 

When the Indian Gaming Regulatory Act was passed in 1988, it 

had bipartisan support. Senator Udall’s uncle, Mo Udall, was a big 

Democrat who was very involved in its passage. 

But the Reagan Administration also was very supportive of the 

Indian Gaming Regulatory Act. Ronald Reagan signed the bill. And 

keep in mind that they might have had slightly different reasons 

for being supportive of this bill, but they were both supportive. 

Reagan wanted to foster Indian gaming as a means of self-sufficiency for Tribes. I think on the other side of the aisle, the idea 

13

was just to increase Tribal resources to improve self-governance 

and self-determination. But there was tremendous bipartisan support for the idea of Indian gaming. 

And Indian gaming has provided incredibly well for the needs 

that otherwise, and for many Tribes, the Federal Government 

might well be providing. So Indian gaming is getting the Federal 

Government off the hook in a great measure for funds that would 

otherwise need to be expended by the Federal Government, at least 

in some measure. 

So that is an important background principle, as this Internet 

gaming boom begins. We have to protect this Federal resource, 

really, for Tribes. Tribes need to have access to this resource that 

has been so important for their self-determination and self-governance. 

Now, I think Congress needs to get involved, and I think OLC 

at the Justice Department has largely forced your hand. I think it 

is very, very important. We have long had a schizophrenic approach to gambling in the United States. Why is that? It is not entirely clear. But one of the things is that we have these 50 State 

laboratories that get to decide gaming policy each on their own. 

And it is very important that States be able to decide their own 

views toward gambling. There is a question about how much their 

own views ought to apply on the Indian reservation. 

But it is true that States do have differing views on gambling. 

We still have a couple of States that largely prohibit gambling. We 

do have, though, broad agreement that if gambling is going to 

exist, it should be a public resource. One of the areas, when we 

look at these charts, we see between lotteries and VLTs and Indian 

gaming, those are all governmental forms of gaming, in essence. 

That is almost 60 percent of the gaming on this chart. 

So there is common belief that gaming should be a public resource. It should help develop governmental resources, and that is 

what we have used it for. 

I think that States should be able to opt out of gaming, if they 

wish. But if they wish to have gaming, most States agree on all the 

things that are harmful about gaming. The regulatory interests 

that all States have about gaming are largely the same. They want 

to try to minimize compulsive gambling, for example. They want to 

prevent money laundering and prevent organized crime from infiltrating casinos or gambling. They want consumer protection. They 

want the gambling to be fair to the people who do it. And they 

want to ensure, of course, that the governmental fees that are large 

underpinning of all this gaming, that taxes or fees are paid. 

So they all have the same interest in how we regulate gaming. 

So I think that tells us to some degree we don’t need each State 

doing it individually, because they all have the same interest. It 

would be far more efficient to have one entity at the Federal level 

that does that, that handles that regulation of gaming. And that 

entity at the Federal level should be keenly focused on protecting 

the importance of Indian gaming to Indian Tribes. Because we 

have created a resource here, $30 billion in 2009, that is being used 

by Tribal governments all over the Country, and it is absolutely 

fundamentally important. Internet gaming causes some risk to that 

14

very strong revenue source. And if that revenue source goes away, 

that is going to be Federal responsibility to meet those needs. 

So I think Congress should act. I think Congress should get right 

in the middle of this and Federalize the regulation of Internet gaming. 

Thank you. 

[The prepared statement of Mr. Washburn follows:]

PREPARED STATEMENT OF KEVIN K. WASHBURN, DEAN, UNIVERSITY OF NEW MEXICO

SCHOOL OF LAW


209a1.eps
15


209a2.eps

mU!it be u~ed primarily far public purpos.:~, narolnr, fl"~ authorized uses: "(n 10 t~ll\o,\ tribal 

gll'!~rnmentop:Tlltk\t:IS orprOll.rams; (ii) to provtde !Qr lil:e general welfare of the Indi1l;\ tribe ~Ild 

ft~ mcmlrers; {iii) to promote t,ibn! =om!c dcy"wpmCl\!; {iv) rn doo~ "» charitable 

mg,>nh:lllio;).,s; Of til ro \llilp fund opemm'llS cfk!<';cl governmcnlll.,gcnci<l<',.-'1 

The k5a\ regime set r(Jtt,~ in lGRA flas alwwed Jmmy triOOs ttl pr.I3P"'1". Tho Reagm;. 

AdministrnljD~'s hcpe~ f(ll' Indinll gaming have ~~!\ r~alized, probably beymt(\ thdr wildest 

cKpeo:tations, lndiQJl g.~mjl!g I13S b~n the gn:nlOSt <;COl'\ondc el!gine 01\ indlal! ~SCfV~tioM that 

the United States has ever ~OCll. From 199810 2(llli, IlIdl;m Gaming grossed more (hun $246.2. 

hillion nntionwid~.~ Cl:)nslst~nt with the purposes speoified by Congress, mo~t of these have 

b<:()!l. used to fund t!'ib~j op.:rotton5 a.'ld promote t.'1e ecorwmie. tkwclopmenl and w~lfl.lr<l of tribes. 

;lnu mili~1l IJe<Jille. 

Fpr m>hmi'.E, =ommg to l.M N;lli~wl IMim (laming As:mci.aftoo's {WGA} Ee6nOO!fu. !t:::~ 

Repnri f(l1"'2{l(l!?, 23.7 Iodia!) trib~.in 23 ~tme:!ll.;ad usedlndjan 'gaming rn creMe MW jQW, fund 

essential gowmmll;l, r..ervices and rebuild cmnmunitleiJ, 111 2f109 tribal gr.wcmOltll"l.tJ' lIenerated 

$26.2. billion groSS f(l\'~nll~ from gaming alone" ZO% of that net revenue Wnll declicated 10 

education, children and eM.<1rs, culture and charity, 19% to economic developmml, 11% tQ neallh 

oare,. 11"/0 to pelice ar.d fi("~ protection, 16% lowal'ds !f!/f;t.llrWJ\ure and 1 [% towardS hllu~!ng.6 

While triba! revenullS all\1C~U()n pillfls that provide fur p~r capita payments to individual Iribal 

m.embers !lave \::~~n approved by th" S=e\m"Y of ~1\"lI!1teriol"" ~nd have earned a f,~l\:at d~al of 

p!"<$S (ttli:n!ron, JU(l~t ofthese pa.:;m~i~ na¥1< >fune little mure tltar. to j~c ~hok! income 

and 1m $)= l!l.dil\<l C"11~5 out nfpow"'...rt'J_ In mld;:ion In getr".$.f',. r.;>\'Wue9, tribe.'; ge=1l::ci' 

.$3..1 «[fum in gross: (evenua from. rel$te.:l hospltaiity mid OOlertainmoo.l ~ef'dCl)$ $Ullh -as rerorts 

and err:-ertamru.ent ~1~.;ws.' As of 2Im9, tribal governments h~ ciiwctly or lndireetiy 

generated 628,000 jobs nfitionwide for AmeriMIt lllcl!QIIl.l and others.$ As a rtl;lu\t of lj8ming, 

tribes hove expC!tiCMM Cl(lcnsive economic dev~l(Jpm~nt and buill strong governmental 

il1frastructures. 

rIO ~Um, gammg has !Ss!~d In prod"Ucillg str(!!1g td!;:aI ~ovemmenlal infrastf\tctures.. Tribal 

gaming reY~nues 1w.'X" b.lcll a buoo tt; Ihe fui1eral ~Wll1ltlfmt ~s well. III 1igt!.t ofilie f!.'d&~i 

g::no;::rnmellfs lms! r~9'Ol'ISibmty w the trJba.!i, ir wculd :l!roly M>re had I\:< "ll~'ild m.,.-,.--e on ~I 

'25 U.s.Coli 2.7J'.l(2)(S){I)-i"). 

, SIN Gumil1Ji" (I..MNUt fI..perlS, NAl"J.. 

h1Ip'llw ... ;w.nJ~govIOntnl~~_!t~ •• 4"CJu,Porl:l.osp. •• 

• Eca""I!Iio R.port, ~~oll: I 4111, , /d. 

o fo. ~\ 1_ 

OMiINO eNlOe), 
16


209a3.eps

Indion programs it! {he a\Jsence of Indion gaming. In addition, Indian gaming revenues have 

produced tax re~nues for the federal government, !xltl! directly and indirectly, IUld reVCll\l", 

shares. fur sta13 governments. 

Allhoogil ?redictions are diffictllr.. especially abtmt the jl.Jture, Internet gammg poses Sfl:1'!e 

magnitude of threat to tbe brick and mortar casino industry. including tribal taSltl05. ?cde:al 

policy toward Internet gaming going fmwam should recognize the significant risk 10 the ~l.iJble 

revenue stream upon which many tribes have belm abl3 to depend. Under the worst case 

scenario, a shift in the market for gaming away from land-based casinos 3nd Itlward Internet 

gaming could vastly increase NvemlOS to pri ... al~ and evcn ofT·shore Internet gMlins companies 

and decrease tribal govemmentlll revenues, phm8ine: ~ome tribal nations b~ck into poverty. 

Federal policy mnsl recognize !Iud seek!O mitigate thl.'l risk, so lIS to preserve gaming IlS a vinble 

m= ofmisir.g govem:nental resourees for tribill government!;. 

I. The Demand for Internet Gaming SbtJllld be itec(Jguired and Internet Gallliug 

Sllould be Legalized and Regulated 

The popularity of Internet gaming has been growing, both globally ami in the Unltod Stales. 

Aocording to H2 Gambling Capital, global onlin~ gumbllng r'N~nYc in 2010 was Ilearly S30 

billion, and less than 15 pcrc~"! orthat came from the U.S.9 In light of the strong publio demand 

fur illlcrnct gaming, Stioh gambling activity is bo-und to (100nf. If it is not regulated. it will 

~t fill of Ih" risk!; inherent 10 unregullited gaming. such as compulsive gambling, money 

Illumierlng, unwise extension of credi; and other iUs. Tlldeed, the greale!;t threat is !lot legalizing 

and regulating In!ernetgamlng. 

While the recent opinion by the Office of Legal Coun~el at the Depnrtment of Justice has 

produced chaos. it Im.~ forced a discussion that is due. It Is long since time Ibr poUcy make~ in 

the United States to addnlss lnremet gaming. While our model of government with its separation 

ofpowcrs has been gencndly successful in pre\'~nting goverlUllcll!al tyranny, it h~s produced a 

very uneven appr()ll.ch toward Internet gaming. Inde~d, the approach toward IntcOict gruning in 

the United States hM va¢matod betwccn: prohibition lind Os\rich·style avcidancc. Congres.<;jonat 

polley m~ke~s, ap;mrentiy lacking fue will to ncldJ'ess Intemet gaming head on, have sought to 

place barriers in Its pnth by, foc example, prohibiting the use of credit C!lfds, Proser--utors, 

repr·~setlting the Executive Branch, have sDITletimos ignored Interne! gaming, and have at ctht:r 

limes brought their most significant prohibitory powers 10 benr, secking to incarcerate pUrlleyors 

, 0111;'", GambUIIg, AMB~I('.A]oI GAMING A~WClA11ON (AGA), htlp:ll"ww.3ntorlc:angnmlngnrg!govcrnmcnt. 

~ ITa! rsJkey-! ,"ucs/onltuo. ~.mb!lng. 
17


209a4.eps

oflntcrne( gaming. Jfhi.~tory is any guide, prohibition undermines governmental control and 

places such control and profits in black markl:t cnllties. This. has produced n haphilZard 

approllCh, On~ of the prob!lm1s in lhe current federal I!ppwach is lrot it hllS fallen very unevenly 

on Internet providers, scaring :l1V'JY legitimate companics Md ro'N<!roing with great riche~ somo 

:lldivi6Jals who are willing to tllke the signilicaat legal risk!> involved. I{ is timC fbc the Un:tcd 

Slales tQ formulate a coherent approach 1owart! lntemet gaming. 

Through appropriate (egulation, apprm:imately 85 countries have been able to provide their 

citizens with consumer proteotions while reaping the eoonomic benefit.> ofonl1ne gaming. I" The 

potential rcv~nues ate significant, Rkk Bron5on, Chairman of u.s, DigitW. G~ming, ha3 

estimated thut online poker could generate $12 billion annual revenue in the U.S,1l WIth the 

llros~~t of generating more governmental reVMue through t3;'l:atiol' .. 100 support tQ legalim 

cnline gaming is rnpidly mounting. California ~as estimated that legall:i:ing online poker would 

oct the state $100 to $250 mlllion 11 y= wn;eh eouId help .ad&= its S9.2 bllUon budget 

sl1ortfall.t2 The ~tl\tc of Jo\va re!e!\Sed a strnly h December 2011 which ?redlcted Qollne poker 

alone could net thest!l.W $3 million to SI3 million llnnUaUy.(l 

If legalized Hnd regulafw, Internet gaming would no longer pose the socicl1II thrent tho! mUlly 

believe it docs. Internet gaming can be regulated. In fact, the AGA has stated, "onr concerns 

about technology hav~ bc~" eliminated by ~dv"llcemcnts in the fieW, and [we] belie\'\; tlmt the 

technology now exiS"' ..s to properiy regulate Internet gamhEng [and) provide aPPTClpriate 

consumer protections fur lndivic.ucis .. .',H With i1:creased cOllsume:-prote~tion and the possibility 

of Ill:W r,,';'e\1OO for govcmmcnl$, onlfuc gami~.,g in tI1C Uni,ed Sta!cs is inevilab!c, In fH<.."'l. 

Pmfeswr 1. Nelson Rose hru: predicted Ih~. 1n light of the DepJlrtlllent of Justice's new 

interpretation of the Wire Act. stares are going to move faster to approve online gaming than 

they did lotteries. I concur with his prediction, It is imperative that Congres5ionai policy makers 

address Internct gamine;. TIle United Statc5 should enact leJ;:islation at the federal level to create 

an emdent, unifOm"l regulatory ~ystelll that ean protect consumers, address pot~ntial social 

lD T"':imc~'y "fH<m. Allb""" D'Am~la, u.s. Slmilla Q>mm,U<x <).~ T~ill"" "IT";,.,., N<>v. 17, Wil, a!,,,i/ai:k al 

h(Ij!';li!ldiur~""~orte.govlMnrin.¢Up1n!ldlAtf""""_D.t.rn"!l>-tesll.'Itll1IY.I'df. 

" !lnj<lj, l'rnnci", OnliJoe O"",I"K Cas]""" I~ 'Sll'o!>!p. U.S. ii' lUI], ABC NEIVS, Doc. 28, 2011, aw;;l!ahl~ aI 

hUI'''fabCJmw".go.c~mlbl(\g.'''i><:1:dtin=O Ilfl2Avl""'"!!""",,Ii~"·g.~,bling-c""inO""tO-'V."'''I'·u-"'';n-201")j. 

"Mi,h.cl Cooper,A.SIn"'" Weigh Online GlJmblJlog, Pr~jil Ml1Yw$mall, N.V. TIM!;.';, 1:m. t7, 2t)12, In'll/lab'" or 

hUp:llw",.w,nyt;mos,cornr.!O!2IOt{lBf"slmaro-stalos-look~([]-I'W'tlm-cnlln,..g"mbling.html. 

'lkJ. 

" Olllln~ Gaming. supra nate 11, 
18


209a5.eps

halms oflnlemet gaming, and provide needlXl regula!ory structure and oversight oflhls growing 

industry. 

Tile Tn!elTle! has t\mdarm:mla!ly changed wilimcroe In the UnITed &me>. :and thro~oul lhe 

wond. Electrons simply do not know politica.! bmmdarle~, As a resnlt, the internet Ul1dennines 

eITorts 10 prBWrve tbe salience of political borders in an increasingly global world, The 

Departmenl of Justi~~'s mos; re~ent interpretation of the Wire Act allows intlil~tnte oUline 

g~ming, which further dissolves geogmphic bOllndar!o~ ~nd complicates r~\1h\()(lll. It is 

inevitable that a gambler in StutcX Illay seck;o gambll!. at his fltvorite casino I=t~d in Si1tle Y. 

White it is pos;lble to declal'<! t;m;h action iHe~l, it is much more difficult to stop it Mo(ooVl..'l", 

it l~ >lot ek'll, wily it should bo stopped. If at; action i~ leGl'l b bOlll states, why shouldn't an 

An;e.";= ce nble to gamble in eifuer kc:;,tiV!l~ The only c.m:itytMl: <l"..tl effuctj"'.llyregulate:tcth 

~itllatioo:s, rowe,=", is the United SMC g::I'I'.;r.:llllent. ?;CSJll1ahly. ihis is fue TeflSCn thal the 

drafters included the Intmt<lte Cmnmerc~ C!3UI"C hI the Constitution. giving the federal 

government the exclusive! outhority 10 regulalecommoroo between people in dif'furellt slates. 

fQderal regulation i9jn~t!fled fur nthr reilSons ilS well. ImlMdunl ~tatcs simply nrc not equipped 

til regulale online g.;uning ond it would be highly inefficient fOfcompanies and taxpayers to have 

51 different Ameriwn regulatofY regimes. Mo~\'er. in a fteld in whkh t'1c techllOtogy is 

tal)idly ~inr:cing. the fu&rai goV':;;rmmml hiW grellle> res(!tm:e> and fewer jurisdictional hnrd!cs 

to teguJll:igg Ihls expans!vfl industry, TIw- [eli",,;!! gQvem:;ne:nt shruM fake actlon before 3(10 to 40 

srotc::; Ilegfu ir:.wrung valuable ptililic roS'7J[SIlS to '1wlld ~illtory regimes. 

