In 2006 when the Unlawful Internet Gaming Enforcement Act (UIGEA) was enacted, one proactive company, Atlantis Internet Group Inc. (ATIG) saw the potential it held for gaming tribes within its lengthy, voluminous language. Although the UIGEA primarily focuses on the prohibition of payments being accepted by gaming facilities for illegal gambling activity made over the Internet that violate federal and state laws, it clearly excludes three types of gambling from its restrictions: fantasy sports, legal intrastate and legal intertribal gaming activities. This carve-out was no accident; the National Indian Gaming Association (NIGA) had successfully deployed expert attorneys during the formation of UIGEA who lobbied diligently to receive this important exemption for our sovereign tribal facilities. ATIG, an existing publicly traded company active in the commercial gaming sector, realized what a tremendous opportunity this held for tribes, but also how much work, preparation and diligence would be required to truly launch a sovereign tribal-to-tribal online gaming network.
ATIG CEO and President Donald Bailey approached the creation of his company’s patent-pending Casino Gateway Network and Tribal Gaming Network (TGN) like a scientist launching a new pharmaceutical discovery. (And, in fact, Bailey’s background began in the science-technology sectors designing IT systems for casinos.) For the launch of the TGN, care was taken to explore and research the legal, regulatory and technical elements. Bailey’s approach from the technical side was to create an optimal platform; likened to a menu of services for tribes to utilize for their entry into server-based gaming. The actual online games, not limited to poker, are structured like traditional wide-area progressives, but enhanced—more advanced and technologically superior, due to advances available in the server-based online space, including certain features unavailable in brick-and-mortar play (pooled-casino tournaments, live online dealers, international time zones allowing for 24-hour live betting pools, etc.).
Simultaneously conducting the research and development, ATIG knew it had to secure the regulatory approval as well. In 2007, ATIG applied for an opinion from the National Indian Gaming Commission (NIGC) seeking confirmation that the TGN is legal. In the typical lengthy, thoughtful and somewhat arduous process, the affirmative (and so far unique) NIGC determination letter was finally issued to ATIG in 2009, signed by then acting General Counsel Penny J. Coleman. The opinion is available to read on the NIGC website at nigc.gov under Reading Room/Game Classification Opinions/Casino Gateway Network.
Fast forward to the April 15, 2011 “crack down” by the United States Department of Justice (DoJ) terminating the illegal operations of three major commercial online gambling companies (also known as Black Friday); suddenly the importance of ATIG’s TGN is jettisoned to the top of gaming headlines as one of the few legal forms of server-based online gambling in America. Technically, the TGN is a private gaming network, linking Indian casinos nationwide and offering both Class III and Class II online games. The regulation stays within the jurisdiction of the NIGC, and each tribal facility is able to tailor their package to comply within individual compact needs, requirements or limitations. The TGN is a multi-vendor online gaming platform utilizing a best-of-breed format. Additionally, as tribes scramble to maintain their competitive advantage, especially related to the fast-paced advancing world of technology, TGN provides cutting-edge options since all of their games can be played on Android phones, Samsung tablets, kiosks and slot machines (and some games can also be played on iPhones and iPads). A customer can play virtually every game found in a casino on the TGN; from all traditional table games like blackjack, roulette, poker, slots (traditional and progressive), keno, live dealer games, simulated sportsbook, simulated horse, dog and car racing, lottery games, and scratch-offs.
Several tribal gaming facilities are currently signed onto the TGN with several more in the queue prepared to join. Coushatta Casino Resort was one of the first to sign on. Conrad Granito, general manager of the Coushatta Casino Resort, cites their desire to exercise sovereign rights under UIGEA now as their main reason for participating.
The ATIG management reports that as news of this unique opportunity spreads, tribal inquiries and calls are increasing exponentially to their office and sales staff. “Our continued growth comes as tribes nationwide realize the advantage of being first to capture the online gaming market in the U.S., which creates new gaming revenues and exciting online entertainment,” Bailey said. “Tribes want to exercise sovereignty and get started now.”
Jon Goldstein, chief operating officer of ATIG and a long-time gaming industry veteran, believes that tribes have to enter the online space. He feels their options are extremely limited and the commercial competitors are gaining ground. He says:
“All machine vendors and commercial gaming companies from around the world will be entering the lucrative online gaming market share of the United States. Tribes can sign up with one of these competitors, promoting those companies’ product lines to their patrons, which would obviously be counterproductive and open the tribal gaming operations to state regulations, rules, fees and taxes as well as jurisdictional infringement and customer base piracy…chipping away at sovereignty.”
