Why the Supremacy Clause Will Prevail
Las Vegas Sportsbooks At Mercy of Tribal Owned Casinos in AZ
Under Article VI, Paragraph 2 of the U.S. Constitution, Federal Law generally takes precedence over state laws. While Arizona has permitted select sportsbooks to operate legally, the federal rights bestowed to Indian reservations will likely prevail over "licensed" rights on bets placed at tribe-operated casinos.
Prediction: AZ Tribes to Successfully Defend Federal Rights
As bettors start to feel out the boundaries now that sports gambling is legal in Arizona, many will try to place a wager using one of the popular mobile sportsbooks while visiting a casino only to be denied. Some gamblers may receive a generic error message stating that the sportsbooks cannot determine their location while the more responsible sportsbooks will inform their customers that they cannot place a bet "within Federally recognized tribal lands". (i.e. Caesars Sportsbooks) Considering that all major sportsbooks now offer live wagering, the true gamblers will be greatly frustrated by their sudden inability to place a bet in real-time on a game while simultaneously gambling at a casino in Arizona.
But can the tribe truly enforce this "firewall" against the placing of a wager while on "tribal lands"?
The answer, in my legal opinion, is YES.
Article VI, Paragraph 2 of the U.S. Constitution, which is commonly referred to as the Supremacy Clause, establishes that federal law generally takes precedence over state laws. However, on May 14, 2018, the U.S. Supreme Court ruled that states can legalize gambling. Thus, states can exercise control over gambling within their territory subject to federal rights granted to Indian reservations.
The Indian Gaming Regulatory Act ("IGRA") was enacted by the United States Congress on October 17, 1988, to regulate the conduct of gaming on Indian Lands. IGRA establishes the National Indian Gaming Commission and the regulatory structure for Indian gaming in the United States.
In November 2002, the voters of Arizona approved Proposition 202 which initiated new gaming compacts between the State of Arizona and the Native American communities which mandated the sharing of gaming revenues with the state.
On April 15, 2021, Governor Doug Ducey signed a landmark bill in Arizona legalizing sports wagering in Arizona and creating a definite number of licenses to be granted only to Indian reservations and sports franchises. It wasn't long before popular Vegas sportsbooks and online sports gambling sites (such as MGM, Caesars, Wynn, FanDuel, and DraftKings) partnered with professional Arizona sports franchises to open sportsbooks at various venues as well as providing a platform for mobile betting.
Indian reservations took issue with the law because gaming outside of sovereign lands (including via the internet) was prohibited. Yet, on September 6, 2021, an Arizona judge dismissed a tribe's motion seeking a temporary restraining order to stop the opening of sportsbooks in Arizona, arguing the legislation enacting sportsbooks in AZ violated the state constitution. The dismissal cleared the way for licensed sportsbooks to officially open for business on September 9, 2021 and allow folks in Arizona to wager on sporting events both in-person and online. However, an issue that remains undetermined is whether state rights or tribal rights prevail when a gambler tries to place a sports wager on a mobile (online) sportsbook while physically located on "tribal lands".
The Yavapai-Prescott Tribe will undoubtedly appeal the dismissal and will claim, in part, that their rights are protected under the IGRA which prevails over state-licensed rights under the Supremacy Clause over wagers that are placed while a bettor is on tribal land. While the tribe won't be able to prevent gamblers from wagering on sports when located on non-tribal grounds, they will be able to enforce their rules while gamblers are physically located on Indian reservations in Arizona (which includes all the casinos).
Opinion by Jeffrey Herman, Esq.