Tbe AGA is Hiso c()I'Iccrnoo with state regulation of .:>nline SHilling and believe:; that (>'"isting 

laws do nOI adequ~!ely prot~ct the millions of Amerkws whQ gamble .online e"ICry d!!.y. In 

~vocating for an eneoll1pil5~ing legal framework It) ~gtllate Intemet gHl11blinf!. the AGA 

eXplained. 

g[a]Itllvugh each £tI)te should lmve lhe diseretiom to d>::ehlOl' whe!lte.- OJ' not to p~fmit 

{lnline- g~nnbttng within its imrderr._ i:!dividual sl&$ siu:mW oo! be F.ble to create }h-ir 

.(111'11 oMne g!\$bll'lg reglm:=s.. The. res'J1l. WOl!k! be a lngal p(\t.;.h",,,,rX Ill"" \¥OIlK make 

little e<:onom..iu sense, with cnline po!;er permItted in one state, a sl-at<': lottery off.mH!,'; 

-casino gamll5 in a second slsle, ami -II third Slnle authorirlng only Internet blacl\.j~ck. TIle 

result would be confu~ion for consumers and nn lllefficient overlap in rogub.ltory effort. 
19


209a6.eps

Thus the only proper wny to regulate such an eXJ)1lnsive industry is through a federal 

~gcnc)'."I) 

I agree. This potential regulatory c3lamity has already beg-"n to unfold amllng srntes on th" East 

Coas~ When New Jersey Gm-emor Chri, Chrhtie announeed that he wWlted New Jersey m be 

the online gaming ~pjta! of.he lvonl, Mf.8Sn®usct's quickly Ilunounced plnns for iucreaseci 

gnming opportunltio$. Upon heuring rumors or increru;ing competition, Com\cC1lcui Governor 

D!Ulnel Malloy began talks with the state's two I~rg~~t tribes to Pllt thr.m in ~hargc or 

CountlCticut's new online gamine ~nterpri5e.l. The result could be a "ra~e to the bottom" with 

commcrc~ moving toward the state with the weakest regulal(lry control5. In sum, we ~an already 

see complex problems enlerging if we allow individual states to regulate a borde.rlcss industry. 

Por pUf?cses of gaming regulati:m, the ri5h li.!isoojated witb gambling are similar throughcut the 

cau:1lry. The risks include compulsive g~mb!ing, organized o:rime, embe7.;;;le-mC2lt, true: evasi:lll 

and money iall .. "ldIlring:. m'!cn the uniforJnity of th", risks, it makes little SCllse to ita;'i:: a New 

JcrSllY approach to Internet gruning regulation and a MassachuseLts 3pproiiCh. With ils broad 

reach, 5igniflcant rtlSOUI'(;QS, and c..:isling infrastlU~turc to monitor and address financial risks, the 

federal government should occupy the field. Indeed, without a systematic, federal regulal(lry 

scheme, laws will vary nationwld~ likely spurring di~orimination or market domination iS5ue~ 

and mcrea5c the number ofdh'eTsity suits filed in federal oourt. 

ut To Prc:serl"c Socil>economie Gaius .hrt Have Ckolrrod DIITi"!! the PlI!lt Quarter 

Ccnillry, Tribes M!I.~t Hnve nn &}uIII OpportunEly to Engage hi Internet Gllming 

TIlc story ofIndlan NlLlions is 3 st-ory o[su,vival, Without equal opportunity to partieipale in th~ 

next frontier in gaming, tribes arc at risk of falling back into pre-Indian gaming ~ociocconomic 

conditions. 

Prior to the introduction of gaming, American lndian communities had been correctly likened to 

Third World GOuntdes operaling within stata bordeJ'll.I? Na1imwJly, America'llndian fillnilies 

" D~vi~ O. SIOWllrt, On/jn. G"",ing FNe )'~~"s 11/1", UIGEA, AGA, tE (2011). 

h~Ip:IIW\' w .",none,"~. m ing.Q rglfi t"-"agalu p to .dstdoosl rm.l ~ 01 i~" ...!lam bl in!L woi 10 J"~' r _ 5-1 8·1 I.po r. 

" 1.110)' Nnlpath.nohll. COWl. Tribe, /fop, '0 WIll Big Jl'i,h 0,,1/1OiI Poker, NPR, l~n. 24, ~Ol', llI'all~/Jf. ar 

h\I.p:l!wl'iw.TIpr .orl'f20 12!(t !l2~1! 4$65 4 870liTI-OO nn ·In bo.o-h ope-lr>-win.bi g.wilh ..,nl i ""1"'hr. 

"JOUles 1. Schaap, Tloe Growth iflhe NalllY! AmorIM" G.>/IlI'>g Imillorlry WIlli' liTIS lile l'rull'ravlrkd. ~tod WI",,, 

Da." 1M F"Il'1"II Hohi'?, 34 A\U1il1CAN lNDIAN Q. 365, 361 (SIImm". :W1O~ 
20


209a7.eps

lived b~low the pDVerty Iinc al H rate nearly three timell the nationnlnverage.11 For e.'l:ample, in 

New Mexico n~-arly half of the Indians lived below the poverty level and one·qu3rt~r lived in 

homes without pll1mblng.l~ Approximately 90,000 AmeriC3n [ndian families in Indian cOllntry 

IWre home!ess 1,Ir "under h1,lused.',lO Bercm: Indian gaming, kncricall IndiUM suffered !tom 

diabetes at lWO ar;cl a halftimes the mrtklllal ratc and wlcide rate; were betwee:l. two and three 

times tbe runlonalllVenlge.~1 

Indian gaming hre; not solV\:d these problem;, but it haa improved them. !ndl!lJ1 gaming has not 

only had a positive economic and social impact on the tribes themselves, but also on the 

surrounding communities.~ Uncmploymcnt rate; mel poverty percentages have dramatioslly 

decreased, as have instances afsuicide, domestic violence and crime, while gr<ldlllllion raleS or 

iribcl. members have increased,2> 

Dcspit.c Ina :SU<:CI.lSS of!udlan guml11\:.ln ;mprovir.g.llfu on Ille Ra...ervatlon, 1r.uoh l"'..mains to be 

dene. As of20[O, the poverty rate amor:g American [ndians Wa3 25.3 percent compart\rl to tho 

national averag~ of 12.6 percent~" Only 13.6 percent of American Indians have attained a 

bachelor's degree Of high"'f comp~red wilh 27.2 pcr~cnt of the general puh1ic,~5 About 2.IJ 

pcrcent of homes in lril)/\] areas lack <Xlmpiete plulllbrng fucilities compared with A2 percent 

natitmwide.2i It is imperative that Indians be given equal opportunity to compete. on the S!lmC 

level as commercial C!\~ino5 hl order to continue combating thes~ and other Qocioeconomic 

problems endemic to lheir trihl:s. 

"American fl",,,,n Ganli>lg {'nller <VId IItSocio-&olfflmic Effier~-A /l2pm 10 rho NN/allaIGalll/II!: Impact Sfudy 

CammiJ>irm. NlGA,. July 1998 /IWllhlbl. nl hltP:"" ... · ... ;ndI."l\"mlng.orgll;b"")'/rc.""\lrce-c.nler"n~.~.htrnl. I. J011"lhoo T:I)'lor & ]o!mph KnIt, Anmric"" I"dimls om Re.'<f!ryillign<' II /J<JllIMak at S""{a,c(II1IOIII;c Change 

ben""" rl,. 1990 and 1000 C""SllIiC$, l-/:u-va.-d Proj'CI on Am<>rIcan [ndl"" Economic Developmenl, ll.no"ro 

Univ=ily, C.rnl:!rirlgo, MA, l'nnu.ry ~OOj. 

'" ",,,.rican 1m/I"" Gw.;ing PoIil:y.~"pra "ol~ III ,. Iti, 

"'i'l", G",w* '?/th NaJiI .. Amerlc,,_~ Onmi_"JJ fn"'""i>:;'< ,mflNl- n~te .1 ~l 3701 (dring J.:r.mth.11 Thy tor. )'frutlt6w 

Krqljll< & rmrldl! Wong, n. Nallonall!~~ 1m !heSacl=<Nl<l1!1ic J",p[l'"~ if Arnerim~ !Miml Gwring. April 

2000. i br\!;1fd Llnj''Il,$'.tylL<:;I...,cnn, http://www.lndI.n~ •• ming.Wll.1ibrarylortkle!Olh=-=:momi.·d • ."~j..P...cnl.­

journey.htmt, expl.inulJ! 1M!. '~his CITCOl is ~riven hy to. f-l~t .-il'!! Indbn culn'" 3'" mor-o n~"ly !U b" localed in 

r-ololive1y eoo'LQn,;c.lly dop.-..s.~d "r= displaying low~ ~vemsc Inoome< prJor '" , .. Ino lnlrodllcti"",,") 

., Id .t 375 . 

.. TIN Grmt'ln <if/h. NaI,,,"A,,,,,rll:<lnG<lm;ng ImillslrJ'. >"fH1'tlQI~ 17 0131;. 

';d 

. '" 
21

The CHAIRMAN. Thank you very much, Mr. Washburn. 

Mr. Rose, will you please proceed with your testimony? 

STATEMENT OF I. NELSON ROSE, DISTINGUISHED SENIOR 

PROFESSOR, WHITTIER LAW SCHOOL 

Mr. ROSE. Thank you and good afternoon, Chairman Akaka, 

aloha, and Senator Udall, thank you for inviting me. 

My name is I. Nelson Rose. I am a distinguished senior professor 

at Whittier Law School and the author of Gambling and The Law 

and Internet Gaming Law. 


209a8.eps
22

I prepared a written statement, but what I want to do here is 

focus on the two big questions: what did that announcement by the 

Department of Justice mean for State legal gambling and what 

does it mean for the Tribes? 

We are in what I call the third wave of legal gambling. This is 

the third time in American history that gambling has spread everywhere. Historically, it has always been up to the States to decide 

their own public policy toward gambling. And the role of the Federal Government has simply been to help the States. Federal laws 

can be seen as basically enforcement statutes. 

So if you look over all the Federal statutes, they all require that 

the gambling be illegal for the Federal statute to apply. The only 

two exceptions are the Federal anti-lottery statutes, which have express exemptions for State lotteries, and the Wire Act. The Wire 

Act was the main weapon that was used by the Department of Justice in its war of intimidation, to try to scare players, payment 

processors and operators out of the American market. 

That weapon is now gone. There basically is now no Federal statute that would prevent a State from legalizing virtually any form 

of Internet gambling with the exception of sports betting. And even 

that is under attack in the court. States can legalize, they can form 

compacts for interstate and even international to create pools of 

players. They can take bets from each other. 

The first to act, and they are already starting, are the State lotteries. Because they don’t need the statutes, they can pass regulations. There are at least six State lotteries that are already selling 

lottery tickets through the Internet by subscription. They now can 

sell individual tickets. 

The big question is, will they go with instant lottery. Because if 

you put a scratcher on a video screen, it becomes almost indistinguishable from a slot machine. 

But we are not going to be just limited to lotteries. Every State 

looks at gambling as a painless tax. They are all desperate for revenue. So they are all looking to get into Internet poker, Internet 

casinos if they can. They are doing this to raise money, which 

means if the big players are the local operators, then they are the 

ones who are going to get the licenses. 

In New Jersey, where there are no Tribes, New Jersey will be 

legalizing Internet casinos this year, and all of the licenses will go 

to Atlantic City casinos. If Connecticut legalizes, then the two licenses will go to the two large Indian gaming Tribes. But in every 

other State, what the Tribes are going to be forced to do is basically 

compete for a very limited number of licenses. 

The problem is, and I have looked at this law very carefully, 

under Cabazon and IGRA, the Tribes have two tests. You look to 

see what is permitted in the State and then the Tribes can do it. 

But it seems to me pretty clear the courts are going to say they 

are limited to taking bets from people who are physically on their 

land. 

Now, they can take bets off-reservation. But that is if and only 

if the States agree. In other words, for a Tribe to do Internet gambling and take patrons who are off reservation, that is a privilege, 

not a right. 

23

So the question is, what is this going to mean for the Tribes, and 

in some cases, the big Tribes, the ones that are well-established, 

can protect themselves. They have the political power, they have 

compacts in place. 

But it is really up to Congress to protect the rest, particularly 

small Tribes that are not near cities that are basically not going 

to be getting the licenses and are now going to have this additional 

competition with no reason to go onto their reservation to gamble. 

In fact, one point that I want to raise that hasn’t been raised, 

it is not even clear that Tribes can keep Internet gambling off their 

land if a State legalizes. There are some precedents that say State 

lotteries can sell on Indian land. 

Of course, any attempt to expand Indian gaming rights is obviously going to meet with strong opposition from most of the States. 

The problem is, it is a problem that has to be resolved now. In 

1962, there were no State lotteries in the United States. Half a 

century later, we have State lotteries in every State, with only a 

half a dozen that don’t have State lotteries. But the Internet, the 

speed of change on the Internet is like dog years. It is not going 

to take four or five decades. Within much less than one decade we 

are going to see Internet gambling legalized by all the States. And 

unless Congress figures out a way to protect particularly the small 

Tribes, I think that a lot of the Tribes are going to be out of luck. 

I want to thank you, mahalo, and I am looking forward to your 

questions. 

[The prepared statement of Mr. Rose follows:]

PREPARED STATEMENT OF I. NELSON ROSE, DISTINGUISHED SENIOR PROFESSOR, 

WHITTIER LAW SCHOOL

As a completely unexpected gift to the states, announced two days before Christmas, the United States Department of Justice (DoJ) declared that states are now 

free to legalize almost every form of Internet gambling, and not be worried about 

federal laws. This might not have been the intent—the ruling dealt with state lottery subscription sales—but the result will be an explosion of poker, instant lotteries 

and casino games on the Internet, run or licensed by the states. And, although the 

DoJ was careful to say the opinion is limited to intra-state gambling, there is now 

nothing stopping states from entering into compacts for online gambling with other 

states, and even foreign nations. 

Many tribes, especially those with established landbased gaming operations, are 

worried that they might not be included in this coming proliferation of state-operated and -licensed Internet gambling. And they have every reason to worry. 

Although tribes have the right to operate any form of gambling permitted under 

the laws of the state where the tribe is located, it seems likely that courts would 

limit that right to patrons who are physically on Indian lands. Tribes are not prohibited from taking bets from throughout a state. But that would be a privilege 

granted by a state, not a right. And, the state could not be sued for bad faith if 

it refused to let tribes accept off-reservation wagers. This puts tribes in the position 

of having to compete for a limited number of Internet gambling licenses, to be 

issued by not always friendly state governments. 

The tests for Indian gaming seem clear, based on the decision of the U.S. Supreme 

Court in California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 

1083 (1987), and the declarations of Congress in the subsequent Indian Gaming 

Regulatory Act (IGRA), 25 U.S.C. § § 2701–21 and 18 U.S.C. § § 1166–68. First, what 

is permitted in the state? This is a shorthand for requiring tribes to follow the public policy of the state toward specific forms of gambling. Second, tribes regulate, 

sometimes with, sometimes without, state or federal governments, but only if the 

gambling is conducted on Indian lands. Tribes in Nevada can operate casinos and 

sports books; tribes in Utah have none. 

This limit on tribal gaming to Indian lands is particularly true with Class II gaming. So, if a state legalized Internet bingo or poker, tribes could also conduct those 

24

games online, and would not need a tribal-state compact. But players would have 

to be physically present on Indian lands. There might be ways around this—proxy 

play for bingo has been tried—but that would not work with poker. 

The argument for limiting Class III gambling to Indian lands is weaker. There 

is an express exemption in IGRA for tribal lotteries from the federal anti-lottery 

statutes, 18 U.S.C. § § 1301–1304 (IGRA § 2720). But this only proves Congress intended to allow tribes to send lottery tickets across state lines and through the U.S. 

Mail. The lottery would have to be conducted pursuant to a tribal-state compact, 

and the statutes do not necessarily indicate Congress intended to allow sales offreservation. Tribes also can clearly operate off-track betting (OTB), even though the 

races are taking place on non-Indian lands. But even though states have to agree 

to compacts allowing their tribes to operate OTBs, it is not clear that states would 

have to allow tribes to accept wagers from bettors who are not physically on Indian 

land. A majority of states allow remote betting conducted by state-licensed OTBs 

through Advanced Deposit Wagering (ADW), where players fund their accounts in 

advance over the phone or through the Internet. Even though a state might agree 

to tribal ADWs, that does not mean it had to. 

