Mohegans, Pequots and goals for Internet gaming

Washington — When it comes to Internet gambling, the owners of Connecticut’s two tribal casinos agree on some things and disagree on others, differences that will come into sharper focus if Congress takes steps to regulate online betting.

Both the Mohegans and the Mashantucket Pequots expect Internet gaming to bring new revenues to their tribe. Both think establishing online gaming will popularize their brands and drive more people to their brick-and-mortar casinos.

But as Congress begins to move toward regulating the untamed world of Internet gaming — and allow tribes to participate in that world — the Mohegans and Pequots have different goals.

The Mohegans say federal legislation must ensure that tribes can compete fairly with non-Indian casinos.

“All tribes would agree that there cannot and must not be a head start for Nevada, New Jersey or other commercial casino states into the Internet gaming market,” testified Bruce “Two Dogs” Bozsum, chairman of the Mohegan Tribal Council, at a Senate Indian Affairs Committee hearing this month on Internet gaming.

Bozsum also warned lawmakers not to use “concocted formulas or restrictions under various guises of ‘consumer protection'” to keep tribes from hosting online betting games.

Chuck Bunnell, the Mohegan chief of staff, said the tribe is ready to be competitive on the Internet.

“We’re absolutely convinced we can take on the challenge,” he said.

Bunnell also said that competition from online betting “will not affect the jobs of the people who work in our casinos in any way.”

In response to inquiries from New York and Illinois lotteries, the Justice Department in December determined the Wire Act’s restrictions only apply to sports betting, not other types of online gambling. That prompted Sens. Harry Reid, D-Nev., and Jon Kyl, R-Ariz., to begin work on legislation to regulate Internet gaming.

The Mohegans want the legislation to allow only online poker.

But the Pequots say they’re ready for all types of games.

We feel that revenues from poker only won’t be big enough,” said Frank Pracukowski, director of administration at Foxwoods Resort Casino.

While the Mohegans plan to step gingerly into the fray, the Pequots say they believe that Internet gaming is gambling’s future.

Pracukowski said he wantst to attract younger players.

“The Internet introduces a new generation to gaming,” he said.

But the Pequots aren’t ready to give up on their casino near New London, which is one of the largest in the world.

To Pracukowski, Internet gaming would allow the tribe to “cross-market,” to advertize and promote the casino on the web, perhaps by offering free rooms to big winners or requiring online players to redeem their online winning “points” at the casino.

Pracukowski notes that there is plenty of gambling now on the Internet that compete with Indian casinos, from highly regulated state lotteries to shady offshore gaming operations.

“We’re not breaking new ground,” he said. “We’re just asking for regulation.”

Under a new federal law, profits from an online gaming operation would be divided among the operators — in Connecticut’s case most likely the Mohegans, the Pequots and perhaps the state lottery — and the state government.

Pracukowski said most states would welcome the games since, like Connecticut, they are in desperate need of new revenues.

Connecticut Gov. Dannel P. Malloy said he’s concerned about the impact New Jersey’s approval of Internet gaming would have on Connecticut’s Indian casinos. But earlier this month he said that “it’s highly unlikely” the issue will be debated in the state legislature this year.

I. Nelson Rose a professor at Whittier Law School in California, who is an authority on gambling law, said political considerations about the expansion of gambling may have led to Malloy’s decision to hold back support for Internet gaming — at least for now.

“It does bring gambling into the home, so it has to be done fairly carefully,” Rose said. “But the governor sees the writing on the wall.”

Rose also said federal legislation would have to allow states to opt in or opt out. Connecticut could decide it prefers to be the regulator of online betting , while other states, such as Utah, could continue to ban all types of gaming.

Rose said Congress might debate an online gaming bill this year, but is unlikely to approve the legislation.

“Everybody knows nothing like this is going to pass until after the election,” he said.

While the Mashantucket Pequots see future growth on the Internet, the Mohegans are a bit more wary, and other tribes think they’ll be entirely squeezed out of a very lucrative industry.

Since Indian gaming was allowed by federal law in 1988, revenues from tribal casinos have grown to $26 billion.

Ernest Stevens Jr., chairman of the National Indian Gaming Association, says some tribes believe online gaming is inevitable.

“But others see Internet gaming as a direct threat to the significant investments tribes have made to brick-and-mortar operations,” Stevens said.