May 29, 1997 in Nation/World

Tribe Puts Lottery On Internet Coeur D’Alenes’ Web Site Open For Limited Playing

By The Spokesman-Review
 
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Copyright 1997, The Idaho Spokesman-Review

With its phone-in National Indian Lottery tied up in court, the Coeur d’Alene Tribe is taking its lottery worldwide on the Internet.

“We’d be the first Indian tribe, and we’d be the first anybody, to do this,” David Matheson, Coeur d’Alene tribal gambling CEO, said Wednesday. “There are some offshore outfits that are kind of fly-by-night. … We would be the only legally authorized and regulated gaming on the Internet.”

The 1,500-member North Idaho tribe has done its legal research and says its compact with the state of Idaho specifically allows it to run a national lottery using telecommunications.

“We’ve been told by the National Indian Gaming Commission that we are the only tribe with a compact worded the way that it is,” Matheson said. “Our compact and our management contract together lay out a national lottery concept.”

That management contract, with Unistar Gaming Corp., has been approved by federal Indian gaming authorities.

The Internet lottery, dubbed “USLottery,” has been tested for the past month and opened to limited playing last week. It started off with invited players, but Matheson said the word soon got out.

“They get our 800 number, and we tell them, ‘Yes, you can play.”’ Parts of the online lottery still are under construction, but players can call the tribe for a compact disc to allow them to see the graphics for scratch-offs, Lotto and other lottery games. Then they set up a credit card account and can log in any time.

The system won’t accept registrations from states that don’t have lotteries.

“It was our own judgment to respect the policy of various states that have declined to offer any gaming to their residents,” Matheson said.

Under its compact, the tribe must donate 5 percent of its gaming proceeds to education. So far, that’s meant donations to the local schools. But if the Internet lottery takes off, Matheson thinks the tribe could pull in $200 million in profits a year.

That would mean $10 million a year for public education in Idaho.

The Coeur d’Alenes also plan to donate another 5 percent of their profits to the 200 or so Indian tribes across the country that don’t have gambling operations.

“It’s just an act of charity,” Matheson said. “We wanted to reach out, remember where we came from, and help them.”

It’s easy for the Coeur d’Alenes to remember what it was like before gaming. It hasn’t been long.

In 1993, the tribe had 55 percent unemployment. Now, the number is down to less than 15 percent.

Its Tribal Bingo Casino at Worley, where customers flock to play bingo and video machines that are similar to slot machines, made $8 million in profit last year.

Matheson said the tribe expects legal challenges from states, but “we’re very certain that we are legally correct.”

Missouri Attorney General Jay Nixon filed a motion to keep the Coeur d’Alenes from taking bets from Missouri residents over the Internet. The lawsuit filed in Jackson County Circuit Court names the tribe and UniStar as defendants. “Online gambling businesses need to stop telling Missourians that it is legal to market or operate these games in this state,” Nixon said in a news release.

However, I. Nelson Rose, a Los Angeles law professor and expert on gambling law, said the Coeur d’Alenes may have a good case. “The tribes are in much better position legally than private operators.”

Much of the debate over Internet gambling so far has centered on private firms, with some using offshore locations to broadcast casino games that would be illegal inside the United States.

A quick Internet search Wednesday turned up the Internet E-Mail Lottery, which advertises that it’s legal because players don’t purchase tickets (they see ads instead); CyberLottery, a lottery ticket broker for national lotteries in Canada, Australia, Spain, Ireland and England; and InterLotto, a lottery based in Liechtenstein that tells players they can use their local credit cards to play in Swiss francs.

Idaho Gov. Phil Batt was intrigued by the tribe’s idea when tribal officials presented it to him Wednesday morning, but he made it clear that he’s not fond of gambling.

“He listened to their concerns, but he did not take a position on it,” said Batt’s spokesman, Frank Lockwood. “The governor’s position, and the law, is that anything the state can do, the tribe can do as well.”

Batt has raised no objection to the call-in national lottery, saying the concept is consistent with state law.

Matheson said that when it came to the Internet version, “We wanted him to hear it from us first.”

The Coeur d’Alenes have spent more than $14 million so far on the call-in and Internet lotteries, “and haven’t really taken in a nickel,” Matheson said. “That’s getting old real fast.”

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