I think courts would find tribes could demand compacts if states legalized Internet lotteries, casinos, sports betting and other Class III gaming. But, again, the bettors would have to be on Indian lands. 

The Unlawful Internet Gambling Enforcement Act (UIGEA), 31 U.S.C. § § 5361 

et seq., does allow tribes to go across state lines for inter-tribal Internet gambling, 

Class II or III, but players are, again, expressly limited to those on Indian lands. 

31 U.S.C. § § 5362(10)(C). 

The reason for the coming explosion of state-legal Internet gambling was the declaration by the Barack Obama administration that the major federal anti-gambling 

statute, the Wire Act, 18 U.S.C. § 1084, applies only to bets on sports events and 

races. State legislators and governors are desperate to find ways to raise revenue 

without raising taxes. Gambling is seen as a painless tax, so every state is looking 

into expanding legal gaming. They can now do so. The only exception is sports betting, which cannot be introduced into a state that does not already have it, due to 

a different federal statute, the Professional and Amateur Sports Protection Act 

(PASPA), 28 U.S.C. § § 3701–3704. And, New Jersey, which would like to also have 

true sports betting, has filed a court challenge to the PASPA. 

Federal anti-gambling statutes can be seen as being merely enforcement laws, not 

legalizing or prohibiting any form of gambling. So, with only two exceptions, all federal anti-gambling statutes apply only to gambling that violates some other federal 

or state law. Only the federal anti-lottery statutes and the Wire Act can apply to 

gambling that is legal under state law. But, long before Powerball, states found 

ways of getting around the federal prohibitions on interstate lotteries, by having no 

money, only information, cross state lines. And state lotteries are now expressly allowed to have multi-state lotteries, 18 U.S.C. § 1301. 

So, the only remaining barrier that blocks states from legalizing games like Internet poker—which is not a lottery—has been the DoJ’s expansive view of the Wire 

Act. For example, when the American Virgin Islands and Nevada passed legislation 

licensing online casinos, the DoJ stopped state regulators from issuing licenses by 

saying they would arrest operators under the Wire Act. Now that the Department 

charged with enforcing the law has limited that statute to cross-border sports bets, 

there is literally no federal law standing in the way of a state authorizing intrastate online games, and even entering into compacts with other states and nations 

to pool players. 

The political fights will be over who gets the licenses. There is so much legal gambling in the U.S. that it is easy for politicians to say, ‘‘We’ve already got casinos, 

racetracks and a state lottery. What’s the big deal about Internet poker?’’ Of course, 

there is so much legal gambling in the U.S. that those casino and racetrack owners, 

and even the state lottery, respond, ‘‘Internet poker is fine, as long as we get to run 

it.’’

But state lawmakers are not proposing legalization to protect local operators; it 

is solely to raise money. Even in states as big as California, the existing cardclubs, 

tribal casinos and racetrack do not have anywhere near enough financial strength 

to outbid outsiders, such as the largest Nevada casino companies and Internet gambling operators. 

Giving the exclusive right to Internet games to the State Lottery might bring in 

more money in the long run, but the states are desperate for cash, now. Only outside companies, like Caesars Entertainment, can come up with the $100 million or 

so the state will want up front. But California’s long-established and politically powerful cardclubs and tribal casinos will not quietly accept an outsider setting up a 

competing operation that brings legal gambling into every home in the state. 

25

Still, there is so much money at stake that political deals will be made. In states 

like Nevada and New Jersey, where the local operators are the big money, the 

landbased casino companies will get the Internet gambling licenses. In states like 

California, local operators will get a license or two, but others will also be sold to 

the highest bidders. 

The great irony is that this coming explosion of legal Internet gambling in the 

U.S. was created in part by a conservative Republican attempting to outlaw online 

gaming. When the GOP controlled Congress and George W. Bush was President, 

Bill Frist (R–TN), then majority leader of the U.S. Senate, attached the UIGEA to 

a must-pass anti-terrorist bill, the SAFE Port Act. But, the UIGEA has many loopholes, accidentally opening the door to many forms of online gaming, including fantasy sports, skill games, and intra-state gambling. The UIGEA has an express exemption for gambling where the bettor and operator are in the same state. It explicitly declares that legal gambling does not violate the UIGEA, even if the wires carrying the gambling information pass into another state. 

It was the last that led to the announcement by the DoJ. The DoJ had always 

taken the position that the Wire Act outlawed all forms of gambling, and that that 

federal law applied so long as the gambling information crossed, even briefly, into 

another state. 

The DoJ decided the only way out of this conflict with the UIGEA was to reinterpret the Wire Act. If this statute applied only to sports bets, then it wouldn’t matter 

if phone lines happened to carry lottery or poker bets across other states. 

The timing was also interesting. Although written months earlier, the DoJ made 

its announcement on Christmas weekend, when news staffs are at their absolute 

minimum. This prevented it from getting any immediate great attention. Even antigambling activists did not notice it for days. Plus, the tie-in to Christmas may not 

have been accidental. This was a gift of hundreds of millions of dollars and thousands of jobs to the states from Pres. Obama, at a time when they desperately need 

help to continue recovering from the Great Recession. 

The Memorandum Opinion was written by Virginia A. Seitz, Assistant Attorney 

General, in the DoJ’s Office of Legal Counsel, and represents the official position 

of the Obama administration. It was written in response to inquiries, some more 

than two years old, from Illinois and New York. Technically, it answered the question: ‘‘Whether proposals by Illinois and New York to use the Internet and out-ofstate transaction processors to sell lottery tickets to in-state adults violate the Wire 

Act.’’ But, it also ended up responding to the letter sent by the Majority Leader of 

the U.S. Senate, Harry Reid (D–NV), and Jon Kyl (R–AZ), the number two Republican in the Senate. They had written to the DoJ, after the District of Columbia Lottery announced it was going to open Internet gaming in Washington, demanding 

that the Department clarify its position on Internet gambling. 

They now have their answer, though it may not have been what they had wanted. 

Instead of declaring the D.C. Lottery’s Internet plans illegal, federal prosecutors will 

now only use the Wire Act when the gambling involves sports events or races across 

state lines. Because interstate horse racing already has its own statute, the only 

federal prohibition remaining on state-legal gambling is on sports betting, and even 

that might be changing. 

The PASPA grandfathers-in Nevada, Delaware and a half-dozen other states, 

while prohibiting any other state from legalizing sports betting. This is now being 

challenged in the courts, because New Jersey voters approved sports betting in November 2011. My guess is that the PASPA will be declared unconstitutional. It is 

as legally irrational as saying that only some states can have movie theaters with 

sound. And it is possibly the only federal statute in history that tells the states they 

cannot change their public policies on gambling. 

The immediate beneficiaries will be the eight state lotteries that are already using 

the Internet. Now, they can use out of state payment processors and will quickly 

expand into selling individual tickets, not just subscriptions. The big question is 

whether they will sell instant tickets online. Because, if you put a scratcher on a 

video screen, it becomes almost indistinguishable from a slot machine. Every state 

lottery is also looking into whether it can offer other games, including online poker, 

as the DC Lottery already has authority to do. After all, most of the provincial lotteries in Canada are already operating Internet poker and other online gambling 

games, or are about to. 

State legislatures are looking at how much revenue they can raise by changing 

their laws to license Internet gambling. Nevada is furthest along, having issued regulations for Internet poker. The Silver State already has online and telephone sports 

betting. It allows remote wagering on casino games from dedicated computer pads, 

limited to casino grounds and excluding hotel rooms. But Nevada will probably not 

26

license true Internet casino games, as long as the state’s brick and mortar casinos 

fear the competition. 

States will then enter into compacts with other states, and even foreign nations. 

In fact, there is no reason to wait. Nevada and the District of Columbia can immediately agree that players in Las Vegas, Reno and Washington can play online poker 

on sites operated by the D.C. Lottery or a Nevada-based casino company. The main 

barriers will be licensing and tax-revenue sharing. But multi-state and multi-national lotteries show these difficulties can be overcome. 

They should also be talking with the governments of England, Alderney and the 

dozens of other foreign jurisdictions that license Internet gaming. So long as they 

stay away from sports betting and lotteries, there is no federal barrier to having 

truly international games. 

This surprise Christmas present from the DoJ will spur other states to legalize. 

Iowa will probably be first. The Iowa Legislature mandated a report, which has already been submitted, concluding that intra-state poker can be operated safely and 

will raise money. This is the third year the Legislature has considered the issue. 

Since it meets for only 100 days, it will act quickly, one way or another. 

California is desperate for any source of revenue, and it has so much legal gambling that the only question is which operators are going to be the big winners. 

In New Jersey, the Democratic-controlled Legislature approved intra-state online 

gaming, but the bill was vetoed by Gov. Chris Christie (R–NJ). Christie understands 

his state needs the money, so he will help put the issue on the ballot in November. 

It should probably be done through a constitutional amendment, to eliminate the 

present language limiting gaming to Atlantic City. The main author, state senator 

Ray Lesniak (D–Union), will probably not limit online patrons to New Jersey, as his 

original bill stated, but instead will accept players from any other state and nation 

where Internet gambling is legal. 

Questions remain. The Wire Act still applies to bets on horse races. In December 

2000, Congress amended the Interstate Horseracing Act, 15 U.S.C. § § 3001–3007, to 

expressly allow the states to decide for themselves whether their residents can make 

bets on horse races by phone and computer. More than half the states have opted 

in under the Interstate Horseracing Act to allow residents to bet by phone or computer, including across state lines. But the DoJ’s official position is still that the 

ADW operator and the bettor have to be in the same state. No one else, including 

the World Trade Organization, agrees with the DoJ. And payment processors have 

to figure out who is right. 

The control of gambling has always been left up to the states. A federal licensing 

law would not really change things that much: States have to be able to opt in or 

out. Congress will not impose the same gambling policy on Nevada and Utah. 

The problem for federally recognized tribes is that gambling remains a public policy decision left to the states. We are in what I call the Third Wave of Legal Gambling. This is the third time in American history that legal gambling has spread 

nearly everywhere. Historically, it has always been up to the states to decide their 

own public policy toward gambling. That is why Utah and Nevada can share a common border, yet have completely different gaming laws. The role of the Federal Government has, until recently, always been limited to helping the states enforce their 

public policies. Congress only acts when it has to, as with interstate horseracing and 

Indian gaming, or when the states have asked for federal assistance, as with the 

Wire Act and other statutes designed to fight organized crime. Even IGRA codifies 

the Supreme Court’s decision in Cabazon that federally recognized tribes can only 

operate those forms of gaming permitted by the state where the tribe is located. 

There are so many statements in the IGRA referring to ‘‘gaming on Indian lands,’’ 

that there can be little doubt that Congress intended to set up a system for allowing 

tribes to have legal gambling on their land, if the games were low-stakes social or 

traditional, Class I, or permitted by the laws of the state where the tribe is located, 

Class II and III. A typical statement comes at the beginning of IGRA in the Findings, 25 U.S.C. § 2701(5): ‘‘Indian tribes have the exclusive right to regulate gaming 

activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal 

law and public policy, prohibit such gaming activity.’’ IGRA contains no similar 

statement referring in any way to allowing tribes to conduct any part of their gaming off Indian lands. 

Even the statement in IGRA, quoted above, that tribes have the exclusive right 

to regulate gambling on their lands might not be true. At least one judge has found 

that state lotteries may sell their tickets on Indians lands, and that the state regulation of gambling, in this case, was not preempted by IGRA or by any other federal 

law. Confederated Tribes and Bands of the Yakama Indian Nation v. Lowry, 968 

F.Supp. 531 (E.D.WA. 1996), judgment vacated by Confederated Tribes & Bands of 

27

Yakama Indian Nation v. Locke, 176 F.3d 467 (9th Cir. 1999). Although the decision 

is non-binding, it indicates that tribes might find it difficult to convince courts to 

keep Internet gaming off their land once a state has made it legal. 

The attempts to make Indian gaming available to the general population of a 

state, without patrons having to come onto Indian lands, have not met with much 

success. The Coeur d’Alene Tribe’s attempt to sell its National Indian Lottery tickets 

by telephone to patrons in most of the states met with such severe legal challenges 

that the Lottery folded. Many of the cases were resolved on legal technicalities. But 

it is clear that a number of judges rejected the Tribe’s argument that the Lottery 

was being conducted on the Tribe’s land in Idaho, merely because the drawings took 

place there. Some judges even objected to tribes ever offering any gambling off-reservation, even if the tribe has express permission from the state. See, e.g., the dissent in AT&T Corporation v. Coeur d’Alene Tribe, 295 F.3d 899, 910 (9th Cir. 2002) 

(Gould, Dissenting); see also State of Missouri v. Coeur d’Alene Tribe, 164 F.3d 1102 

(8th Cir. 1999); AT&T Corporation v. Coeur d’Alene Tribe, 45 F.Supp.2d 995 

(D.Idaho 1998), reversed, 295 F.3d 899 (9th Cir. 2002). 

It is theoretically possible that the DoJ could someday reverse its conclusion that 

the Wire Act’s ‘‘prohibitions relate solely to sport-related gambling activities in 

interstate and foreign commerce.’’ But that is highly unlikely. Not only are such reversals rare, but they tend to be limited to issues a new presidential administration 

considers important, such as Pres. Obama’s reversal of the DoJ’s approval of torture 

under Pres. George W. Bush. Perhaps more importantly, the DoJ’s position is the 

one that is legally correct, and is supported by almost all federal court decisions, 

including consolidated class actions from throughout the U.S. decided by the Fifth 

Circuit Court of Appeals. In Re MasterCard International Inc., 313 F.3d 257 (5th 

Cir. 2002), affirming 132 F.Supp.2d 468 (E.D.LA. 2001). See also, Jubelirer v. 

MasterCard International, Inc., 68 F.Supp.2d 1049 (W.D.Wis. 1999). The only published opinion declaring that the Wire Act does cover non-sports wagering was 

United States v. Lombardo, 639 F. Supp. 2d 1271 (D. Utah. 2007). 

The Wire Act was part of Attorney General Robert F. Kennedy’s war on organized 

crime and was designed to cut the telegraph wires illegal bookies used to get the 

results of horse races before their bettors. Using a 1961 law designed for telegraph 

wires against Internet poker has always been like using stone tools to perform brain 

surgery: It might work, but it would be extremely messy. 

It is worth noting that the UIGEA and other federal anti-gambling laws have not 

been rendered irrelevant by the DoJ’s new position on the Wire Act. The Black Friday indictments, where the U.S. Attorney for the Southern District of New York 

closed down the largest online poker sites then taking money bets from America, 

never mentioned the Wire Act. In that case, the Federal Government bootstrapped 

New York state anti-gambling misdemeanors into federal organized crime felony 

charges. This shows that the DoJ has known for quite a while that the Wire Act 

does not cover poker. It also illustrates the continuing importance of state anti-gambling laws in a federal context. 

I want to make it clear that I am not passing judgment on whether it is a good 

or bad thing that tribes have no inherent rights under Cabazon or IGRA to accept 

off-reservation patrons for Internet gaming. There are some constitutional issues, 

dealing with federalism and state and tribal sovereignty. But it is mainly statutory: 

Congress wrote IGRA to make it clear that tribes could run legal gambling, open 

to the public, but only on Indian lands. 

IGRA was also intended to strengthen tribal governments. So there is nothing 

preventing a tribe from accepting bets off-reservation, if the tribe can reach an 

agreement with the state. 

Some tribes can protect their gaming operations from the coming explosion of online competition, for example, through compacts that are already in place. But it is 

up to Congress to protect the rest. Of course, any attempt to expand Indian gaming 

rights will undoubtedly be met with strong opposition from most of the states. 

Congress should not put off looking at these issues. States are acting. Now. In 

1962, there were no legal state lotteries in the U.S. It took more than 45 years before almost all the states made lotteries legal. Internet years are like ‘‘dog years.’’ 

Developments now happen so fast, that it won’t take four decades before Internet 

gambling is legal in almost every state. And many tribes may be out of luck.

The CHAIRMAN. Thank you very much, Mr. Rose, for your testimony. 

Mr. Skibine, please proceed with your testimony. 

28

STATEMENT OF ALEX T. SKIBINE, PROFESSOR, S.J. QUINNEY 

COLLEGE OF LAW, UNIVERSITY OF UTAH 

Mr. SKIBINE. Thank you, Chairman Akaka, Senator Udall. It is 

a pleasure to testify today on this important issue on Internet gaming. I thank you for inviting me to this hearing. 

Before I became a professor of law, I worked for Morris Udall, 

your uncle, for about 10 years, at a time that the IGRA was first 

enacted into law. And it is a good thing to see that the two main 

movers at that time were Senator Inouye and Senator Udall, at 

least from the Indians’ point of view. It is great to see that we still 

have a chairman from Hawaii and a Udall involved in Indian affairs. 

I am here to testify about why, if Internet gaming is otherwise 

legalized, the special problems of Indians should be taken into consideration. I think there are two reasons for this. One, for sure for 

many Indian Tribes that have Tribal-State compacts, Internet gaming would be legal under their compacts. There is no reason to 

treat Internet gaming as a new form of gaming. If there is poker 

that is allowed as a form of gaming, Internet poker should follow. 

