New Mexico Sportsbook Finds a Loophole

Many could not understand exactly how New Mexico became the fifth state to offer sports betting following the repeal of PASPA by the Supreme Court. New Mexico sports betting is a bit different than in other states as the state hasn’t even passed legislation authorizing any sports betting. What did happen was the Pueblo of Santa Ana tribe took matters into its own hands and opened a sportsbook at its Santa Ana Star Casino & Hotel. Maybe going for the old, “don’t ask for permission, ask for forgiveness” approach.

The tribe’s decision is one of the most interesting and least understood developments in US legal sports betting year. Fortunately, New Mexico sports betting made the agenda during the second annual U.S. Sports Betting Policy Summit, which was held last week in Washington, D.C. During the Summit, Michael Hoenig, general counsel for the National Indian Gaming Commission, said about the Pueblo of Santa Ana tribe:

“I think under IGRA the way it’s written now, if a state is allowing its commercial operations to offer sports betting there’s no question that the tribe should be able to offer sports betting as well. And they may need to possibly renegotiate their compact.The gray area is where there’s no prohibition and there’s no outright allowance, which I think is what we’re seeing in sports betting because some states couldn’t authorize it in the past. But they didn’t want to make it illegal either, so there’s just this kind of gray area.”

Based on these remarks, a tribe must satisfy at least two conditions to offer sports betting if the state hasn’t passed the proper sports betting legislation.

The first condition is pretty straightforward: state law cannot expressly prohibit sports betting. “New Mexico doesn’t have any law that I’m aware of … that explicitly prohibits sports betting and they have a compact that says that the tribe can offer any Class III game. So there’s no prohibition against sports betting and sports betting is a Class III game, so they’re taking the position, I believe, that under their compact they can offer sports betting.”

The second condition gets more technical as sports betting needs to be absent from a list of prohibited Class III games in the tribal compact. Otherwise, the list of authorized Class III games must either include sports betting or not make mention of any specific games. “Their [Pueblo of Santa Ana] compact, for example, just specifies that the tribe can operate all class-III games; that’s it.”

The compact reads as follows: The Tribe may conduct, only on Indian Lands, subject to all of the terms and conditions of this Compact, any or all forms of casino-style gaming, including but not limited to slot machines and other forms of electronic gaming devices; all forms of poker, blackjack and other casino-style card games, both banked and unbanked; roulette; craps; keno; wheel of fortune; pai gow; and other games played in casino settings; and any form of a lottery.

Things get dicey because sports betting does make a brief appearance in the law. As New Mexico Statutory section 30-19-15 clearly states:

It is “[u]nlawful to accept for profit anything of value to be transmitted or delivered for gambling; penalty. It is unlawful for any person to, directly or indirectly, knowingly accept for a fee, property, salary or reward anything of value from another to be transmitted or delivered for gambling or pari-mutuel wagering on the results of a race, sporting event, contest or other game of skill or chance or any other unknown or contingent future event or occurrence whatsoever. None of the provisions of this act shall be construed to prohibit the operation or continued operation of bingo programs presently conducted for charitable purposes. Any person violating any of the provisions of this section is guilty of a fourth degree felony.”

However, just to make things more interesting, the tribal compact seems to exempt the tribe from these penalties. The New Mexico Gaming Control Board website reads, “Casino-style gaming is permitted in this State by Tribal/State Compact with the tribes and pueblos of New Mexico.” So, here we are. Yes, it’s illegal to operate an unlicensed sportsbook (or any other gambling establishment) in New Mexico. However, that doesn’t mean sports betting isn’t technically prohibited. As the NMGCB website states, “Betting on professional and amateur sports is a violation of federal law,” federal being the operative word, not state law.

This is obviously not the case in other states. It’s just the perfect storm of not having a state law that expressly prohibits sports betting and a tribal compact that authorizes all Class III games is the exception, not the norm. The Pueblo of Santa Ana found a wonderful little loophole that launched an unlikely sports betting state. That would explain why other tribes in other states haven’t followed suit.

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