Goldstein expresses with passion that: “Tribes could try to develop their own platform from scratch to compete within the market, which would take time and funding. Some of the larger tribes might be able to do this, but not small- to medium-sized tribal gaming facilities, who comprise the majority and who don’t have the resources. Finally, tribes could decide not to enter the online market…probably not the best idea, just ask Kodak about its delay into the new photo digital age.”
Goldstein’s points seem to resonate strongly with tribal constituents as the main topics of concern at tribal Internet discussions and panel presentations consistently are sovereignty, parity, regulation and control for tribal gaming facilities.
The 2006 UIGEA gave the aforementioned three exclusions to online gaming. In late 2011, the DoJ released yet another opinion letter clarifying that yes, in fact intrastate and intratribal gaming activities are exempt from the Unlawful Internet Gaming Enforcement Act. With this clarification, several states have scrambled to pass laws allowing online sales of lottery tickets and other forms of legal online gaming within the states’ boundaries. Fantasy sports flourishes. With regard to intratribal online gaming, to date ATIG is the only entity that has received an NIGC opinion letter for a server-based gaming program linking tribes that is ready to go.
Goldstein was asked why it took so long since UIGEA was passed to actually launch the TGN. His answer confirmed an analogy of a similar path to a new medical breakthrough—mandatory legal, regulatory, research, development, testing procedures, etc.: “ATIG employs teams of behind-the-scenes legal and regulatory experts, as well as technical and IT professionals. What appears at the customers’ touch of a mere fingertip on their mobile phone or computer terminal has actually taken years of methodical work to prepare and we are bringing a mature, market-ready platform, turnkey solution to tribes.”
ATIG’s program is designed to offer a 90-day “test drive” of the program free to tribal gaming facilities. After the trial period, which is a play-for-free model; once a tribe decides to play for cash, a “mirror server” is installed in their casino to provide access to the gaming platform’s main server located in Las Vegas where the games are loaded and monitored by gaming regulators. This server only passes information across state lines. All monies, “the bets,” and game outcome determinative functions take place on a server at the tribal casino location, which keeps the program legal and compliant with existing laws and the NIGC regulations. The TGN is not an Internet site; it is not available to the whole “wide world.” It operates via a closed loop Virtual Private Network, only accessible at the tribal level whereby gamers who register at the tribal web site or actual casino, and receive TGN players’ card that acts like a debit card. The player can load or transfer credits from any of their banking accounts at home, by computer or at the casino, and the player can cash out either at the casino or any ATM in the country. The TGN registered player card has smart chip technology similar to other banking debit cards.
One nice contractual point for tribes is that the TGN offers a non-exclusive engagement. ATIG can offer this since no other company offers play-for-cash in a server-based program (coupled with an NIGC opinion). Other companies only offer play-for-free (in preparation for eventual legalization), and so ATIG with an exclusive advantage is willing to provide the non-exclusive benefit to the tribal client. “Most tribes like the idea of a play-for-free program for marketing purposes, and there are several choices in that space, but at the end of the day if their customers can transition to play-for-cash and the casino can realize direct revenue without having to wait for any further legislation—it is an easy choice,” Goldstein said.
Internet online gaming has been a topic in Indian country that has been addressed at nationwide conferences by numerous speakers, attorneys, politicians, commercial gaming companies and NIGA for the last several years. Tribes have sent their council members and department leaders to these events hoping for a clearer understanding of Internet gaming and the ramifications to our tribal nations if or when legislation is passed. After attending these events and hearing the same message from similar entities, most tribal leaders have only developed a further sense of anxiety and confusion regarding how their tribe can compete with the larger commercial gaming companies and existing Internet gaming entities already established globally. Of major concern is the fact that whether the federal government legalizes or individual states legislate online gaming, the tribes will no longer have exclusive gaming rights. This will translate most likely into state gaming commissions regulating a new online gaming industry, within their borders, creating competition for the tribes and infringing on established tribal regulatory jurisdictions. One participant at a recent tribal gaming conference likened it to the Oklahoma land grab in the 1800s—a massive rush to grab “Indian territory.”
Although the overreaching topic of Internet and online gaming, and how it intersects with and appropriately recognizes tribal gaming rights, is far from being resolved anytime soon, the exemption provided under the 2006 UIGEA should be appreciated and explored. In that spirit, Bailey concludes with what seems like an easy concept to embrace: “Tribes can legally game for cash by offering TGN’s server-based online gaming products to their patrons at their brick-and-mortar casinos, hotels or other facilities on Indian lands. There is no reason for any tribe to be left behind. This is the next generation of gaming.”
Samples of the TGN’s program and games can be found on the ATIG website at www.atlantisinternetgroup.com.