Serious talks have begun in the city of New York about potentially bailing commercial casinos out of the debts they’ve racked up over the years trying to compete with their tribal contemporaries.

The New York State Gaming Commission has started to review the possibility of helping their local casino operators to somehow bring down the tax rates to a more manageable level, or increase the ones charged to tribal casinos.

According to federal law, Native tribes are given a very special deal in terms of running offline casinos in various states. In some cases, not only do tribes have massive tax rate cuts on their operations, but also represent the only legal option of running a casino.

This means that some states, especially in the East have casino monopolies controlled by native tribes, which is understandable due to moral implications on the deals struck between local governments and the tribes.

However, the struggle that New York commercial casinos had to face over the years have brought the fairness of these laws into question. While tribal casinos pay 25% tax on slots income and sometimes no tax on table games, commercial casinos could be charged up to 45% on slots and 10% on table games.

This creates a serious disparity in the income level of two entities, leaving one at a massive disadvantage.

However, according to some lawyers and industry experts, the tribes are also under restrictions as they can operate casinos only on their officially recognized land. When it comes to commercial casinos, as long as it’s legal in the state, they can operate pretty much anywhere they want, thus giving them an edge of being located much closer to urban areas.

Lawyers could challenge the NYSGC’s decision

Although the NYSGC has not confirmed nor denied their involvement in the investigation and overlook of potential amendments in the tax laws for commercial casinos, several tribal casino lawyers have already commented on the fact that this is a well-hidden and designed bail-out.

According to Joel Barkin, the Vice President of Communications of the Oneida tribe, letting this motion pass would be a violation of the deals struck with tribal leaders in the past.

The reason described by Barkin is that the tribes themselves had to sacrifice quite a lot in terms of income and rights to earn their position in the industry.

Considering the funds they manage to enable young tribe members to go to universities once of proper age could be considered in these costs. But by all accounts, these ventures are completely private decisions.

Overall, the law side of a bailout would be a serious issue for the NYSGC, they’d most definitely get sued by multiple tribes for violating past agreements, thus face much more costs than bailing out local commercial casinos. However, if the benefits outweigh the costs, we could see New York as another hotspot for gambling in the USA.