FROM INDIAN COUNTRY TODAY
Saltsman and Solomon: Letting the genie out of the bottle?
By Ralph B. Saltsman &
Stephen Warren Solomon
As published in Indian Country Today - January 7, 2011
Well, do we let the genie out of
the bottle? Does this genie lavish untold wealth on its owner or
wreak devastation on an established treasured enterprise? By the
way, to whom does this genie belong?
In California, state legislation appears from time to time
allowing intrastate Internet gaming. One such bill in
preliminary discussion in Sacramento and elsewhere would grant a
license for Internet intrastate poker to an enterprise
consisting of card clubs and Indian tribes. That license would
unleash a genie co-owned by those two sets of entities. This
bill would allow for online poker and not Class III gaming. What
is not included in this discussion is the race track or state
Class III gaming includes card games played against the house
and Las Vegas-style slot machines. In time more than one license
could be issued to more than one business entity. This
intrastate gaming by definition would be confined to California.
Intrastate Internet poker where there is no bank and no
percentage take could yield hundreds of millions of dollars.
Internet gaming may: 1) reap billions for its owners; or 2)
generate a lot of excitement and
not much else; or 3) diminish the most successful gaming
That genie could be key to
California - Native American land.
fortune or could be the
means of destruction of the existing
enterprise sustaining so many tribes.
Indian casinos in California are billion dollar industries.
According to the National Indian Gaming Commission, California
casinos had gross incomes of $7.8 billion in 2007 and $7.36
billion in 2008. No one would consciously want to dismantle or
endanger those generous structures. On the other hand, who would
want to ignore tomorrow's multibillion dollar money machine that
is Internet gaming?
At present there is no lawful Internet gaming in the United
States. In California, through state constitutional amendment,
legislation and compacts between tribe and state, Indian casinos
have Class III gaming. Card clubs do not. California Indian
casinos are holding the cards over the competing card clubs.
This could change.
The statistical array of poker players, Internet gamblers and
casino patrons is only part of the equation under debate.
Regardless of what the numbers show as to who is gambling and
how they are doing it, no one can seriously argue the limits and
potential for intrastate California Internet gambling. Internet
gaming may prove to be without easily predictable limit. But
Indian tribes are wrestling with the issue of structure. One
very serious argument in opposition to Internet gaming is the
inclusion of card clubs into the world of tribal gaming
capabilities. Card clubs are not presently part of that success
story. Inclusion into an Internet gaming system of card clubs
partnered with Indian tribes may be the card clubs' first step
towards intrusion into what is now the tribes' exclusive domain.
The issue of Indian gaming exclusivity in California raises
the perplexing question: Is it in the Indian nationís best
interest to allow intrastate Internet gaming to be born if it
means ultimately losing the exclusivity in Class III gaming
Indian Nations presently enjoy? The above referenced legislation
under early discussion in California would restrict games to
poker thereby preserving Indian casinosí exclusive right to
provide Class III gaming, but many in Indian country are
wondering out loud if poker is but step one in a continuum of
graduated legislation and constitutional amendment that will end
with full Class III Internet gambling. At that point, the
tribesí exclusivity is lost, the genie has destroyed the brick
and mortar enterprise that has sustained Indian tribes, and
there is no putting the genie back in the bottle.
On the other hand, how can Indian nations which had the
foresight to create and build casino gaming allow the lucrative
opportunity of Internet gaming to pass?
The argument in favor of immediate passage of state legislation
permitting Internet intrastate poker, is this gaming will be
restricted to poker and not Class III gaming. The sanctity of
the Indian casino will be therefore undisturbed. Moreover,
failure to act now will allow legal Internet intrastate poker to
take off leaving the tribes behind.
Most observers believe Native
American However, once allowed the
financial wherewithal, cache of success and
tribes can now effectively block gaming
the attendant political power, card
clubs could have a platform from
further and additional Internet gaming
could be modified by legislation and constitutional amendment by
ballot all at card club instigation. Most observers believe
Native American tribes can now effectively block gaming
legislation. will that still be true when financially successful
card clubs participating in a tribal-card cub Internet
intrastate poker system go to the legislature and ballot
proposition in the future with new laws and constitutional
provision allowing Class III Internet gaming?
Those in favor of Internet intrastate poker point out that
absent tribal leadersí foresight in the 1980s and 1990s, the Las
Vegas-style casinos on Indian reservation lands would not exist.
That foresight now calls for action to take advantage of the
computer phenomenon which will grow exponentially with or
without tribal participation.
It is also true that when Native Americans won passage of state
constitutional amendments and attendant legislation, and the
federal government and state law adopted the machinery for
Native American casinos with Class III gaming, and the tribes
built those casinos, there were no billion dollar casino
businesses in California to lose. Now the intricacies of the
arguments are dangerous, because the stakes are high.
To some Native Americans contemplating their economic status
during the mid-20th century, their memories recall deprivation
without the nostalgia for those good old days. That genie could
be key to further fortune or could be the self-chosen means of
destruction of the existing enterprise sustaining so many Native
American tribes and the communities in which those Indian
The decision to allow passage of legislation in California to
establish lawful Internet intrastate gaming must be made wisely
to protect the existing casinos and, at the same time, provide
for the future.
So, do we let this genie out of the bottle? And whose genie is
Ralph B. Saltsman is a lawyer with Solomon, Saltsman &
Jamieson in Los Angeles. He has been a lawyer for 36 years, 34
of which have been in the area of land use licenses and permits.
Stephen Warren Solomon practices administrative law at Solomon,
Saltsman & Jamieson. His expertise centers on licensing and
Indian gaming and catastrophic personal injury.