While no one in Indian Country has stood up in support of a proposal by commercial operators to put the question of legal statewide mobile sports betting to California voters, changes to a proposed ballot initiative filed Tuesday suggest talks are occurring between the tribes and the seven sports wagering companies backing the measure.
In August, the consortium made up of Bally’s, BetMGM, DraftKings, FanDuel, Fanatics, Penn National/Barstool Sportsbook, and WynnBET filed the” California Solutions to Homelessness and Mental Health Support Act,” which would bring statewide mobile wagering to the biggest state in the U.S. The proposed ballot initiative requires that commercial operators gain market access through existing tribal casinos, and it does not address retail sports betting. The proposal is considered “complementary” to a tribal initiative that would allow retail wagering at tribal casinos and horse racetracks. Should the two initiatives get on the ballot, voters could approve both.
On Tuesday, shortly before the close of business, the campaign committee behind the proposal filed an amended version of the ballot initiative. It strengthens the wording in several sections to make it clear that operators (known as “platform providers) — and not tribes — will pay taxes. It also clarifies that the tribes who would apply for sports betting operators licenses, while operators would be licensed as platform providers.
Tribes could have on-reservation mobile
The idea, according to a spokesperson from the campaign committee, was to remove any ambiguity surrounding licensing. The tribes “can operate online sports betting under our measure, and non-tribal entities can access the market only through a partnership with a California tribe,” he said.
It would appear that the proposed initiative would allow for online wagering on tribal lands as well as throughout the rest of the state, and that the tribes could have a say in what sports betting will look like, rather than being silent partners of the operators — or simply points of access.
Sports betting on the California ballot: Boon or bane for Indian casinos? https://t.co/HhH1FSsCIL
— Kathryn Reed (@Kathryn0925) October 4, 2021
Other modifications include sevearl technical amendments as well as more guardrails around protecting the integrity of competitions. In addition, there are changes to how funds would be appropriated to the newly created California Online Sports Betting Trust Fund, which directs how funding will be spent.
According to the proposal, 85% of tax revenue after expenses would be directed to the California Solutions to Homelessness and Mental Health Fund to be used for “the purpose of delivering permanent and interim housing, including rental assistance, supportive services, and operating subsidies and reserves.” The funds would be earmarked for “cities, counties, and continuums of care” and would be subject to reporting standards. The new language is more specific than what was in the original version.
Operators staked proposal with $100 million
The amended proposal will remain with the Attorney General’s Office until it is assigned a title and summary, at which point supporters can begin to collect the 997,139 signatures necessary to get it on the ballot. The AG’s office has projected the title and summary will come sometime in November, and signatures must be gathered by next summer. Operators are staking the committee with $100 million, which even tribal leaders believe will enable the operators to gather the required signatures.
“We know they have already put in $100 million,” California Nations Indian Gaming Association Chairman James Siva said during a panel at the G2E sports betting industry conference in Las Vegas Monday. “And knowing who is behind this, I think they have a very good chance of qualifying.”
Siva and his tribal co-panelists, Pechanga Band of Luiseno Indians Chairman Mark Macarro and Pechanga Vice President of Public Relations and External Affairs Jacob Mejia, didn’t come out in support of the commercial proposal during the discussion, which took place before the proponents of the initiative submitted their new changes. The tribal leaders didn’t shoot down the commercial proposal either, echoing the silence with which the original proposal was met.
Macarro did say that some California tribes may not be ready for digital wagering, referring to it as a “bridge too far.” During the discussion, Siva said that after doing a “close analysis … some things in it for the tribes of California are a non-starter. It fails to protect our sovereignty and exclusivity.”
The changes appear intended to address such concerns, and sources previously told Sports Handle that the operators would not have moved forward with filing the proposal without at least some indication that the state’s biggest tribes — of which Pechanga is one — were willing to negotiate.
Voters could have a choice
A sports betting proposal backed by leaders from California cities has amended its plan by dropping the tax rate from 25% to 15%, but a state analysis said the revenue could make tax revenues exceed mandated spending limits. https://t.co/5bEoljL2vf
— Steve Bittenbender (@CasinoOrgSteveB) October 3, 2021
Should the operators’ initiative get on the ballot, it could be one of three. A coalition of cities with card rooms has also filed a proposal that would allow for wagering at tribal casinos, card rooms, and professional sports stadiums as well as allowing for banked card games at card rooms. That proposal is a hard “no” for tribes, who have long been at odds with the card rooms over gaming exclusivity.
“That’s just a Trojan horse to legalize casino-style games, and that is the threat behind that idea,” Mejia said.
In addition, if more than one initiative makes the ballot, there is a risk that none will pass. Mejia noted that tribes have put nine gaming initiatives to the people in the past, and eight have passed. The only one time the tribes lost was when there was competition on the ballot.