However, for other Tribes, it may not be the case. If so, as a result of the Seminole Tribe, which is a Florida Supreme Court decision, those Tribes would have a very hard time amending their 

compacts, since under that decision, Tribes can no longer sue the 

State in Federal court if the State raised their sovereign immunity 

rights. 

Number two, and Professor Rose alluded to that, even for those 

Tribes for whom it is legal under their existing compact, they may 

be restricted to wagering originating on Indian land. This limitation in effect makes no sense when it comes to Internet gaming, 

since Internet gaming is borderless. And the reason for that limitation is that IGRA was enacted with a concept of land-based sovereignty that is just not applicable or translatable when it comes 

to Internet gaming. 

Having said that, then if Internet gaming is going to be addressed by new legislation, I think it is very important that the 

bargain struck in the original IGRA by Chairman Udall and Chairman Inouye should be respected. As you know, and I’m sure Mr. 

Porter would tell you, the Tribes objected to IGRA when it was first 

enacted. Because they viewed this as an invasion of their sovereignty. Eventually, IGRA was able to work for Indian Tribes. 

But in the process, Inouye and Udall made some bargain with 

those people that were opposed to Indian gaming. So I think in my 

mind, IGRA has three major components, or ideas. First, it respected the victory that the Tribes gained in the Cabazon case, 

which I am sure the next witness will mention. That means that 

Tribes have a right to conduct gaming, as long as it is not prohibited in the State where they are located. I think that bargain 

should still be upheld. 

Number two, we made a decision when we drafted the very first 

Udall bill. And I think Morris Udall was the first one to introduce 

a bill regulating Indian gaming. Gaming was going to be limited 

on the reservation to Tribally-owned establishments. So in effect, 

we viewed Tribes as both the owners and the regulators of gaming. 

And there is a lot of reason why we did that. I think one of the 

29

reasons why we thought that Tribes do not enjoy tax-based revenues that other governments have. So we thought that they needed 

something. And as a result, by the way, by the time IGRA was introduced, there were privately-owned casinos on Indian land. But 

we basically made the option that Tribes are going to be both the 

owners and the regulators. That bargain should also be followed. 

And finally, the third one, when Morris Udall introduced his first 

bill, some people were opposed to it because they thought that it 

was going to give an unfair benefit to the Tribe. As a result, they 

demanded a level playing field between, with the Tribes, that was 

their war cry, so to speak. Eventually, we decided, yes, we are 

going to maintain this by having a Tribal-State compact. And that 

was the essence of the bargain, that the Tribe and the State would 

get together, would negotiate a compact. 

And then we also had this provision that Tribes could sue States 

that did not negotiate in good faith. The Supreme Court got rid of 

that section and as a result IGRA today does not represent a fair 

balance between Tribal interests and State interests. 

I see my time has expired. Thank you very much. 

[The prepared statement of Mr. Skibine follows:]

PREPARED STATEMENT OF ALEX T. SKIBINE, PROFESSOR, S.J. QUINNEY COLLEGE OF

LAW, UNIVERSITY OF UTAH

Chairman Akaka, members of the Committee, it is a pleasure to testify today on 

the important issue of Internet gaming and I thank you for inviting me to this hearing. It is an important issue because Internet gaming is already by some estimates, 

a $30 billion industry worldwide and it has been estimated that $6 to $7 billion of 

that come from gamblers residing within the United States. If it is legalized in this 

Country, it could very well be the next big thing in gaming and there is no reason 

why Indian tribes should be left out of this economic development opportunity. 

My testimony will focus on ‘‘what is at stake for tribes’’ and not on the Justice 

Department’s opinion concerning the scope of the Wire Act. I tend to agree with that 

opinion and leave to others the task of casting a critical eye on its reasoning. Instead, I want to focus my testimony on ‘‘what is at stake for tribes.’’

First, I want to emphasize why, if general legislation legalizing and regulating 

Internet gaming is enacted, the special issues and concerns facing Indian tribes 

should be addressed. 

Secondly, while I do believe that it might not be politically wise to amend IGRA 

in order to address the special problems facing tribal Internet gaming, I also believe 

that any legislation addressing such Internet gaming should respect the essential 

bargain that was struck in IGRA between the interests of the Tribes, the States, 

and the Federal Government. 

Finally, I will make some suggestions about how Internet Gaming should be regulated when it comes to Indian tribes. 

1. The Need to Specifically Address the Special Issues Facing Indian Tribes 

and Internet Gaming 

The major reason to specifically address the issues facing Indian Internet gaming 

is that without some specific legislation, Internet gaming would be controlled by the 

Indian Gaming Regulatory Act. IGRA divides gaming into three classes. Since Internet gaming is not included in either Class I or II gaming activities, it would automatically be included in Class III. Class III is regulated pursuant to Tribal State 

Compacts. Of course, a very good argument can be made that under current law, 

Internet gaming is authorized under some existing compacts. Under that argument, 

‘‘Internet’’ gaming would not be considered to be a ‘‘new form’’ of gaming under existing compacts. Under that view, if the compact allowed electronic blackjack for instance to be played in a tribal casino, that game would be automatically authorized 

as an Internet game. In the event that states or others may not agree with this position, perhaps any legislation legalizing Internet gaming generally should have a provision stating that any Internet game that is otherwise authorized as a non-Internet 

game in a tribal state compact would be deemed authorized under federal law. 

30

The major problem here is that while Internet gaming, if otherwise legal under 

federal law and within the state where the reservation is located, may be legal for 

some tribes under their tribal state compacts, it may not be an authorized form of 

gaming for many others. This would mean that for many tribes, Internet gaming 

would not be authorized unless they could persuade the states to amend their compacts. This would be an uphill battle and an unlikely scenario for many tribes because the Supreme Court in Seminole Tribe v. Florida struck down a key component 

of IGRA which allowed tribes to sue states in federal court if the states failed to 

negotiate a compact in good faith. As a result of this Supreme Court’s decision, 

IGRA no longer strikes the appropriate balance between tribal and state interests 

that Congress had worked so hard to achieve when the legislation was first enacted. 

Therefore, unless IGRA is amended to restore such appropriate balance between 

tribal and state interests, I do not believe that Internet gaming, if found not to be 

authorized under a compact, should be regulated as a Class III game or subject to 

a tribal state compact. 

Such a Seminole fix would be very simple to achieve but probably very complicated politically. The Congress would just have to declare that tribes could sue 

state officials who failed to negotiate in good faith under the doctrine of Ex Parte 

Young. It would be a simple and elegant solution that would not disturb the constitutional part of the Supreme Court decision. 

Even for those tribes where Internet gaming would be already legal, the problem 

is that IGRA is very land specific. It is based on a physical and geographical concept 

of sovereignty. This is why IGRA limits itself to gaming on ‘‘Indian lands’’ and contains a very specific definition of what are ‘‘Indian lands’’ for the purposes of IGRA. 

Thus some may make the argument that even if arguably authorized under a compact, Indian tribes should only be able to offer Internet gaming to people located 

on Indian land. Such a limitation would be ludicrous and incompatible with the very 

nature of the Internet. The Internet is not land based. It does not have geographical 

boundaries. It is to a great extent, borderless. Indian tribes should be able to handle 

wagering from any customer located in a state that allows Internet gaming. 

Many people think that archaic conceptions of land based sovereignty are ill 

adapted to regulation of the Internet. In any case, for the following reasons, Tribes 

should be able to extend their economic opportunities as sovereigns beyond the reservation borders. 

First, one has to look at the historical context behind the creation and location 

of Indian reservations. Indian tribes used to own the whole country, and at least 

initially were able to reserve substantial amount of lands for themselves in the early 

treaties. Later on, however, after first being removed to out of the way and distant 

places, many tribes saw their treaty land base reduced as a result of warfare, and 

unilateral abrogation by the United States. Finally, the tribes lost around 90 million 

acres through the allotment process, which also resulted in a large influx of nonIndians within the reservations. Indian reservations during the removal and later 

periods were never created with Indian economic development in mind. Quite the 

contrary, their location was selected, and their size reduced so that non-Indians 

could proceed with economic development on land previously owned by the tribes. 

Second, it has to be understood that, when it comes to economic development, Indian tribes are not just acting as businesses to make money for their shareholders 

when venturing beyond their reservations. They are in the process of raising governmental revenues because they do not have a tax base on the reservation. They lack 

such tax base because the Supreme Court has severely curtailed their power to tax 

non-members, while at the same time allowing state taxation of non-Indians, and 

Indian land held in fee, located within reservations. In addition, the tribes cannot 

tax land held in trust by the United States for individual tribal members. 

Third, the concept of territorial sovereignty, both in the United States and abroad, 

has been significantly eroded or modified, and there are no valid reasons why especially when it comes to economic development opportunities, tribal sovereign interests should be strictly limited to the reservation setting. The general concept of sovereignty has evolved from a concept focusing uniquely on territorial sovereignty to 

a more malleable concept recognizing the interrelationship between various sovereign actors. With the advent of the European Union, and the development of 

cyberspace, and the Internet, the very concept of sovereignty has evolved and is 

being challenged. Under traditional understanding of sovereignty, in order to be sovereign, a state had to have complete and exclusive control of everything within its 

borders. Under such concept, tribes and states such as Utah, could not be considered 

sovereign. Today, however, that concept of territorial sovereignty is on the decline, 

and scholars have recognized that there is more than one conceptual framework for 

defining sovereignty. In a world where everything is interconnected, largely because 

of the Internet, scholars have moved away from the traditional concepts of terriVerDate 0ct 09 2002 10:45 Nov 28, 2012 Jkt 075534 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 S:\DOCS\75534.TXT JACK
31

torial sovereignty, to a more malleable concept, that some scholars have called relational sovereignty. In Appendix B which is attached at the end of this statement, 

I further describe how the United States courts and the Congress have already recognized the validity of tribal sovereign interests beyond the reservation border. 

While I believe that because the Supreme Court invalidated parts of IGRA, IGRA 

no longer incorporates the balance between tribal-state and federal interest sought 

by Congress when it initially enacted that law, I do believe that any future legislation should uphold the initial compromise reached in IGRA. I now turn to what 

were the key provisions of this agreement. 

2. The Essence of the Bargain Reached in IGRA 

The dual purpose of IGRA was to recognize gaming as a legitimate activity for 

economic development on Indian reservations while at the same time ensuring that 

Indian gaming remained clean and legitimate by not coming under the influence of 

organized crime. However, the crucial aspect of the legislation was the recognition 

that the tribes, the states, and the Federal Government all had legitimate interests 

relating to gaming on Indian reservations. While the legislation recognized perhaps 

for the first time that states did have a role to play in the tribal-federal relation, 

it also recognized that tribes should be incorporated as sovereign governments into 

our ‘‘dual’’ system federalism. In other words tribes should be integrated as governments into what was before only a federal-state relationship. 

With this in mind, what are the essential aspects of IGRA that achieved those 

goals:

First, one cannot talk about IGRA without mentioning the Cabazon Supreme 

Court decision, the 25th anniversary of which we are celebrating this year. In 

Cabazon, the Court held that states did not have jurisdiction to regulate gaming 

on Indian reservations although they could prohibit it altogether if the prohibition was applied throughout the state. IGRA incorporated this part of the decision by mandating that states had to negotiate in good faith on any game that 

was otherwise authorized under state law.

Second, IGRA recognized that Tribes could be both operators and regulators of 

Indian gaming. The very first bill introduced to regulate gaming on Indian reservations was introduced by my former boss, Morris Udall. Under that initial 

bill, gaming on Indian reservations would have been legal if authorized by a 

tribal law and approved by the Secretary of the Interior. The tribal law had to 

meet certain key criteria. One such criteria was that Indian casinos had to be 

tribally owned. The reason for this was two-fold. First we were aware that 

many tribes lacked the essential tax base normally enjoyed by any other governments. Tribes, therefore, were badly in need of an additional source of governmental revenues. Secondly, we were also aware that many states had been successful in raising revenues through the operation of state owned lotteries. This 

indicated that governments, such as tribal governments, could be both gaming 

operators and regulators. That essential feature of the original Udall Bill was 

maintained in the final version of IGRA.

Third, maintaining a level playing field. The initial Udall Bill was forcefully 

criticized by many on Capitol Hill on the ground that Indians would gain an 

unfair advantage under such legislation. The operative words were that Indians 

had to be operating on a ‘‘level playing field’’ with the non-Indian gaming operators. Although initially those who opposed the original Udall bill were thinking 

of a level playing field between the tribal casinos and the privately owned nonIndian casinos, we on the Udall staff agreed to another type of level playing 

field and that was between the states as owners and regulators of gaming and 

Indian tribes as owners and regulators. In the end, it is this kind of level playing field that IGRA incorporated.

3. How Do You Best Maintain the Historic Compromise Reached in Igra as 

First Enacted 

1. Tribes should continue to be recognized as sovereign governments with the authority to regulate gaming occurring on the reservations.

2. Tribes should be able to conduct Internet gaming with customers located in any 

jurisdiction that allows Internet gaming even if these customers are not located in 

the state where the tribe is located.

3. Another part of the agreement reached in IGRA called for no state taxation of 

tribal gaming revenues. This too should be respected and extended to Internet gaming.

32

4. To the extent that Internet gaming is not already authorized under existing 

compacts, Internet gaming should not be treated as Class III but as a new type of 

gaming activity.

5. There is no reason why Internet gaming, if it is considered a new type of gaming, cannot be regulated jointly by the NIGC and the Indian tribes operating such 

Internet gaming.

A federal court once referred to IGRA as a prime example of ‘‘cooperative federalism.’’ The evolution of congressional legislation in Indian affairs (described in 

Appendix A) shows a move toward what has been referred to as cooperative federalism—instead of imposing federal laws, regulations, and programs on tribes directly, more recent legislation call on the Federal Government to negotiate compacts 

with the tribes or make federal funds contingent on tribal compliance with federal 

directives. The goal here should be both to define the role of the state in the federaltribal trust relationship and integrate the tribes into what was previously a dual 

federalism comprised of only the states and the Federal Government. The legislative 

model selected for tribal Internet gaming regulation should represent the best approach for establishing a system some may call cooperative tri-federalism. 

One option worth exploring would be for the NIGC and the tribes to follow the 

informal rule-making model set out in the Administrative Procedure Act, or more 

likely, in the Negotiated Rulemaking Act of 1990. Under the informal rule-making 

model, Congress would enact comprehensive legislation outlining general federal requirements and guidelines which would include protections of legitimate state interests. These federal requirements could be similar to the ones currently contained 

in IGRA. The Tribes would negotiate with the NIGC to create a gaming compact 

with the Federal Government. The legislation would provide for state interests to 

be represented during these negotiations. The negotiated compact would then be 

published as a proposed rule in the Federal Register. Interested parties, including 

the state and local interests, would then have another chance to comment on the 

proposed compact before it is issued as a final rule in the Code of Federal Regulations. This option would side-stepped the hurdles created by the Supreme Court decision in Seminole Tribe v. Florida and re-establish the balance between competing 

tribal, federal, and state interests that the original IGRA had sought to achieve. I 

also believe that, as shown in Appendix A, it would be consistent with the evolutionary trend in federal Indian legislation. 

Attachments

APPENDIX A: THE EVOLUTIONARY TREND IN FEDERAL INDIAN LEGISLATION

The purpose of this section is not to do a comprehensive in-depth analysis of all 

major congressional legislation affecting Indian affairs, but to analyze the evolution 

of such legislation, to discern the normative assumptions behind the different models, and to determine which model is best suited for the regulation of tribal Internet 

gaming and achieving what could be called cooperative tri-federalism: a version of 

federalism involving the Tribes, the Federal Government, and the States. 

Congressional legislation after the treaty period which ended in 1871 can be divided into four eras: The Allotment Era, the Indian Reorganization Era, the SelfDetermination Era, and the current period, which could be called the Self-Governance Era. 

The first model, the treaty model, was in effect for almost 100 years, much longer 

if one includes the pre-constitutional colonial period. This period of tribal-federal relationship was mostly defined by the various treaties and the federal role as a trustee was mostly limited to providing whatever was mandated under the various treaties. Even though the Indian nations acknowledged their ‘‘dependence’’ on the 

United States in many of those treaties, the assumption behind the treaties was 

that Indian nations were to remain separate and distinct sovereign political entities. 

Indians were not citizens of the United States and no federal laws, at least initially, 

extended to Indians within Indian country. The first law extending federal criminal 

jurisdiction over Indians committing crimes against non-Indians in Indian Country 

was enacted in 1817. 

Things changed drastically after 1871, the year Congress enacted legislation prohibiting the making of any further treaties with Indian tribes. During that period, 

known as the Allotment Era, the Court recognized state criminal jurisdiction over 

crimes committed by non-Indians against other non-Indians within Indian country, 

and the Court upheld the power of Congress to enact laws, such as the Major 

Crimes Act, specifically aimed at assuming political control over Indian tribes. 

