The Wisconsin Legislature is currently reviewing legislation that could enable 11 federally recognized tribes to initiate online gambling within the state via a “hub-and-spoke” framework.
This approach is gaining traction as tribes and states explore avenues to manage the swift rise of online gambling platforms that operate under federal oversight, according to ICT News.
Victor Rocha, Chair of the Indian Gaming Association and a member of the Pechanga Band of Indians, mentioned that some online betting platforms take advantage of regulatory loopholes to sidestep state jurisdiction and tribal gaming agreements.
“Prediction markets represent a loophole that has been exploited by Wall Street and tech entrepreneurs to bypass state and tribal rights,” Rocha stated. “The industry has long sought a method for implementing federal sports gambling across all 50 states.”
Prediction market platforms allow users to bet on real-world occurrences, like elections. These platforms classify their offerings as “event contracts,” placing them under federal jurisdiction by the Commodity Futures Trading Commission instead of state gambling laws.
Due to this classification, such platforms can operate legally in all 50 states, including areas where traditional gambling is prohibited. “It’s a matter of leveraging the situation, and it violates both state rights and tribal sovereignty,” Rocha explained.
Several states, including Nevada and Utah, have contested these platforms, while many other states have yet to create their regulatory frameworks.
Advocates argue that the hub-and-spoke model could be a viable solution to keep online gaming under tribal control. This model was first adopted in a 2021 gaming compact between the Seminole Tribe of Florida and the state.
In this arrangement, servers for online gaming platforms are situated on tribal land — the “hub.” Gamblers can place bets through mobile devices — the “spokes” — as long as they are within state borders.
Wisconsin legislators are considering a similar strategy. On February 19, the Wisconsin Assembly pushed forward Assembly Bill 601, which would permit the state’s 11 federally recognized tribes to implement their own hub-and-spoke online gambling system.
“This is a significant step towards curtailing illegal gambling and offshore operations,” says Dominic Ortiz, CEO of the Potawatomi Casino in Milwaukee and a key supporter of the bill. “We are battling predictions on a national front. The NGIC [National Indian Gaming Commission], IGA, and others are pushing back against predictions and their capacity to offer sports betting, which we believe violates state and tribal agreements and sovereignty.”
The Seminole-Florida model enables the tribe to proliferate gaming throughout the state, including mobile sports betting. Ortiz described the system as “one of the most impactful moves in Indian Country to assert sovereignty collectively.”
If Wisconsin enacts the legislation, the 11 tribes in the state would secure exclusive rights to online gaming, managing servers and ensuring that benefits flow back to tribal communities.
“The SBA alliance, the Sports Betting Alliance, has dominated the narrative,” Ortiz remarked. “With the hub-and-spoke model, we can collaborate within the state and foster an alliance among tribes to strengthen our sovereignty.”
Tribal gaming has historically been a vital source of revenue and employment in Wisconsin. The state’s 26 tribally owned casinos have generated substantial tax revenues and provide tens of thousands of jobs. Funds generated locally support initiatives like language preservation, elder care, and natural resource conservation.
The Potawatomi Casino, owned by the Forest County Potawatomi, initially opened in 1991 as the first off-reservation casino in the U.S., aimed at elevating tribal members out of poverty. According to the casino’s website, over 70% of its workforce comprises people of color.
“This industry ensures the economic benefits of gaming remain within local communities,” Ortiz stated. “This isn’t about outside corporations siphoning profits elsewhere.”
The Wisconsin Senate is set to reconvene on March 17 to continue deliberation on the bill.