BULLETIN

No. 2021-5 October 5, 2021

Subject: Submission of Sports Book Agreements for Review

The purpose of this Bulletin is to provide supplemental guidance on emerging trends and 

issues the National Indian Gaming Commission Office of General Counsel has encountered 

during its review of sports book agreements. This Bulletin supplements Bulletin 2020-1, “IGRA 

and Sports Book Operations,” issued on January 29, 2020.

Bulletin 2020-1 discussed sports betting from a broad perspective, setting out various 

options tribes may pursue to open a sports book at their Casino. One of the sports book models 

discussed was the operation of tribally-owned sports book with data supplied by a third-parties.

In the time since Bulletin 2020-1 was posted, the NIGC’s Office of General Counsel has 

reviewed several draft sports book agreements, including vendor agreements, consulting 

contracts, and development agreements, to determine whether these agreements implicate 

management or violate IGRA’s sole proprietary interest requirement. Many of those reviews 

were performed at the request of the contracting parties and resulted in the issuance of an opinion 

from the General Counsel that analyzes the terms of the agreement. These letters, referred to as 

declination letters, give guidance as to management and sole proprietary interest. 

Additionally, in 1994, the NIGC issued a bulletin addressing the differences between 

consulting contracts and management contracts.1 The bulletin noted that whether a contract is a 

consulting or management contract “depends upon the specific facts of each case,” but explained 

that, generally, management encompasses planning, organizing, directing, coordinating, or 

controlling activities with respect to all or part of a gaming operation. Although not specific to 

sports book agreements, the principles laid out in that bulletin are still a useful resource for 

parties as they negotiate agreements. 

 1 Bulletin No. 1994-5, Approved Management Contracts v. Consulting Agreements (Unapproved Management 

Contracts Are Void)
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Although the NIGC’s Office of General Counsel will continue to issue declination letters 

upon request, it is the Agency’s intent that tribes and the parties with whom they are contracting 

look to this bulletin, as well as the materials referenced above, to determine whether a particular 

agreement implicates management. If a particular sports book related agreement adheres to the 

principles and analyses outlined herein, the NIGC’s Office of General Counsel would likely 

opine that it does not need to be submitted for the Chair’s approval as a management agreement

or violate IGRA’s sole proprietary interest requirement.2

Management and Sole Proprietary Interest Considerations

Generally, if a contract requires or permits the performance of any management activity 

with respect to all or any part of a gaming operation, the contract is a management contract 

within the meaning of IGRA and requires the Chair’s approval.3 Any action by a third party that 

constitutes “planning, organizing, directing, coordinating, or controlling” all or any portion of a 

sports book can trigger concerns about whether the third party is managing the sportsbook 

operations.

IGRA requires Indian tribes to maintain “the sole proprietary interest and responsibility 

for the conduct of any gaming activity” in gaming facilities located on their Indian lands.4 To 

determine whether an agreement violates IGRA’s sole proprietary interest requirement, the 

NIGC typically analyzes three elements: (1) the term of the contractual relationship; (2) the 

amount of revenue paid to the third party; and (3) the third party’s right to exercise control over 

the conduct of the gaming activity.

A. Provisions that implicate management or raise concerns related to sole 

proprietary interest

The following are examples of provisions that raise potential management or SPI 

concerns:

• Prohibitions on management activity must be absolute. A provision that provides an 

exception to a prohibition against management raises management concerns. For 

example, although the following provision prohibits management by a vendor, it is not 

absolute because it begins with an exemption, “Unless otherwise stated in this agreement, 

Vendor is prohibited from operating or managing the gaming activity.”

• A contract provision will raise management concerns if it allows a vendor to draft and/or 

revise sports book house rules, or risk management policies. A vendor may not make 

vital decisions related to the Tribe’s sports book. Determining risk management policies 

 2 The information provided in this Bulletin assesses current trends in the NIGC’s regulatory approach and existing 

positions. It may be updated as needed. Please email any comments on this topic to NIGC_outreach@nigc.gov. 3 See 25 U.S.C. § 2711 4 25 U.S.C. §§ 2710(d)(2)(A), 2710(b)(2)(A). 
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and/or house rules for a sports book is a management function. Although a vendor may

provide recommendations concerning house rules, the Tribe must have the ultimate 

authority to determine when and how to adopt and/or revise such rules. The same is true 

for risk management policies and internal controls.