During the Allotment Era, Congress was most interested in assuming control of 

tribal land and natural resources. The model legislation then was the leasing statVerDate 0ct 09 2002 10:45 Nov 28, 2012 Jkt 075534 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 S:\DOCS\75534.TXT JACK
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utes. These statutes reserved total control to the Federal Government. Some of the 

leasing acts did not even require tribal consent, and the Supreme Court upheld the 

power of Congress to delegate plenary authority to the Secretary of the Interior in 

the management of tribal natural resources. 

The next era came about with the Indian Reorganization Act of 1934 (IRA). The 

IRA’s major goal was to put an end to the allotment policy. The proto-typical statute 

of this era is the Indian Mineral Leasing Act (IMLA). Although tribes obtained more 

control over their resources, Professor Judith Royster has asserted that ‘‘tribes had 

more authority over resource development on paper than in practice.... [T]he 

Federal Government retained most of the practical decisionmaking about Indian 

natural resources development and use.’’

Except for a brief time when Congress embraced a termination policy, the next 

era, the Self-Determination Era, began in the 1970s. Besides the Indian Self-Determination and Education Assistance Act, perhaps the most important legislation enacted during this era was the Indian Child Welfare Act of 1978 (ICWA). Congress 

also enacted statutes to govern the development of natural resources during the 

Self-Determination Era, like the Indian Mineral Development Act of 1982 (IMDA). 

The IMDA allowed tribes to negotiate the terms of their mineral development and 

enter into new types of arrangements. 

The final generation of statutes is part of a new era which could be called the 

Tribal Self-Governance Era. An indicative progression from self-determination to 

self-governance has been the evolution of the Indian Self-Determination and Education Assistance Act, from an act only allowing tribes to assume the management 

of federal programs pursuant to a procurement contract type model, to a model 

based on tribal federal agreements, allowing each tribe to design its own program 

with its own funding priorities. In the natural resources area, a good example of 

the evolution from the previous model to the new one is the difference between the 

Indian Mineral Development Act of 1982 and the Indian Tribal Energy Development 

and Self-Determination Act of 2005 (ITEDSA). Under the ITEDSA, tribes can enter 

into Tribal Energy Resource Agreements (TERA’s) with the Secretary of the Interior. Once the agreement is approved by the Secretary, tribes can enter into leases 

or other agreements concerning development of natural resources with third parties 

without any additional federal approval requirements. 

The process provided for in the ITEDSA shares some similarities with the one 

adopted in the Tribal Self-Governance Act of 1994. Both acts provide for an initial 

foundational agreement between a tribe and a federal agency, after which federal 

controls are diminished and the tribe assumes primacy over the program. Peculiar 

to the ITEDSA, however, is that at the same time as the Federal Government releases its daily management and ultimate control over tribal natural resources, the 

Congress is also giving more of a voice to affected third parties. Thus, under the 

ITEDSA, the Secretary of the Interior has to request public comments on the final 

TERA proposal, and has to take such public comments into consideration when deciding whether to approve a TERA. Professor Royster has stated that ‘‘[m]any of the 

public input provisions of the ITEDSA... conflict sharply with tribal self-governance.’’ Other provisions in the Act require tribes to establish environmental review 

processes providing for public notice and comment, as well as providing consultation 

with state governments concerning any potential off-reservation impacts. There is 

also a provision allowing any interested party to petition for Secretarial review of 

the Tribe’s compliance with the TERA. 

While the Act does maintain the overall trust relationship between the Federal 

Government and the tribes, Professor Royster concluded that ‘‘[t]ribes can take advantage of new options and increased practical sovereignty, but in exchange the 

[federal] government has a deeply discounted trust responsibility.’’ For instance, 

while the Secretary has to ‘‘act in accordance with the trust responsibility... and 

in the best interests of the Indian tribes,’’ the Act also provides that ‘‘the United 

States shall not be liable to any party (including any Indian tribe) for any negotiated term of, or any loss resulting from the negotiated terms’’ of any agreement 

reached pursuant to an approved TERA. 

In some important aspects, both the Self Governance Act and ITEDSA follow the 

model adopted for the implementation of some of the federal environmental laws, 

a model which has been described as cooperative federalism. Starting in the mid 

1980s Congress did include Indian tribes in legislation such as the Clean Air Act, 

the Clean Water Act, and the Safe Drinking Water Act, and Congress provided that, 

for some of the sections and under certain conditions, tribes could be treated as 

states for the purposes of assuming primacy for the regulation of the environment 

within their reservations.

34

APPENDIX B: DOMESTIC LAW RECOGNITION OF TRIBAL SOVEREIGN INTERESTS BEYOND

THE RESERVATION

1. Treaties and Agreements With and Among Indian Tribes 

Treaties entered between the United States and various Indian tribes have been 

recognized as confirming hunting and fishing rights to tribes beyond their reservations borders. Such treaties have been held to immunize tribal members from some 

state regulations. In addition, tribes can enforce tribal regulations of treaty rights 

on their own members beyond the reservation. Such tribal regulations may even, 

in certain cases, preempt state regulations. Usually, however, because tribal treaty 

rights outside the reservation are said to be held ‘‘in common’’ with the citizens of 

the state, states have been given concurrent jurisdiction to regulate treaty hunting 

and fishing rights for the purpose of conservation. Such state regulations have to 

be reasonable and necessary, and cannot discriminate against Indians exercising 

their treaty rights. 

Although there may be some limitations derived from the Supreme Court’s statement that tribes have been divested of the power to ‘‘independently... determine 

their external relations,’’ tribes can and have entered into binding agreements and 

treaties with other tribes. In addition, tribes can and have entered into compacts 

with states which have recognized some form of tribal authority over tribal members 

or exemptions from state power beyond the reservation border. For instance, tribes 

in Michigan have entered into tax compacts with the state which recognize some 

tribal exemptions from state taxing authority in ‘‘agreement areas.’’ As stated by 

professor Matthew Fletcher, ‘‘[t]he ‘agreement area’ concept developed over the 

course of the negotiations in order to smooth over many of the difficulties created 

by the lack of a clearly designated Indian Country for most Michigan Indian Tribes.’’ 

Therefore, according to Professor Fletcher ‘‘[f]ew of the lines and boundaries affecting the [tax] exemptions contained in the agreement have any relationship whatsoever to reservation boundaries or Indian Country.’’

2. Legislation Recognizing Tribal (Sovereign?) Interests Beyond the

Reservation 

I put a question mark after the word sovereign because one of the issues here 

is whether this section should be written in terms of tribal sovereignty interests or 

something else: cultural, religious, or socio-political interests. Talking in terms of 

sovereignty often invites conflicts because sovereignty is connected with an assertion 

of power, often exclusive power. Framing the discussion about cultural or economic 

rights, on the other hand, seems less confrontational and more aimed at seeking accommodations. Whether described in term of sovereignty, cultural rights, or just economic rights, the United States Congress has enacted a substantial amount of legislation aimed at protecting such off-reservation tribal interests. 

Perhaps the most far reaching legislation recognizing tribal sovereign interests 

beyond the reservation borders is the Indian Child Welfare Act (ICWA) of 1978. In 

addition to mandating exclusive tribal court jurisdiction over certain child custody 

proceedings when the Indian child is domiciled on the reservation, the ICWA allows 

for concurrent tribal and state jurisdiction in such proceedings for Indian children 

residing off the reservation. Furthermore, the Act allows for transfer of cases from 

state to tribal courts in the absence of good cause or objections by either parent. 

As pointed out by Patrice Kunesh, one section of the ICWA recognized exclusive 

tribal court jurisdiction over non-reservation Indian children when these children 

are ‘‘wards’’ of the tribal court. Furthermore, professor Kunesh also demonstrated 

that even before the passage of ICWA, some courts had recognized exclusive tribal 

court jurisdiction in such off reservation child custody proceedings. Having stated 

that the unique tribal interest in its Indian children ‘‘coalesces with the essentiality 

of tribal governance in child welfare matters, to compose an uber-tribal interest that 

transcends territorially-defined jurisdictional limits,’’ professor Kunesh concluded 

that ‘‘[t]he welfare of Indian children lies at the heart of tribal sovereignty. Thus, 

there are no real boundaries to protecting these essential tribal relations . . . . ’’

Just as was done in the ICWA, Congress has also enacted federal legislation mandating that full faith and credit be given by federal and state courts to certain orders of tribal courts. Examples of such legislation are the Child Support Orders Act, 

the Violence Against Women Act, the Indian Land Consolidation Act, the National 

Indian Forest Management Act, the American Indian Agricultural Management Act, 

and arguably the Parental Kidnapping Act. These statutes are important to the 

issue being discussed here because their ultimate effect is to extend the sovereign 

actions of Indian tribes beyond the reservation borders. In addition, as professor 

Robert Clinton has argued, legislation providing for full faith and credit, rather than 

35

comity, more clearly ‘‘integrate’’ Indian tribal courts into Our Federalism on the 

same par with state and federal courts. 

Congress has also enacted amendments to federal environmental statutes such as 

the Clean Air Act, Clean Water Act, and the Safe Drinking Water Act, providing 

for treatment of tribes as states (TAS). Such treatment as states allows Indian 

tribes to extend the reach of their sovereignty beyond the reservation borders. As 

the Seventh Circuit stated in Wisconsin v. EPA, ‘‘once a tribe is given TAS status, 

it has the power to require upstream off-reservation dischargers, conducting activities that may be economically valuable to the state . . . to make sure that their 

activities do not result in contamination of the downstream on-reservation waters.’’ 

The Seventh Circuit also acknowledged that even though ‘‘this was a classic 

extraterritorial effect,’’ it was not prohibited by the Oliphant-Montana line of cases 

which implicitly divested tribes of the power to independently control their external 

relations. 

Perhaps the most important statute focusing on tribal cultural interests is the Native American Graves Protection Act of 1990 (NAGPRA). Once described as human 

rights legislation, NAGPRA not only provides for the repatriation of Native American human remains and cultural items in the possession of Federal agencies and 

museums to the tribes, but also gives certain protections to Native American graves 

and burial grounds located on tribal and federal lands. Under NAGPRA, if an Indian burial ground is discovered during excavation activities, the appropriate tribes 

have to be notified. Once a tribe is notified, however, it only has thirty days to decide how to remove, or otherwise make provisions for the disposal of, human remains and cultural items associated with the burial site. After the thirty day period, 

activities around the site may resume. 

Tribal interests in off-reservation sites were also recognized in the 1979 Archeological Resource Protection Act (ARPA) and the 1966 National Historic Preservation 

Act (NHPA). ARPA prohibits the removal and excavation of ‘‘archeological resources’’ from federal and Indian land without a permit. Under the Act, the appropriate Indian tribe has to be notified if the issuance of a permit could result in harm 

or destruction to any site, considered as having some cultural or religious importance to that tribe. Under the 1992 amendments to NHPA, federal agencies have 

to consult with the appropriate tribes if a federal undertaking is likely to affect a 

historic property of religious or cultural significance to that tribe. However, while 

consultation allows tribes to be involved in the process, it does not give them a right 

to veto any federal undertakings. 

3. Judicial Recognition 

One clear example where tribal immunity from state power has survived even 

outside the reservation is in the doctrine of tribal sovereign immunity from suit. 

Thus in Kiowa Tribe v. Manufacturing Technologies, the Supreme Court upheld the 

sovereign immunity of the tribe even though the tribe was being sued over commercial activities which had occurred off the reservation. The majority specifically refused the dissent’s invitation to limit the tribe’s sovereign immunity to non-commercial tribal affairs occurring on the reservation. 

The peculiar situation of Alaskan tribes provides a fertile ground to debate the 

extent of tribal sovereignty beyond the reservation borders. As a result of the Supreme Court decision in Alaska v. Native Village of Venetie, the Native Tribes in 

Alaska have been described as ‘‘sovereigns without territorial reach.’’ Yet in spite 

of Venetie, the Alaska Supreme Court, in John v. Baker, allowed a tribal court jurisdiction over a child custody dispute between tribal members, even in the absence 

of any Indian country falling under the jurisdiction of that tribe. After stating that 

‘‘[t]he federal decisions discussing the relationship between Indian country and tribal sovereignty indicate that the nature of tribal sovereignty stems from two intertwined sources: tribal membership and tribal land,’’ the Alaska Supreme Court held 

that Alaska Native villages have inherent, non-territorial sovereignty allowing them 

to resolve domestic disputes between their own members. Although the decision has 

been criticized, it is now almost ten years old and has not been modified. 

The Alaska Supreme Court relied on precedents such as Wheeler, Montana, 

Merrion, Fisher, and Iowa Mutual, to find that under United States Supreme Court 

jurisprudence, ‘‘The key inquiry . . . is not whether the tribe is located in Indian 

country, but rather whether the tribe needs jurisdiction over a given context to secure tribal self-governance.’’ Finally, relying on Kiowa Tribe of Oklahoma v. Manufacturing Technologies, the Alaskan Court concluded that ‘‘Decisions of the United 

States Supreme Court support the conclusion that Native American nations may 

possess the authority to govern themselves even when they do not occupy Indian 

country.’’

36

The CHAIRMAN. Thank you very much, Mr. Skibine. 

Mr. Washburn, you state in your testimony, ‘‘It is time for the 

United States to formulate a coherent approach toward Internet 

gaming.’’ Do you think that coherent approach should include a 

provision to allow Tribes the same access to enter the market as 

any other commercial entity? 

Mr. WASHBURN. Mr. Chairman, I do believe that. I do believe 

that Tribes should at least have an equal opportunity to engage in 

Internet gaming. Keep in mind that currently, Federal gaming, Indian gaming is the only Federal gaming, and all of those revenues 

go towards Indian Tribes. Every nickel of the only federally-authorized gaming goes towards Indian Tribes. 

So Tribes have become dependent on that revenue. So if we risk 

that revenue to Tribes by creating a different regime, we need to 

ensure that they are able to keep their revenues. And there are 

several different ways to get there, I think. They certainly should 

be allowed to participate, those Tribes that wish to participate in 

Internet gaming, on an equal and fair basis. 

Thank you for the question, Mr. Chairman. 

The CHAIRMAN. Mr. Rose, you described the DOJ opinion as an 

unexpected gift to the States. 

Mr. ROSE. Yes. 

The CHAIRMAN. That is a quote. Can you elaborate on which 

States you think would benefit most, and whether this gift would 

extend to Indian Tribes? 

Mr. ROSE. Thank you, Chairman Akaka. The gift was really unexpected, because the Department of Justice had been saying that 

the Wire Act covered all gambling and it covered even legal intraState gambling if a wire happened to go into another State and 

come back, which given the Internet and modern technology is the 

world. It is a gift because the States can use that to legalize Internet gambling, bring in hundreds of millions of dollars and create 

thousands of jobs. 

Your question which States, I actually have created a Power 

Point presentation, and I have found very few States that won’t be 

doing it. Utah won’t, Alabama might not. Literally there is only a 

handful of States. I practiced law in Hawaii for three and a half 

years, Hawaii might not but probably will join. Because every State 

is projecting a budget deficit, and they can’t have budget deficits. 

So they are going to start with the State lotteries, mostly traditional games, then go on to faster forms. They are going to be looking at Internet poker, which is viewed as being safer. But in some 

cases like New Jersey, it will be Internet casinos. And I think every 

State is very seriously looking at this, with only a couple exceptions. 

Will the Tribes benefit? I think the politics of this are, this is a 

State issue. There is so much legal gambling in this Country that 

the politicians who are desperate for money say, there is no big 

harm with legalizing one more form, like legalizing Internet poker. 

But there is so much legal gambling in this Country that we have 

established local operators. 

Where the money is the same, they will get the licenses. But in 

places like California, which have on the order of 110 federally-recognized Tribes, I think there are now currently 80 card clubs. They 

37

don’t have the big Nevada operators. The State wants to either give 

it to the State lottery to maximize its money or to sell licenses to 

people like Caesars-Entertainment. I expect a license will cost $100 

million cash up front, which the Tribes and the card clubs don’t 

have. 

But politically, the Tribes at least have enough power to say 

okay, if you are going to give three licenses, then at least one has 

to go to a Tribe or consortium of Tribes. But the rest of the Tribes 

are going to get cut out. And certainly the small Tribes that aren’t 

near population centers don’t have the political power, they usually 

don’t have a compact that will protect them. And they are going to 

get cut out. 

The CHAIRMAN. Thank you, Mr. Rose. 

Mr. Skibine, as I mentioned earlier, Indian gaming is currently 

the only federally-authorized and regulated gaming in the United 

States. Indian gaming currently makes up 40 percent of total gaming revenue in the U.S. market. Internet gaming could be seen as 

a threat to that exclusivity. 

Given your experience in writing IGRA, what do you think Federal legislation would need to contain to ensure that Tribal exclusivity is maintained in any expansion of gaming? 

Mr. SKIBINE. Thank you. As a matter of fact, I am looking at 

your chart, I can see that if Internet gaming was there worldwide, 

it probably would represent the biggest percentage of games. So it 

would be a threat, definitely. I think right now it is an estimated 

$7 billion comes from the United States, and it is another $30 billion worldwide. 

