Native American Tribal Government Regulations of The Internet Gambling

39 Florida has taken an active role, including cooperative efforts with Western Union, to stop the money-transfer service of 40 offshore sports books. On this subject, Florida Attorney General Robert A. Butterworth stated, “Through sports magazines and other media, offshore bookmakers are urging Floridians to place bets by telephone, and the Internet. They are leading people to believe such wagers are legal when in fact they are strictly prohibited by Florida law.” 40 Additionally, Florida’s Office of the Attorney General mailed letters to media throughout the State advising them to “cease and desist” advertising for offshore sports books. 41

A number of state attorneys general have initiated court action against Internet gambling owners and operators and have won several permanent injunctions; some companies have been ordered to dissolve, and their owners have been fined and sanctioned. But the impact has been limited: The large majority of Internet gambling sites, along with their owners and operators, are beyond the reach of the state attorneys general.

Native American Internet Gambling
The difficulty state governments face in regulating or prohibiting Internet gambling has been made clear in disputes regarding sites owned by Native American tribal governments. A number of state attorneys general have taken action to prevent Native Americans from providing Internet gambling within their states. The unique legal status of Native Americans in the area of gambling, however, creates a number of issues that only the federal government can resolve.

The first such site, called “US Lottery,” was launched by the Coeur d’Alene Tribe in Idaho in 1998. Before its entry into Internet gambling, the tribe had legally operated a casino on its reservation and had an approved compact with the state of Idaho to do so. The provisions of the Indian Gaming Regulatory Act (IGRA), however, allow tribes to provide games such as bingo without state authorization or regulation. And IGRA is ambiguous on the subject of tribes offering such games to individuals outside of the reservation and into other states and jurisdictions. This lack of specificity has lead to several different interpretations in recent court cases.

In 1998, Idaho’s attorney general attempted to prevent the site from beginning operations by informing AT& T that his office was taking court action to prevent the company from providing telephone service that facilitated the placing of bets or wagers. AT& T subsequently informed the tribe that it could not provide the service, prompting a tribal court ruling ordering the company to provide the service. The dispute then moved to federal court.

While the case was being heard, the Coeur d’Alene Tribe established the US Lottery Internet site. Much like the Internet gambling sites located outside the United States, the US Lottery site offered information, demonstrations, and payment options via credit card, fax, or telephone. 42 In response, the Missouri attorney general filed a lawsuit against the Coeur d’Alene Tribe and UniStar Entertainment, Inc., in the U. S. District Court for the Eastern District of Missouri, seeking to prevent US Lottery from offering its games to Missouri citizens. 43

The resulting court rulings have further confused the subject: The Federal Court in 1997 ruled that the Coeur d’Alene Tribe’s sovereign immunity preempted them from Missouri state law and regulation of the gambling.

40 Press Release from the Office of the Attorney General of the state of Florida, “Western Union Cuts Off Sports Betting Accounts,” (Dec. 23, 1997) (on file with the office of the attorney general). 41 Letter from Gary L. Betz, Special Council, Office of the Attorney General of Florida, to various radio stations and print publications, Re: Advice to Cease and Desist, (Dec. 24, 1997) (on file with the attorney general’s office). 42 Ibid. 43 National Association of Attorneys General, supra note 126.