• Provisions concerning the term of the agreement may raise sole proprietary interest 

concerns if they allow for automatic or indefinite renewal terms. Although there is no set 

cap on how long a consulting or vendor agreement may last, a long contract term raises 

sole proprietary interest concerns.

• Requirements that a tribe or operation implement the recommendations of another party, 

such as a consultant, as to its gaming facility constitutes management by these entities or 

individuals. Thus, for example, if an agreement requires a tribe to bring in a consultant to 

review its operation on an annual basis, and requires the tribe to implement 

theconsultant’s recommendation, that provision would raise management concerns. A 

tribe can, however, agree as part of the contract that it will do certain specific things or 

will do those things as a consequence of another event occurring, or will refrain from 

taking specific actions. So, for example, a Tribe can agree in a contract that it will place 

10 kiosks in its sports book lounge, but cannot agree that it will place as many sports 

book kiosks in its sports book lounge as the vendor deems appropriate. Moreover, 

detailing specific, objective criteria for the selection of consultants, auditors, advisors, or 

other employees for the gaming operation in an agreement or agreements does not 

transform the agreement into a management contract.

• Signage, advertising, and marketing - Provisions that allow a vendor to make advertising 

and marketing decisions related to the sports book are problematic. A vendor may not 

control how a sportsbook is advertised, and/or marketed, and may not unilaterally make

decisions related to the location of interior and/or exterior signage for the sports book.

However, a tribe and vendor may agree upon predetermined criteria regarding the 

placement of marketing materials and advertising.

B. Contract Provisions that Raise Concerns Related to Implementation

Other types of provisions, although not necessarily objectionable on their face, may 

nevertheless raise management or sole proprietary interest concerns during implementation. The 

following are examples of provisions that may become problematic as the sportsbook develops 

and becomes operational:

• Kiosks - A growing number of tribal gaming operations utilize full-service kiosks for 

sports book wagering. Such kiosks receive betting data from the vendor and display it on 

self-sustained machines. Although this option is convenient, it poses unique de facto

management risks. To prevent management by a vendor, the agreement must make clear 

that the tribe has the sole discretion to make all final determinations as to when and how 
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to use, or not use, the sports betting data supplied to the kiosks. The tribe must be able to 

alter lines and suspend betting, and must ensure that it has ultimate control over the 

kiosks and data.

• Shortfalls - Some agreements provide that a vendor will cover sports book shortfalls and 

will only be reimbursed when the sports book is profitable. Although such a provision 

may be beneficial to a tribe, the shared risk between the tribe and vendor suggests a 

partnership. In and of itself, such a provision may be acceptable, but in the context of the 

agreement as a whole, it may become problematic as it indicates that the vendor 

relationship extends beyond simply providing a service.

• Compensation The compensation paid to sports book vendors has generally been higher 

than compensation for other types of vendor services. The NIGC does not make 

determinations as to whether a business decision by a tribe is good or bad, and recognizes

that the tribe is in the best position to determine the value it places on the services for 

which it is contracting. That being said, the fee is one of the elements the NIGC must look 

to in determining whether a sole proprietary interest violation has occurred. The Agency 

understands sports betting is a new amenity that requires specialized and technical 

knowledge and involves unique risks. The NIGC will continue to defer to tribes as to the 

reasonableness of fees where appropriate but those fees must be related to a service being 

provided and must be within the realm of reasonableness. For example, a 50/50 split of net 

gaming revenue suggests a partnership rather than provision of a service to the Tribe. It 

should also be noted that if compensation paid to a vendor is based on terms that do not 

align with the definition of net gaming revenue in the NIGC regulations,

5 the NIGC will 

convert such compensation arrangements to determine the percentage of net revenue as 

defined under IGRA.

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The NIGC will continue to monitor this area as the industry matures to ensure that 

compensation paid to sports book vendors is commensurate with the services rendered. As 

the NIGC has found in the past, a high fee coupled with a long term or provisions that give 

the vendor or consultant control indicates a sole proprietary interest violation.