I think there are four essential points that any decision would 

have to address. Number one, Tribes should continue to be recognized as sovereign governments with the authority to regulate 

gaming occurring on their reservation. Number two, Tribes should 

be able to conduct Internet gaming with customers located in any 

jurisdiction that allows Internet gaming, even if those customers 

are not located in the State where the Tribe is located. 

Number three, another part of the agreement reached in IGRA 

called for no State taxation of Tribal gaming revenues. And that 

principle should be continued. And number four, to the extent that 

Internet gaming is not already authorized in existing compacts, I 

do not think that Tribes should have to negotiate or amend their 

compacts. Because they will not be able to do so, they are going to 

have a very hard time as a result of the Seminole Tribe decision. 

So there is no reason why new Internet gaming cannot be regulated jointly by the Tribe and the NIGC. I have suggested in my 

testimony a kind of an involved mechanism by which the NIGC 

could sit down with the Tribe and interested parties like the States 

and negotiate a type of informal rulemaking that would be in effect 

a compact. Thank you. 

The CHAIRMAN. Let me say that all of your entire statements will 

be placed in the record. 

Mr. Washburn, some see the DOJ opinion as opening the door for 

intra-State online gaming. In your opinion, would this create opportunities or be detrimental for Tribes? 

Mr. WASHBURN. Thank you, Mr. Chairman. I would say both. It 

is detrimental to Tribes in one respect. Many States have promised 

38

Tribes this exclusivity to engage in gaming. And if the State begins 

Internet gaming, intra-State Internet gaming, it will destroy that 

exclusivity, and Tribes won’t be responsible to pay most of these 

States the gaming revenue shares that they have promised. So I 

don’t know if that is a detriment or a benefit in some respects. But 

Tribes would presumably stop needing to pay those revenue shares. 

I think that Tribes have this situation now where they have exclusivity in some Tribal-State compacts and they have exclusivity 

from the Federal Government. Because they operate the only federally-authorized gaming. If they lose that exclusivity, they must be 

compensated for that. That is a very important principle. Because 

they have learned to rely on these gaming revenues. 

So I am not sure, I think the world is changing rapidly, and it 

is hard to see exactly whether the detriments will be greater or the 

benefits will be greater. But Congress must act to help ensure that 

Tribes get to remain in the same place with governmental resources. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Mr. Rose, you mentioned that since the DOJ opinion, there is no 

Federal law prohibiting a State from authorizing interstate online 

games and even entering into compacts with other States and nations. Where do you see Tribes fitting into this equation? 

Mr. ROSE. I think the problem for Tribes is they are not fitting 

in. They are left out unless the State voluntarily brings the Tribe 

in. In other words, if a State says, we are going to have three licenses and a Tribe gets one of those, just competing against 

Caesars and big other online operators. 

The UIGEA, the Unlawful Internet Gambling Enforcement Act, 

does say the Tribes can go interstate. But it is also clear the players have to be physically on Indian lands. So the main problem is 

that the Tribes simply haven’t been included in this, that the IGRA 

is very much land-based. It was designed, in fact, primarily for 

bingo more than anything else. And the Tribes can do a lot, but 

only on their land and on other Indian lands, unless the States 

agree or Congress acts. 

The CHAIRMAN. Thank you. 

Mr. Skibine, in your testimony, you mentioned the outcomes of 

the Cabazon decision, including the Indian Gaming Regulatory Act. 

Do you see the DOJ opinion as a precursor to Federal legislation? 

Mr. SKIBINE. I think it will be, because if you are going to have, 

if there is going to be Internet gaming, it is going to have to be 

regulated. And right now, I think the United States first adopted 

a position that Internet gaming was illegal. Now they seem to have 

changed their mind. I think if it is going to be legal, it will have 

to be regulated and it will have to be regulated by the Federal Government, because of the nature of the Internet. So yes. 

The CHAIRMAN. Well, I want to thank you very much for your responses. It is good to have your responses from these different 

areas, as well as your opinions on how it will impact the Tribes. 

And of course, all of this on the record will help us in looking forward to further legislation. 

So I want to thank you very much for being part of this hearing. 

I would like to invite the third panel to the witness table. Serving on our panel is Mr. Patrick Fleming, litigation support director 

39

of the Poker Players Alliance and Mr. Glenn Feldman, Attorney at 

Mariscal, Weeks, McIntyre & Friedlander. I want to welcome you 

to the table here in this hearing. 

Mr. Fleming, will you please proceed with your testimony? 

STATEMENT OF PATRICK W. FLEMING, LITIGATION SUPPORT 

DIRECTOR, POKER PLAYERS ALLIANCE 

Mr. FLEMING. Thank you very much and good afternoon, Chairman Akaka, members of the staff of this Committee. 

I consider it an honor to be asked to testify before you today. And 

I do hope that you will find my testimony useful. 

I come here today as an attorney. I am simply an attorney from 

Portsmouth, New Hampshire. But more importantly, I come before 

you today as the litigation support director for the Poker Players 

Alliance. 

For anybody not familiar with us, the Poker Players Alliance is 

a grassroots organization of American citizens. We have 1.2 million 

members dedicated to the great American game of poker, to advancing the game, to supporting the game and to protecting our 

ability to play the game. 

Our members come from all walks of life. They play the game for 

fun, they play the game for the spirit of competition and even a 

good number of our members play the game professionally. They 

play the game at home, they play the game on their computers, 

they play it in bars, they play it in charity-sponsored tournaments 

and they play it in casinos, including, important for this Committee, Tribal casinos. 

As I begin, Your Honor, I would like to reiterate what was said 

by the Chairman of the Poker Players Alliance, former Senator 

Alfonse D’Amato, when he testified before this Committee last November. The PPA, with respect to online poker, is committed to 

seeing a broad, cross-border market for online poker. We expect to 

see that with strong regulation, with maximum consumer protection and most importantly, for this Committee, a market that fosters as much competition as possible between game operators. And 

that absolutely includes the very important Tribal gaming operators to be very vital participants. 

The Committee asks essentially a legal question, but I think the 

legal question has already been answered and relatively explained. 

The short answer with respect to the DOJ opinion letter is that 

States are now free to do whatever they wish with respect to Internet gambling, except of course for sports betting. This opens up an 

entire Pandora’s box of possibilities, and most of those possibilities 

have been discussed already. 

But what I would like to do with my few remaining minutes is 

concentrate on the area that I think I bring some unique expertise 

to, and that area is poker. Poker, Mr. Chairman, is different. That 

is the single most important message I would like to get across to 

this Committee and to members of Congress. We talk about Internet gambling, but it is important to realize that there is Internet 

gambling and then there is Internet poker. The two are not exactly 

the same. The nature of the games are different. Poker is different 

Poker is different in three important aspects. Those differences 

lead to an important different conclusion. Poker is a social game, 

40

poker is a game played between people, and poker is a game of 

skill that requires active participation and competition among the 

players. This leads me to conclude that Internet poker is not a 

threat to Tribal gaming interests. 

One important factor we have noted and is noted in my written 

testimony is that poker itself only represents 1 percent of Tribal 

gaming revenue. It brings people to Tribal gaming casinos because 

of its popularity. But it is not the game that supports their existence or helps benefit their operations. It benefits them by virtue of 

bringing people there, and providing, in that social connectivity 

that keeps customers coming back. 

So it is clear that at the very least, Internet poker is not a threat 

to Tribal operations. 

But I also believe that Internet poker can actually be a benefit 

to Tribal operations. Whereas things like State-run lotteries that 

may choose to, as Professor Rose said, have instant scratch-off tickets online, which would effectively been an online slot machine, one 

can easily see how that would directly compete with Indian gaming 

operations. But with respect to Internet poker, there is actually a 

symbiotic relationship between those who play poker online and 

those who play poker live. 

Years ago, there were hardly any organized poker rooms in Las 

Vegas or Atlantic City. But then the online poker boom happened, 

and a new generation of Americans discovered this great traditional American game and learned to play it and learned to enjoy 

it. 

But what they did, unlike what players of the other traditional 

casino games do, is they then took that online experience and 

brought it to the casino, to the card rooms, to the Tribal reservations, because they wanted to be in a social environment where 

they could play that game. 

I see I am running out of time, Mr. Chairman, and I am happy 

to take any questions the Committee has. But that is my bottom 

line. When we look at this and we look at protecting Tribal interests in the future world of Internet gaming, what I think is very 

important and certainly most important to the members of my organization is that we realize that Internet poker functions differently from Internet slot machines, Internet roulette and other 

traditional casino games, and presents not, in my opinion, a threat 

to the Tribes, but actually an opportunity. They too can use poker 

to bring people into their land-based casinos and support their operations. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Fleming follows:]

PREPARED STATEMENT OF PATRICK W. FLEMING, LITIGATION SUPPORT DIRECTOR, POKER PLAYERS ALLIANCE

Chairman Akaka and Members of the Committee, I am pleased to have this opportunity to testify before you today. I come here as an attorney and, more specifically, in my role as Litigation Support Director for the Poker Players Alliance (PPA), 

an organization of 1.2 million Americans who like to play a great American game 

of poker in both commercial and Tribal casinos, in their homes, in bars, in charitable games and on the Internet. They do so for recreation, for camaraderie, for intellectual challenge and stimulation, and some of them do it for a living. 

To introduce myself briefly, I am an attorney from Portsmouth, New Hampshire 

and have been a member of the bar in New Hampshire since 1985. The primary 

41

1http://www.Internetnews.com/busnews/article.php/3632206/

North+Dakota+a+Gambling+Haven.htm

focus of my legal practice has been criminal defense and that has always included 

a good familiarity with gambling law. I have also been a lover of competitive games 

since childhood, and I consider poker to be the quintessential competitive game of 

skill. I joined the PPA in 2007 and, through a process of recommendation and effort, 

helped create the PPA’s Litigation Support Network in order to assist poker players 

with the many legal questions that surround their ability to play their favorite 

game. In 2008, I was named Director of the Network and since then have devoted 

significant time and effort, with the help of many other poker-playing lawyers, to 

fully understanding the nature and details of the Federal gambling laws and the 

gambling laws of the 50 States. It is my hope today that I can use some of that 

knowledge and experience to assist this Committee. 

Let me begin by reiterating something that PPA’s Chairman, former Senator 

Alfonse D’Amato said in this Committee’s previous hearing on Internet gaming: the 

PPA supports a robust, competitive, regulated interstate market in which Tribal 

gaming interests are vital players. 

Today, as I understand it, the Committee seeks to determine the ways in which 

the recent change in policy by the U.S. Department of Justice (DOJ) regarding the 

scope of the Wire Act may affect the future of Tribal gaming. The short answer is 

that this change in policy is likely to have far-reaching effects, few of which are certain at this time, but the many of which may place Tribal Gaming operators at significant disadvantages with respect to other gaming operators. The bottom line is 

that if Tribal gaming is going to continue to be a competitive operator in the gaming 

industry, it will most likely need the assistance of this Congress through the passage of new legislation in order to meet the future challenges. 

In order to understand the basis for this conclusion, a brief outline of existing 

Federal and State law is in order. 

There are eight Federal laws which concern gambling and gaming (I use both 

words because which games when played for money constitute gambling games is 

not consistent across the law): The Wire Act (18 U.S.C. § 1084), the Interstate 

Horseracing Act (IHA, 15 U.S.C. § 3002), the Professional and Amateur Sports Protection Act (PASPA, 28 U.S.C. § 3701), the Indian Gaming Regulatory Act (IGRA, 

27 U.S.C. § 2701), The Travel Act (18 U.S.C. § 1952), the Illegal Gambling Business 

Act (18 U.S.C. § 1955), the Unlawful Internet Gambling Enforcement Act (UIGEA, 

31 U.S.C. § § 5361–5367), and the Lottery Acts (18 U.S.C. § § 1301–1304 ). 

Without going into too much detail regarding each, PASPA is not germane to the 

discussion as it is essentially a prohibition against additional States allowing sports 

betting. The IHA also need not be discussed at length as it merely codifies a mechanism for remote wagering on horse racing and to the best of my knowledge there 

are no Tribal racing operations. And the Lottery Acts are clearly limited to physical 

transactions involving lottery tickets. 

The Travel Act, the IGBA, and the UIGEA all create Federal criminal offenses 

for certain gambling activity, live or online. But none of these three laws independently identifies an act as an offense. Instead, each of these statutes require that any 

prosecution commenced pursuant to the statute also include, as an element of the 

offense, that the defendant has violated some other substantive gambling law. 

Under the UIGEA, it may be a Federal or State substantive gambling law; under 

the Travel Act and the IGBA, it must be a State substantive gambling law. 

Thus the only Federal statute which independently creates a substantive Federal 

gambling offense, and therefore can act as an independent Federal prohibition on 

conduct, is the Wire Act. 

Prior to December 23, 2011, there was a live dispute regarding the reach of the 

Wire Act’s prohibition. Most legal scholars and two Federal courts (In re

MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002)) interpreted the Wire Act to only 

be applicable to gambling that involved wagering on the outcomes of sporting events 

and sporting contests. The DOJ, however, consistently maintained that the Wire Act 

applied to all wagering activity otherwise conducted in the manner proscribed by 

the statute. Throughout the first 10 years of this century, the DOJ had asserted its 

position not only in the courts (U.S. v. Lombardo, 639 F. Supp. 2d 1271 (D. Utah 

2007); but also, according to numerous press reports, when providing information 

to various State legislatures. In numerous reported instances, beginning with North 

Dakota in 2005 1 the DOJ was said to have informed State legislatures that State 

laws, which would have allowed non-sports wagering over the Internet, would violate the Wire Act and would therefore be pre-empted by Federal law. 

Thus prior to 2011, no State acted to specifically allow and implement gambling 

or gaming activity over the Internet (other than, of course, wagering on horse racing 

42

pursuant to the IHA). Indeed, Nevada and the Virgin Islands had actually passed 

laws intending to allow Internet wagering, but neither fully implemented those laws 

in light of the Federal opposition. 

In June of 2011, Nevada once again passed a law, Assembly Bill 258, allowing 

and implementing Internet wagering, though limited only to the game of poker. Yet 

even then, that Nevada law was subject to an explicit limitation that no actual operation would commence until it was deemed clearly legal under Federal law. 

Also in 2011, the Lottery Commissions of two States, New York and Illinois, 

sought guidance from the DOJ on the issue of using the Internet as a means of selling lottery tickets within State borders. Another inquest was made by Senators Kyl 

and Reid, seeking a broad clarification of the Wire Act’s parameters. 

And on December 23, 2011, the DOJ responded to these inquiries. The letters 

publicly issued on that date not only answered questions, they announced a complete change in position. After reviewing its prior stance and acknowledging its previous insistence to the contrary, the new DOJ position is that the Wire Act, after 

all, really does only apply to gambling that is in the nature of wagering on sporting 

events. And although the DOJ opinion is not a court ruling with precedent-setting 

impact, if a prosecuting authority announces it believes certain conduct is not proscribed by a statute, one ought to at least expect that the same authority will not 

bring prosecutions based on that conduct. 

Thus with that communication, the DOJ removed the sole Federal barrier that 

it had for years argued was a complete bar to Internet wagering activity in the 

United States. 

As a direct result, for any gambling, gaming or wagering activity conducted on 

the Internet to be currently illegal, it must be illegal under a valid State law. 

Currently only nine States (Illinois, Indiana, Louisiana, Montana, Nevada, Oregon, South Dakota, Washington and Wisconsin) have statutes which expressly address wagering activity on the Internet (other than horse racing). In each of those 

States except Nevada, conducting as a business any wagering activity over the 

Internet is either expressly illegal or illegal except for horse race wagering. Nevada’s recently passed law expressly allows for the game of poker to be conducted 

over the Internet by operators licensed in the State of Nevada. That Nevada law 

also allows its licensed operators to offer Internet poker to people located in other 

jurisdictions provided the law of the other jurisdiction does not make such activity 

illegal. 

It should also be noted that New Jersey is seriously considering a law similar to 

Nevada’s and that the New Jersey legislation is not limited to poker, but would also 

allow all the other casino games such as slot machines and blackjack to be offered 

in an online version. 

It is impossible to state for certain what the law is for the 41 States that have 

no express provision regarding Internet wagering. All the statutes in these other 

States predate the Internet, often by decades, and sometimes by centuries. A lawyer 

or court seeking an answer regarding Internet wagering’s legality must take the existing statute and try and apply it to this new situation. In some cases this may 

be easier than in others. For example, it would not be surprising to see a court rule 

that Maryland’s statute (§ 12–102), which simply states that ‘‘A person may not: (1) 

bet, wager, or gamble’’, applies to all methods of wagering including those conducted 

over the Internet. On the other hand, it is extremely difficult to infer legislative intent regarding Internet wagering when faced with a statute such as South Carolina’s § 16–19–40: ‘‘Unlawful games and betting. If any person shall play at any tavern, inn, store for the retailing of spirituous liquors or in any house used as a place 

of gaming, barn, kitchen, stable or other outhouse, street, highway, open wood, race 

field or open place at (a) any game with cards or dice . . . .’’

