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New lawsuit challenges tribal exclusive sports betting in Washington state

Jan 11, 2022, 11:49 AM | Updated: Jan 12, 2022, 6:01 am
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MGM National Harbor(Photo by Shannon Finney/Getty Images for MGM National Harbor)
(Photo by Shannon Finney/Getty Images for MGM National Harbor)

Newly legalized sports betting on some tribal lands in Washington state could be in jeopardy should a new federal lawsuit be successful.

The lawsuit filed today by Kirkland-based Maverick Gaming in U.S. District Court for the District of Columbia is challenging what it believes is an erroneous application of the Indian Gaming Regulatory Act (IGRA) that is being used inappropriately to give tribes exclusive rights to certain types of gaming, such as sports betting, that are not allowed in non-tribal gaming properties in Washington state, according to a press release.

“The Indian Gaming Regulatory Act was intended to guarantee parity between tribal and nontribal gaming, but unfortunately Washington State is misusing IGRA to instead create tribal monopolies on certain types of gaming, such as sports betting,” said Theodore Olson, partner at Gibson Dunn, the firm representing Maverick in the legal action.

“Contrary to IGRA’s own words, the law is being used to insulate tribes in Washington state from competition that exists in many other states with legal gaming marketplaces. We look forward to resolving this matter so that IGRA’s intent and wording are reflected in Washington state’s regulated gaming marketplace for tribal and commercial businesses,” Olson added.

Olson successfully represented the State of New Jersey in Murphy v. NCAA, the U.S. Supreme Court ruling in 2018 that allowed individual states to create legal, regulated, and taxed sports betting marketplaces.

“We support and respect tribal equality and sovereignty,” said Eric Persson, CEO and co-founder of Maverick Gaming. “Our decision to file this litigation is founded on the same values that we have brought to all of our efforts at Maverick Gaming. We are proud of our union-led workforce in Washington that offers family-wage jobs with benefits and a pension, helping create access to economic opportunity in communities across my home state. That access to economic opportunity relies on a fair application of laws such as the Indian Gaming Regulatory Act and I am hopeful that this lawsuit will resolve successfully so that tribal casinos and smaller commercial cardrooms like those owned by Maverick Gaming may offer the same types of legal gaming, such as sports betting, just like commercial cardrooms and tribal casinos already offer in other states.”

“We’re filing this claim in an effort to overturn the various compacts in the state and to bring commercial sports betting to the state of Washington,” Persson said in an interview Monday.

The lawsuit makes multiple legal arguments.

“Washington’s tribal monopoly is inconsistent with IGRA and federal criminal statutes, which prohibit class III gaming activity by tribal casinos on Indian lands unless a State permits the same activity by non-tribal entities. The tribal monopoly also violates the Constitution’s guarantee of equal protection of the laws by irrationally and impermissibly discriminating on the basis of race and ancestry. Neither a State nor the federal government may give Indian tribes the exclusive right to engage in commercial activities that have no relation to uniquely tribal interests. And IGRA itself violates the Tenth Amendment by mandating that States enter into negotiations with Indian tribes over class III gaming compacts,” states the lawsuit.

“We’re claiming that they [the compacts] violate the intent and purpose of the IGRA, which we believe the purpose of IGRA was to ensure tribes are able to compete commercially.”

Following the U.S. Supreme Court’s 2018 decision, multiple states took action to institute legalized sports betting, including Washington. Persson and Maverick tried – and failed — for multiple years to have existing card rooms included in the state’s legal sports betting future.

Despite support from several elected leaders in local jurisdictions where Maverick’s 19 Washington cardrooms are located, ultimately only tribes were permitted to offer sports betting in Washington under legislation passed in 2020 and signed by Governor Inslee.

Maverick has another legislative effort in the 2022 session to address the issue, but has been told the bill will not get a hearing.

“We’ve been working hard the last three years, making a ton of progress in the legislative branch. We partnered with the Teamsters, we’ve now got the support of the Washington Labor Council, which means all the unions in the state of Washington support us and we have bipartisan support,” Persson said.

“So we’ve made a ton of progress in the Legislature. But when we heard that [state Rep.] Kloba wasn’t going to give us a hearing this session, that was one of the tipping points,” Persson added.

Maverick’s legal team believes a recent ruling related to sports betting in Florida gives them the opening to make this legal challenge.

“We think it’s pretty clear the case decided in November in the D.C. Circuit, where they invalidated the tribal compacts with the state of Florida because it allowed all sports betting off reservation — I think that case shows you that an entity or a commercial sports betting opportunity can only be offered to the tribes once it’s offered commercially within the state,” Persson said.

Persson believes the issue will ultimately be decided by the U.S. Supreme Court.

Rebecca George, executive director of the Washington Indian Gaming Association (WIGA), wrote the following statement in response to the federal lawsuit filed today by Maverick Gaming:

“Maverick Gaming’s newly announced federal lawsuit is a desperate attempt to overturn federal law, the will of the Washington State legislature, state and federal agency decisions, and the clearly expressed sentiments of the general public in Washington State. It would severely undermine the well regulated and safe system of limited gaming that has been established in Washington State over three decades of carefully negotiated compacts between the State of Washington and Native American tribes.

“Those compacts are fully in keeping with the federal Indian Gaming Regulatory Act, as well as with state law, and have been repeatedly vetted at multiple levels of regulatory oversight. In short, this dangerous and destructive lawsuit is without merit, and were it to somehow be successful it would cause irreparable harm not only to historically marginalized tribal communities but also to the broader public, which opposes a massive expansion of gambling in their neighborhoods and communities. We will be reviewing their complaint more carefully, but Washington State’s tribes stand united in opposing any attempt to undermine the Indian Gaming Regulatory Act, tribal compacts, and what the tribes have worked so hard to build.”

Follow Hanna Scott on Twitter or email her here

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New lawsuit challenges tribal exclusive sports betting in Washington state