• Investment in Sportsbook Buildout and Setup - In some agreements, a vendor will

provide a sizeable payment to a tribe to set up a sports book within a portion of the tribe’s 

existing casino. This payment raises concerns regarding whether the contract establishes a 

joint venture rather than merely providing services of a technical expert. Such a payment 

 5

 See 25 C.F.R. § 502.16. 6 The NIGC requests that requests for an opinion include a pro forma financials so that the NIGC can analyze and 

gain an accurate understanding of cost allocation and compensation pursuant to the agreement. This information is 

also critical to ensuring that the vendor compensation is reasonable, and is not such a high percentage of NGR as 

defined under IGRA as to raise sole proprietary interest concerns. 
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alone, even if sizeable, is not necessarily problematic, but it can pose SPI concerns if the 

vendor’s compensation is tied only to the investment and not to services the vendor will 

render to the tribal entity, especially if there are other factors that suggest a partnership.

• Acceptance or Denial of Wagers - “The Vendor shall make the initial decisions 

regarding the acceptance or denial of any wager at the sportsbook, and the Tribe shall 

have the final decision-making authority. If the Vendor denies any wager, but the Tribe 

accepts the wager, the Tribe shall be responsible for any profit or loss resulting from such

wager.” This type of provision may be acceptable if the Tribe has pre-approved criteria 

for the acceptance and/or denial of wagers. Without standards, however, the provision 

grants discretion to the vendor to make decisions, as opposed to recommendations, which 

allows the vendor to control when wagers are accepted or rejected. 

A variation in an agreement we recently reviewed defined “Sports Book GGR” as 

“for any particular period, total gross gaming revenues derived from the Sports Books 

(i.e., the total of all sums wagered (excluding voided or cancelled sports wagers) in the 

Sports Books less the total of all sums actually paid out as winnings on such wagers), but 

specifically excluding in such calculations any payouts as winnings on wagers that are 

the result of Tribal Entity utilizing its discretion to set odds, pricing or events th[at] 

deviate from those recommended by [Vendor] as part of Vendor’s] Services.” Pursuant to 

this provision, the vendor’s share of NGR may not be increased by excluding from the 

calculation prizes paid based on management decisions the Tribal Entity makes. This 

penalizes the Tribal Entity for its Sports Book management decisions and it incentivizes 

the Tribal Entity to accept all of the Vendor’s “recommendations,” which makes the 

Vendor a de facto manager.

• Training – Sports betting is a relatively new form of gaming, and decisions regarding the

setting of odds, choice of events, changes in odds, and other sports book functions 

requires specialized skills and knowledge. If a Tribe does not employ staff with 

specialized knowledge regarding sports book operations, a vendor could inadvertently 

assert undue control and influence while a Tribe trains and/or retains such personnel. The 

NIGC understands that there is a certain amount of lead time required to gain the proper 

knowledge and expertise to operate a sports book. However, if a vendor offers training to 

a Tribal entity’s employees, the Tribe must control the type and manner of training. In the 

end, the operation must be managed by the Tribe, with the vendor exerting no 

management control or influence whatsoever.

C. Provisions that may be Helpful to Mitigate against Management or SPI 

Concerns

• Agreements should include language that clearly indicates that the vendor will not engage 

in management activities, i.e., any action that constitutes “planning, organizing, directing, 

coordinating, or controlling” all or any portion of a sports book. In addition, an 

agreement that the NIGC recently reviewed affirmatively provided that “[r]egarding 
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wagers governed by this Agreement, [the Tribal Gaming Enterprise] shall retain the 

ability to decide which sports betting wagers it will or will not accept and/or whether or 

not [it] wishes to change the lines of a particular game for the Sports Book, and [the 

Tribe] shall retain the ability to decide which sports betting wagers it will or will not 

accept and/or whether or not [it]wishes to change the lines of a particular game for the 

Game Offering, regardless of [the Vendor’s] recommendations.”

• If an agreement uses terms that could suggest management in describing vendor services

– for example “oversight” or “training” – be sure to clearly detail the third party’s 

authority regarding each term and provide clear limitations where necessary. For 

example, if any oversight is provided by a third party, the agreement should clearly state 

that such oversight will apply only to the technical aspects of the sports book, not gaming 

as a whole. Or, if any training will be provided by a third party, the nature of the training 

should likewise be described with limiting language indicating to whom training will be 

provided, as well as the purpose, scope, and duration of such training.

• Agreements should provide for what happens to equipment and branding at the end of the 

term or if the Agreement is terminated.