Another aspect of State law is that States define gambling and wagering in a 

number of different ways. For example, the game of poker is a ‘‘lottery’’ according 

to the Kansas Supreme Court (State ex rel. Stephan v. Finney, 867 P.2d 1034 

(1994)), but its neighbor, the Missouri Supreme Court, has specifically declared the 

opposite (Harris v. Missouri Gaming Comm’n, 869 S.W.2d 58, 62 (Mo. 1994)). Similarly, different State courts may make different determinations even when using the 

same legal definitions. In most States, a game played for money is ‘‘gambling’’ if the 

outcome of the game is predominantly determined by chance rather than the skill 

of the players. The PPA, not surprisingly, considers poker to be a game where skill 

predominates, but not all agree. Indeed, many games, such as backgammon, scrabble and poker, are games where the elements of chance and skill are significantly 

intertwined. It is very easy to see a future where scrabble and poker (played for 

money) are legal in State A, only scrabble in State B, and neither in State C. 

The bottom line is that, with a few exceptions, current State law does not lend 

itself to easy answers when one poses a question regarding the legality of a specific 

43

Internet gaming activity. Usually the best that can be said is that the activity is 

clearly illegal in some States and maybe or maybe not illegal in others. It will be 

very interesting to see who, if anyone, will attempt to take advantage of these issues 

in current State law now that the Wire Act is limited to wagering on sporting 

events. 

But far more important to the question at hand is the obvious fact that States 

can change their laws. And with the lack of any national Federal guideline other 

than the Wire Act’s now limited prohibition on sports wagering, what that future 

State legislation may look like is limited only by imagination, and, possibly, the US 

Constitution’s Commerce Clause, specifically the ‘‘dormant commerce clause’’ principle. 

Regarding what can be imagined, there are already some real examples: Nevada’s 

passage of online poker legislation and New Jersey’s contemplation of passing legislation allowing all casino games to be conducted online. Other proposals have been 

made and are being considered in State legislatures throughout the country. Among 

the many proposals, all vary as to what specific games will be allowed, the circumstances under which they will be allowed, and as to what entity or entities will 

get to operate the online games. 

Trying to list all the various possible legal online gaming schemes States may 

choose from is a herculean task, but thankfully not necessary to address this committee’s concerns. There are really only two questions that matter with respect to 

future State online gambling laws and Tribal gaming interests. Those are, what 

games will be allowed and will Tribal gaming operations be able to compete in the 

offering of those games. 

With respect to which games will States choose to authorize, the basic distinction 

is already provided in law and practice. The IGRA already distinguishes between 

Class 2 games (bingo and card games where the players compete against each other 

such as poker) and Class 3 games (all other gambling games including traditional 

casino games like slot machines, blackjack, and roulette). Similarly, the distinction 

most often discussed among State legislatures is between allowing online poker 

alone (as in Nevada) or allowing all casino games online (as contemplated by New 

Jersey). 

With respect to allowing operators there is again a dichotomy, this time between 

open markets and closed markets. Nevada’s new law is an open market, allowing 

anyone to operate an online poker site so long as they are able to obtain a license. 

But many State lottery operators are suggesting that a closed market be created 

along the same design as that of the State lotteries: one State operator. And at least 

one State, California, has considered adopting a monopoly model that would allow 

only a set number of licensed operators. 

With these distinctions in mind, it is then possible to chart the ramifications on 

Tribal gaming of the various possible new State online gambling laws. 

First, it is clear that there will be far less impact on Tribal gaming operators if 

new State gambling laws are limited to games such as poker (and any other card 

game meeting IGRA’s ‘‘Class 2’’ definition). According to the 2010 Spectrum Study 

prepared for the National Indian Gaming Association, Tribal poker operations account for only 1 percent of Tribal gaming revenue and thus any change in this market is not likely to have profound effects on Tribal gaming operations. 

Additionally, all the preliminary evidence strongly suggests that there is a 

healthy relationship between online poker and live poker. Poker is, at its core, a social game of person against person. Hence poker players as a general rule enjoy both 

settings and use one to compliment the other. While there are some poker players 

who prefer live games and some who prefer online games, the majority play both 

with equal enthusiasm. Since online poker can be offered at stakes far below the 

minimum needed to make a profit from live games, most poker players use the online game as means of quick entertainment and/or practice. Then, when looking for 

a long evening’s entertainment or after having accumulated enough winnings and 

experience to try higher stakes, they go to a live game. 

With respect to other casino games, the opposite of the first point is clear and the 

opposite of the second point is highly likely. Slot machines and table games account 

for the majority of Tribal gaming revenue, so anything that will affect these games 

may have significant effect. 

And it seems, again from preliminary study, that those who play games ‘‘against 

the house’’ do not really care that much about the nature of their ‘‘house’’ opponents. 

While some may still see the casino as a special place to go, most simply want to 

play the games and may well see the ease of play at home as a good reason not 

to go elsewhere to play the same game. 

One final point should also be made with respect to the distinction between Class 

2 social games and Class 3 casino games. It is well known that Class 2 gaming on 

44

the Internet requires a larger body of available players to satisfy customer demands 

and thus be a profitable operation; the need for active opponents to run the game 

dictates the need for a large player pool from which an active player pool can be 

guaranteed to always be present. States with small populations, and so Tribal gaming interests in those same States, will therefore need to arrange for cross-border 

Class 2 games. There is nothing in current Federal law to currently prevent this 

from happening, but there is also no framework in which to make it happen. It remains to be seen whether smaller States interested in allowing Class 2 games will 

be able to come to terms with each other on issues such as regulation, consumer 

protection and taxation and so allow cross-border games. It is equally speculative 

as to whether these States will decide to include Tribal interests in such interstate 

compacts. 

Regarding the question of being allowed to participate in the market, at first 

glance it would appear Tribal gaming must be allowed into the market under the 

provisions of the IGRA. Those provisions, however, may well be outdated in the 

Internet age. Section 2710 of the IGRA guarantees the Tribes the right to offer 

games as they are allowed by the State in which the Tribal lands are located. Unfortunately, the specific wording of that section only allows the Tribes to offer those 

games ‘‘on Tribal land.’’ And ‘‘Tribal land’’ is specifically defined in 27 U.S.C. 2703.4 

as the confines of the reservation or similarly owned and governed land. 

Although the current status of Federal law is still emerging in this area, the cases 

that have tackled the issue so far would suggest that a Tribal online gaming operation that allowed players to access the site from outside the reservation would be 

found to be operating, at least partially, other than ‘‘on Tribal land.’’ Although a 

very different context, when offshore sports betting operator Jay Cohen was arrested for violating the Wire Act by accepting sports bets from New York made 

through the Internet to his business in Aruba, he made the argument in court that 

the betting took place in Aruba and so there was no jurisdiction for the U.S. to prosecute him. Both the trial court and the 2nd Circuit Court of Appeals disagreed (U.S. 

v. Cohen, 260 F.3d 68, 76 (2nd Cir. 2001)). This would strongly suggest that a Tribal 

online gaming operation which accepts play from people not on Indian land is not 

operating ‘‘on Indian land’’ just because that is where the games are run. 

There thus seems the real possibility that despite its stated purposes and intentions, the IGRA does not, as currently written, guarantee the Tribes the same online 

gaming rights as the States now have. In short, the likely result of the DOJ’s new 

position on the Wire Act will be this: each jurisdiction will determine who, if anyone, can take play from individuals located in that jurisdiction. If Tribal gaming enterprises in that jurisdiction wanted to take Internet bets from people on Indian 

land, they would be entitled to do so per the IGRA. But if those same Tribal gaming 

enterprises wanted to take Internet bets from people outside their reservations, they 

would have to seek licenses and/or other direct permission from the States in which 

those players are located. 

Additionally, many States are discussing allowing their State lottery operations 

to also conduct games on the Internet. A law allowing this was passed right here 

in Washington, D.C., but was also recently repealed. The majority of these proposals 

envision the lottery having a monopoly on other Internet games similar to the current monopoly they have with respect to lotteries. This sort of law seems especially 

dangerous for Tribal gaming operations, especially when one considers the possibility of instant lotteries or the online equivalent of lottery scratch tickets. An Internet version of either of these games, while technically not a ‘‘slot machine’’ game, 

would nonetheless, be virtually indistinguishable from an online slot and so, as 

noted before, would compete directly with the main revenue generator for Tribal 

gaming. 

Lastly on this point, some States are considering a closed in-State gaming market 

with participation being limited to a few specific operators. In some cases, the limited operators may include Tribal gaming operators. At first blush this may seem 

protective of Tribal interests, but it also may be a false protection. The Commerce 

Clause of the U.S. Constitution (Article I, Section 8, Clause 3) has been interpreted 

to require that unless Congress specifies otherwise (and it has not in this situation), 

State law may not unfairly discriminate against out-of-State commerce. See, e.g., 

United States v. Lopez, 514 U.S. 549 (1995) (’’. . . the Court’s Commerce Clause decisions dealt... almost entirely with the Commerce Clause as a limit on State 

legislation that discriminated against interstate commerce.’’). It is therefore a reasonable proposition that once a State allows a form of Internet gambling to be conducted within its borders by private entities, it cannot then prevent out of State interests from seeking to participate in that same form of commercial activity. Some 

have suggested that a State’s traditional police power over gambling may give 

States extra rights in this context, but there is as yet no case law to support this 

45

argument. At best, it would appear that while States maintain the right to either 

allow or prohibit gambling within its borders, once it chooses to allow such activity, 

it cannot significantly discriminate against out-of-State interests in favor of in-State 

interests. Illustrative of this point is the case of Rousso v. Washington (239 P.3d 

1084 (2010)) in which the Washington Supreme Court rejected a Dormant Commerce Clause argument that sought to overturn Washington’s ban on Internet gambling. That Court accepted that the Dormant Commerce Clause applied to the situation, but rejected the argument based on the finding that Internet gambling and live 

gambling (which Washington allows) were different areas of commerce and both inState and out-of-State interests where equally barred from the Internet market. 

Accordingly, while it may seem tempting to establish an intrastate monopoly as 

a way to protect in-State interests (perhaps including Tribal interests), given the 

undeniable interstate nature of the Internet, that protection may be just as fleeting 

as the attempt by New York to grant a steamboat monopoly to Robert Fulton on 

New York waterways (Gibbons v. Ogden, 22 U.S. 1 (1824)). 

Finally, there is the question of the practical ability of Tribal gaming interests 

to compete with the larger and more broadly established corporate gaming interests. 

I am far from an expert in this field, but it appears to be common sense that at 

least the smaller, less capitalized Tribal gaming operators would have significant 

disadvantages when trying to compete nationally, or even in-State, with well-financed commercial casino operations. There are, however, ways to participate in 

certain online gaming markets that do not require direct competition, but instead 

foster cooperation that benefits all. 

I have remarked above on the fact that players of Class 2 social games are more 

likely to use Internet play as a means to supplement and support live play than 

players of Class 3 house-banked games. This aspect of social games supports the 

prospect of direct interaction between live game operators and Internet game operators. It is a well-known fact that social games are not a major source of casino or 

Tribal gaming revenue and that higher profits are made from the house-banked 

games. But social games have the additional effect of bringing people into a casino 

who otherwise would not visit. And, of course, it is well-known in the gaming industry that getting customers through the door is the key to a successful operation. In 

this context, it is easy to see a correlation between online social gaming operations 

and local live operations. A website for online poker linked to a local venue is likely 

to generate additional live business for the local venue, both through increased interest in the game and through the offering of promotions redeemable at the local 

venue. With respect to social games such as poker, the efficacy of ‘‘affiliates’’ as marketing portals is well established. Affiliates are simple websites through which a 

player is connected to the larger website that actually provides the games. Typically 

affiliates earn a percentage of the money earned from the player who participates 

through them and, probably more importantly, the affiliate establishes the personal 

relationship with the player. So at least with respect to social games, the ability of 

small regional operations to participate and benefit as affiliates to larger operations 

is clearly established. Indeed, Tribal interests may well have an advantage in setting up these kinds of affiliate relationships as they are typically located in areas 

otherwise without alternative live venues. A poker player in Arizona may well prefer that his status as a customer is rewarded by promotions available at his local 

tribal casino rather than the casino in Las Vegas that he may only visit once or 

twice a year. 

In conclusion, the basic answer to the Committee’s question is clear: the DOJ’s 

new position that the Wire Act does not apply to gaming other than wagering on 

sporting events will have large and significant ramifications for Tribal gaming interests. Depending on future developments in State laws, those ramifications will 

present Tribal gaming operators with significant competition issues that current law 

leaves them woefully unprepared to meet. The actual effects will depend upon the 

decisions made by the various States with respect to future laws regarding Internet 

gambling and on whether the Federal government acts to establish a new national 

policy with respect to Internet gambling. 

For Tribal gaming interests specifically, I believe there are three essential issues 

that must be addressed: (1) whether the IGRA must be updated to clearly allow 

Tribal interests the same gaming rights on the Internet as States allow themselves 

or private companies, (2) whether it would better protect Tribal interests by adoption of new Federal legislation that allows only Class 2 social games like poker to 

be conducted over the Internet, and (3) whether Tribal interests should also be protected by Federal legislation that ensures unfettered interstate competition, but in 

a manner that directly allows and supports participation by local interests. 

I thank you, and am available for any questions.

46

The CHAIRMAN. Thank you very much, Mr. Fleming. 

Mr. Feldman, will you please proceed with your testimony? 

STATEMENT OF GLENN M. FELDMAN, ATTORNEY, MARISCAL, 

WEEKS, MCINTYRE & FRIEDLANDER, P.A., PHOENIX, ARIZONA 

Mr. FELDMAN. Chairman Akaka, I appreciate the opportunity to 

testify here today on this important issue. 

By way of background, I am a lawyer in private practice in Phoenix, Arizona, with the law firm of Mariscal Weeks. For more than 

30 years, my practice has been devoted exclusively to Federal Indian law, representing Tribes and Tribal entities around the Country. 

Among other things, I have served as outside general counsel to 

the Cabazon Band of Mission Indians since 1979. And it was my 

great good fortune to argue and win the case of California v. 

Cabazon Band, the so-called Cabazon Case, before the U.S. Supreme Court. 

Since that time, I have been actively involved in negotiating 

Tribal-State compacts for Tribes in a number of States, as well as 

litigating a variety of other Indian gaming issues. 

Now, I am not here as an advocate for or against Federal legislation in the area of Internet gaming. Rather, what I hope to do is 

to provide you with some thoughts, based on my own personal experience in dealing with Indian gaming for more than 30 years, on 

how this Committee might want to proceed as it considers this important issue. 

Let me say at the outset: I believe that lawful Internet gaming 

in the United States is inevitable. And so the advice that I give all 

of my Tribal clients is the same, just saying no is not an effective 

strategy for dealing with inevitable change. In my view, Tribes 

need to be at the table, need to be active participants in the developments of legislation and need to be flexible and smart in their 

thinking in order to be sure that they share in the benefits and 

avoid the problems that Internet gaming may bring. 

Part of my message here today, however, is that there is no need 

to rush to enact Federal Internet gaming legislation. I do not necessarily share the views of those who suggest that the recent Justice Department opinion is immediately going to open the floodgates to unlicensed and unregulated Internet gaming in the United 

States. While such gaming may not be prohibited by the Federal 

Wire Act under the Justice Department’s opinion, there are certainly existing proscriptions under the Unlawful Internet Gaming 

Enforcement Act, the Unlawful Gaming Business Act, RICO and 

other Federal civil and criminal forfeiture statutes. 

As a result, I think Congress would make a serious mistake if 

it were to rush into enacting Federal legislation without the careful, deliberate process the subject deserves. In this connection, I 

think there are some useful parallels to be drawn between where 

Congress finds itself today with Internet gaming and where Congress was in the late 1980s when it was considering Indian gaming 

legislation after the Cabazon decision. Both situations presented a 

complex and controversial mix of Federal, Tribal, State and commercial interests. And both Tribal gaming then and Internet gamVerDate 0ct 09 2002 10:45 Nov 28, 2012 Jkt 075534 PO 00000 Frm 00050 Fmt 6633 Sfmt 6601 S:\DOCS\75534.TXT JACK
47

ing now are likely to have important economic and societal consequences. 

But despite these facts, Congress did not rush to enact Indian 

gaming legislation in the 1980s. Twenty months elapsed between 

the time of the Cabazon decision and the date that the Congress 

passed the Indian Gaming Regulatory Act of 1988. And what must 

also be kept in mind, though, is that Congress had actually been 

considering Indian gaming legislation three years before the 

Cabazon decision came down. 

So at the time IGRA was enacted and signed into law by President Reagan in 1988, Congress had devoted more than four full 

years to that legislation process. 

