— Chris Irwin , Senior Vice President of Native American Services , The Innovation Group
As a result , “ tribes would rather not have sports betting at all than jeopardize any part of the business they ’ re doing right now . It ’ s opening a Pandora ’ s box that could lead to commercial gaming not previously in the market .”
High Stakes
For casinos , iGaming wasn ’ t a possibility until 2011 , when the U . S . Department of Justice ruled that the federal Wire Act applied only to sports betting , not iGaming in general . The potential for widespread sports betting didn ’ t follow until 2018 , when the Supreme Court overturned the Professional and Amateur Sports Protection Act ( PASPA ), opening the door to a legal industry on a state-by-state basis . While iGaming and mobile sports betting go handin-hand , they ’ re different animals , with different profit margins .
New Jersey , for example , legalized iGaming in November 2013 ; in the first year , operators generated $ 124 million in gross gaming revenue , “ a drop in the bucket compared to what they were making on brick-and-mortar facilities ,” says Irwin .
While the industry was slow to take off , it ’ s been accelerating ever since . In 2022 , online casinos in the state brought in more than $ 1.6 billion in revenue , up 21.6 percent over 2021 and a 13-fold increase over nine years . Those figures , with all those zeroes , have lawmakers salivating .
For all the hype about sports betting and the many billions of dollars in play , the profit margin is pretty meager compared to casino gaming — typically less than 5 percent . It could be argued that tribes aren ’ t missing much by sitting out that game .
But revenues aside , they must take into account consumer demand . Could tribal operators risk alienating customers who expect or demand mobile and online options ?
In 2021 , Connecticut lawmakers voted overwhelmingly for a bill to legalize online casino games , mobile sports betting and an online lottery . It was the first overhaul of the state ’ s gaming laws since the 1990s , when the Mashantucket Pequot and Mohegan tribes opened Foxwoods and Mohegan Sun , respectively .
Connecticut ’ s agreement “ preserved our tribal sovereignty and allowed us to still operate from a point of exclusivity ,” says Anika Howard , president and CEO of FoxPlay , the online gaming arm of the Mashantucket Pequot Tribal Nation .
A Workable Model
Wondr Nation ( formerly Mashantucket Pequot Interactive ) manages Foxwoods ’ social casino and collaborates with DraftKings on cobranded Foxwoods iGaming and sports betting offerings . The subsidiary ’ s stated goal is to create “ maximum opportunities , profitability and impact for industry partners ,” expand the tribe ’ s online footprint and enable it to partner with other Native American tribes and tech firms .
Howard acknowledges concerns that , as legal online gaming proliferates , “ the powers-that-be could use it as an opportunity to roll back some of the provisions made in tribal compacts .
“ We made a slight compromise on sports ” in Connecticut , she says , “ because we felt like the bigger opportunity was in online gaming . And so it starts with the strategy . What do you really want to accomplish ?”
For Foxwoods , “ the goal is to increase revenue , increase opportunities and increase player satisfaction by providing something that people are already doing — playing online , in the legal market or not .
“ We ’ ve entered a mobile-first society ,” Howard continues . “ At this point , it ’ s expected — if you can buy coffee with your mobile phone , why can ’ t you play your favorite casino game or make a sports bet on your mobile phone ? Taking out some of the political dynamics , you have to start with the players who make up your customer base . You want to create an experience that works for your player .”
She disputes the notion that online casinos are a direct threat to land-based patronage : “ The reality is more nuanced . Some players are very distinctly online players — just because you don ’ t have an online offering doesn ’ t mean they ’ re going to come to the casino and play . Ironically , in remote locations , this can be an opportunity to increase the player base if
18 TRIBAL GOVERNMENT GAMING 2023