Now, I am not suggesting that Congress needs to study this issue 

to death. But at the same time, I don’t want to minimize the difficulty or the complexity of the negotiations that resulted in the 

final version of the Indian Gaming Regulatory Act. As Professor 

Skibine recalls, all of us who were involved in that process left a 

lot of blood, sweat and tears on the floors of many meeting rooms 

over a long period of time. But in the end, that long, deliberative 

process worked and produced a legislative framework that despite 

its flaws has proven to be a pretty good compromise that is now 

pumping more than $25 billion annually into Indian Country. 

And I think the situation today involving Internet gaming represents the same kind of situation and the same kind of challenge. 

We don’t need to rush. Certainly, Congress has a role to play in 

this. But I think rushing to enact fast legislation is not the best 

solution. Taking the time to enact good legislation ought to really 

be the goal. 

So let me make my final point here. That is, Indian Tribal governments need to be full and active participants in all processes by 

which Federal Internet gaming legislation is developed. And Tribes 

are entitled to have the full right to develop, use and benefit from 

Internet gaming to the extent they wish to do so. Legislation that 

limits or restricts the ability of Tribal governments to reap the benefits of Indian gaming is simply unacceptable. 

Internet gaming today, like Indian gaming 25 years ago, is complicated and controversial. But it is coming. So Tribal governments 

need to be smart and flexible in their thinking on the issue and 

Congress needs to recognize that Tribes must have a seat at the 

table where those decisions are going to be made. 

That concludes my testimony. I would be happy to answer any 

questions. 

[The prepared statement of Mr. Feldman follows:]

PREPARED STATEMENT OF GLENN M. FELDMAN, MARISCAL, WEEKS, MCINTYRE & 

FRIEDLANDER, P.A. 

Mr. Chairman and members of the Committee: 

I appreciate the opportunity to testify here today on this important issue. By way 

of background, I am a lawyer in private practice in Phoenix, Arizona. For more than 

30 years, my practice has been devoted exclusively to federal Indian law, representing tribes and tribal entities around the country. Among other things, I have 

served as outside General Counsel to the Cabazon Band of Mission Indians since 

1979, and it was my great good fortune to argue—and win—California v. Cabazon 

Band (the so-called ‘‘Cabazon case’’) before the U.S. Supreme Court in 1987. Since 

that time, I have been actively involved in negotiating tribal-state gaming compacts 

48

for tribes in a number of states as well as litigating a variety of other Indian gaming 

Issues. A more complete biography is attached to this testimony. 

Let me begin by saying that I am not here as any sort of self-appointed spokesman for Indian Country. Given the complexity of the Internet gaming issue and the 

wide divergence of opinion among tribes on the subject (including among my own 

tribal clients), I’m not sure that anyone can—or should—try to perform that role. 

Nor am I here as an advocate for or against federal legislation in the area of 

Internet gaming. Rather, what I hope to do is provide the Committee with some 

thoughts on how it, and Congress as a whole, might want to proceed as it considers 

this difficult issue. 

Let me say at the outset that I believe that lawful Internet gaming in the United 

States is inevitable. I don’t see how anyone can look at the technological advances 

of recent years and not understand that the Internet is going to become an important component of the gaming industry in the future. The only real questions are 

how and when. And so, the advice that I give all my tribal clients is the same: just 

saying ‘‘no’’ is not an effective strategy for dealing with inevitable change. In my 

view, tribes need to be at the table; need to be active participants in the development of the legislation and the systems; and need to be flexible and smart in their 

thinking in order to be sure that they share in the benefits and avoid the problems 

that Internet gaming will bring. 

Part of my message today, however, is that there is no need to rush to enact federal Internet gaming legislation. I do not share the views of those who suggest that 

the recent Justice Department opinion is immediately going to open the floodgates 

of unlicensed and unregulated Internet gaming in the United States. While such 

gaming may not be prohibited by the federal Wire Act under the Justice Department’s recent opinion, interstate Internet gaming is still subject to the proscriptions 

of UIGEA and may well run afoul of the Unlawful Gambling Business Act, RICO 

and other civil and criminal forfeiture statutes. As a result, I think Congress would 

be making a serious mistake if it rushed into enacting federal legislation without 

the careful, deliberative process the subject deserves. 

In this connection, I think there are some useful parallels to be drawn between 

where Congress finds itself today with respect to Internet gaming and where Congress was in the late 1980’s, when it was considering Indian gaming legislation after 

the Cabazon decision. 

Both situations presented a complex and controversial mix of federal, tribal, state 

and commercial interests and both tribal gaming then, and Internet gaming now, 

are likely to have important economic, political and societal consequences. But despite these facts, Congress did not rush to enact Indian gaming legislation in the 

1980s. Twenty months elapsed between the time of the Cabazon decision, in February, 1987 and the enactment of the Indian Gaming Regulatory Act in October, 

1988. But what must be kept in mind is that Congress had been actively considering 

Indian gaming legislation as early as 1984, a full three years before Cabazon. So 

by the time IGRA was signed into law by President Reagan in 1988, Congress had 

devoted more than four full years to that legislative process. 

Now, I’m not suggesting that Congress necessarily needs to devote that much 

time to the Internet gaming issue and I’m not proposing that Congress ‘‘study the 

issue to death.’’ Nor do I want to minimize the difficulty or complexity of the negotiations that resulted in the final version of the Indian Gaming Regulatory Act. As 

Professor Skibine recalls, all of us left blood, sweat and tears on the floors of those 

meeting rooms. But in the end, that long, deliberative process worked and produced 

a legislative framework that, despite its flaws, has proven to be a pretty good compromise that is now pumping more than $25 billion annually into Indian Country. 

The situation involving Internet gaming today presents a very similar challenge. 

It involves many moving parts and potentially competing interests. But precisely for 

those reasons, the issue deserves thoughtful attention and not a rush to judgment. 

Authorizing the use of this technology in gaming to maximize its benefits and minimize its potential problems requires no less. 

While I’m talking about parallels, let me mention one more. In IGRA, and particularly in the definition of ‘‘class II gaming,’’ Congress in 1988 declared that tribes 

were entitled to incorporate future technologic advancements (or what the statute 

calls ‘‘electronic, computer or other technologic aids’’) into their gaming activities. 

As this Committee’s Report on S. 555 plainly stated,

[t]he Committee specifically rejects any inference that tribes should restrict 

class II games to... current technology. The Committee intends that tribes 

be given the opportunity to take advantage of modern methods of conducting 

class II games and the language regarding technology is designed to proved 

maximum flexibility.

49

Senate Committee Report, page 9.

I think the parallel here is obvious. If Congress is going to continue to keep that 

promise it made to tribes about allowing them to incorporate technologic advances 

into their gaming activities, then that same commitment needs to apply to Internet 

gaming now. 

This leads me to the final premise of my testimony. Indian tribal governments 

need to be full and active participants in all processes by which federal Internet 

gaming legislation is developed, and tribes are entitled to have the full right to develop, use and benefit from Internet gaming to the extent they wish to do so. Legislation that limits or restricts the ability of tribal governments to reap the benefits 

of Internet gaming is simply unacceptable. 

Admittedly, not all tribes will choose to make this leap across the digital divide. 

And for those that do, there will be any number of potential models as to how that 

involvement might be structured. The IGRA format—involving tribal ownership, operation and regulation of the gaming operation—has proven its worth over the last 

25 years and could be one option for some tribes. 

But that is certainly not the only model. In California, for example, a group of 

29 gaming and non-gaming tribes has joined forces with an equal number of commercial cardrooms to form the California Online Poker Association. That group is 

promoting state legislation under which California would create, license, regulate 

and derive state revenues from an intrastate Internet poker system. Again, this may 

not be the right answer for every tribe, but for those that choose that path, they 

ought to have that right. 

Internet gaming today, like Indian gaming 25 years ago, is complicated and controversial. But it’s coming, and so tribal governments need to be smart and flexible 

in their thinking on the issue, and Congress needs to recognize that tribes must 

have a seat—in fact, given the wide diversity of opinions on the subject in Indian 

Country, they are probably entitled to several seats—at the tables where these decisions are going to be made. 

That concludes my testimony and I would be happy to respond to any questions 

the Committee members may have.

The CHAIRMAN. Thank you very much, Mr. Feldman. 

Mr. Fleming, you testified in favor of Federal legislation regulating Internet poker. You view poker legislation as more beneficial 

to Tribes than open-ended Internet gaming. Can you elaborate on 

why Tribes would far better under poker-only legislation, rather 

than other contemplated legislation? 

Mr. FLEMING. Thank you very much for that question, Mr. Chairman. I would be happy to elaborate on that point. 

My personal conclusion is that that is clear. We have heard today 

and we have seen in the various written testimony that has been 

submitted to the Committee of the dangers of States and certain 

private interests being able to unfairly, essentially, compete with 

Tribal interests. We heard from President Porter about how the 

Tribal interests specifically bargained for their right to a certain 

amount of geographic exclusivity. But we all also realize that there 

is no such thing as geographic exclusivity with respect to the Internet. 

So if there is a State lottery commission that decides it is going 

to start offering games that are the functional equivalent of the 

games that are offered on Tribal lands, then clearly there is going 

to be a competition there. There is really no way to create a geographic barrier there. And that could seriously undermine Tribal 

gaming revenue as it exists today. 

With respect to poker, as I said earlier, currently the revenue 

Tribal gaming gets from poker is 1 percent of their total revenue. 

But more importantly, as I tried to say in my limited time, poker 

has a symbiotic relationship with local gaming and the Internet. 

And there is absolutely a direct available way for Tribal gaming inVerDate 0ct 09 2002 10:45 Nov 28, 2012 Jkt 075534 PO 00000 Frm 00053 Fmt 6633 Sfmt 6601 S:\DOCS\75534.TXT JACK
50

terests to take advantage of online poker in a manner that 

wouldn’t really exist with other forms of gaming. And that is to 

draw the poker player to the Tribal casino. 

A Tribal casino that either operates its own site or is part of a 

network, or in the industry they often call affiliates, is a Tribal casino that could market itself to that same geographic area where 

it currently has exclusivity. It could market itself to the people in 

that area, those people would become part of the Internet poker 

network through the Tribal casino affiliate. And the Tribal casino 

would then have that personal relationship with the customer and 

could also, because affiliates are given a percentage of the revenue, 

could also afford to adopt promotions that would entice the online 

poker player to come to the online casino. 

And I can tell you, as a poker player, we like to play poker a lot, 

we don’t like to have to drive hours to play poker or fly hours to 

play poker. There is nothing better than having a game nearby. 

And we can be drawn into that much more efficiently than you 

could ever do with any of the other games that are being talked 

about today. 

The CHAIRMAN. Thank you. 

Mr. Feldman, in your testimony you state that lawful Internet 

gaming is likely inevitable. What comparison can you make to this 

new potential market for Tribes and the climate under which the 

Cabazon decision was made and IGRA was enacted? 

Mr. FELDMAN. Chairman Akaka, in the late 1980s, I think Indian 

gaming presented an uncertain market with unknown potential. At 

that time, shortly after the Cabazon decision, as IGRA was adopted, nobody really knew where Indian gaming was going to go. As 

someone mentioned, at that point there were a handful of small casinos and bingo parlors scattered around the Country. And where 

it was going to go couldn’t be determined. If my memory serves me 

correctly, I think around 1990, the total revenue for Indian gaming 

nationally was somewhere in the neighborhood of $200 million. 

We look today at the chart up here and we are looking at $26.48 

billion. So I am not sure anybody could have predicted that level 

of growth 20, 25 years ago. 

With the Internet gaming market, though, sitting here today, I 

think we have a better sense of what is going on out there. As has 

been discussed, the number that people tend to use for lawful 

Internet gaming in jurisdictions where it is permitted is somewhere 

around $30 billion with $7 billion or $8 billion of that coming from 

the United States. So my guess is, if Internet gaming were legalized in the United States, all the legal obstacles removed, we would 

see a dramatic expansion, and I think the market is probably unlimited in terms of where Internet gaming could go. 

That is why I am so adamant that Tribes need to be given full 

participation. Their entitlement needs to be recognized in any legislation that Congress considers. They need to have full participation. 

And the other part of it is they need to be given as much flexibility as they can. One model is not going to fit all Tribes. There 

are a lot of different ways that Tribes may choose to get involved 

in Internet gaming. 

51

So in addition to full participation, I think the other component 

there is flexibility, so the Tribes can decide for themselves what is 

the best approach for them to get into that industry. Thank you. 

The CHAIRMAN. Thank you. 

Mr. Fleming, do you read the DOJ opinion to now allow States, 

through their State lotteries, to engage in any type of Internet 

gaming except sports betting? If so, what is the potential impact 

to Tribal gaming as it currently exists? 

Mr. FLEMING. Thank you for that question, too, Mr. Chairman. 

I think I answered a little bit of that question in my previous answer. 

Yes, I definitely see, the interesting part as I explained in detail 

in my written testimony is that while there are other Federal laws 

that control gambling to a certain extent, all of the other Federal 

laws besides the Wire Act, and Professor Rose mentioned this, too, 

all of the other laws besides the Wire Act require as part of the 

offense, part of the conduct that is prohibited, that that conduct 

also violate a State law. Thus, if you have an activity that a State 

does not make illegal or specifically allows, it is now, per this new 

DOJ opinion, outside of the purview of the Wire Act. 

So yes, the States now are essentially totally open to adopting 

any kind of online gaming they wish to, except for that specifically 

federally prohibited area of sports betting. 

And as I said last time, the impact here on Tribal gaming is because that will go directly to where most of the Tribal gaming revenue comes from, from the traditional casino games like blackjack 

and roulette. And more importantly, because in many States the 

Tribes have exclusive markets to slot machines, there would be direct competition. 

And unlike poker, there is not the same symbiotic relationship. 

People who like to play slot machines like to play slot machines. 

It is not a social game that draws them to a particular place. They 

go where the games are available. If the games are available on 

their home computer, then certainly they have much less incentive 

to visit a Tribal casino to play the same game. They are not interacting with other people, they don’t need other people to play the 

game, they don’t need a large number of people to make the game 

viable. 

So I see the potential for significant negative effect. Again, there 

are numerous ways to answer it. One could hope in some States 

they would take the effort to be protective for the Tribes like they 

should be. But there is nothing in the Federal legislation as it currently exists that mandates that they do that. 

The CHAIRMAN. Thank you very much. 

You did mention, I think you did mention that there were three 

things with poker. One was it was a social game. What are the 

other two? 

Mr. FLEMING. I am sorry if I wasn’t clear. It is my first time testifying. 

Mr. Chairman, aside from being a social game, it is not a game 

that is played against the house. Every other game that takes place 

in the casino pits the customer against the casino. Whereas with 

poker, the customer is playing against the other customers. That 

is a fundamental factual difference. It also makes for an entirely 

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different structure of a poker market, and an online poker market. 

It is one of the reasons we at the Poker Players Alliance are so insistent on a broad poker market. Because when you need other customers to play against, you have to have a wide pool of players. 

The third major difference is that poker is a game that requires 

active involvement. A poker player doesn’t sit down and just push 

a button and make his bet and wait for a result. A poker player 

has to make decisions throughout the game, strategic decisions, 

many times complex and very difficult decisions that actually engage the player in the game. And this again leads to the cohesive 

nature of poker, the reason why poker brings people together and 

why playing it online is not going to stop people from playing it in 

live venues. 

The CHAIRMAN. Thank you very much. 

Mr. Feldman, if there is an expansion of federally-authorized 

gaming into Internet gaming, should Tribal governments be compensated for their loss of exclusivity? 

Mr. FELDMAN. Mr. Chairman, I think that there needs to be 

some accommodation for that loss of exclusivity. Tribes have a lot 

to lose. Tribes probably have more to lose with the expansion of 

Internet gaming than any other segment of the gaming industry. 

And I think we need to be cognizant of that, and I think any legislation that Congress considers, I don’t have the solution, I can’t 

give you the formula. But I think it is entirely appropriate for Congress to give some consideration to that potential loss of exclusivity 

and to protect it in some way so that this $26 billion in revenue, 

which today is funding, as you said in your opening statement, 

health programs, education programs, senior citizen programs, 

Tribes can’t afford to lose that revenue stream. 

So the legislation, any Federal legislation, needs to incorporate 

some form of protection to ensure that that revenue stream is not 

threatened by whatever form of Internet gaming is authorized. 

The CHAIRMAN. Thank you very much for your responses to our 

questions. Thank you for basing it on your experiences and the 

work you have done already with Tribes. I want to say mahalo, 

thank you, to all of our witnesses who participated in today’s hearing. 

The discussion has been very informative and has given us all 

a lot to think about as this issue continues to really develop. The 

Committee will continue to work closely with Tribes, our Senate 

colleagues and other interested parties in any Internet gaming legislation that may be moving forward. 

Without question, this, may I call it industry, is really developing 

and growing. It is well that we look closely at what is happening 

and the direction it is moving in, and help to guide it with our expertise and of course, guidance whether it is executive or legislative, to help out the cause. 

So thank you all, our witnesses, for your responses. And we look 

forward to continuing to hear from you in this area. 

Thank you very much. This hearing is adjourned. 

[Whereupon, at 4:02 p.m., the Committee was adjourned.]

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