A coalition of California Indian tribes was remarkably close to the threshold of signatures needed to get its sports betting referendum on the November ballot when Gov. Gavin Newsom put the state on lockdown to battle the spread of COVID-19 on March 20. And now the tribes are suing for the right to finishing collecting those signatures — for the 2022 ballot.
In a lawsuit filed June 9 in Superior Court of the State of California in Sacramento, the Coalition to Authorize Regulated Sports Betting argues that it had collected 971,373 signatures in just eight weeks. Per the state attorney general’s office, the tribes need 997,139 signatures to get the measure on the ballot and were required to collect 110% of needed signatures, or 1,096,853, by July 20. The higher number is because referendums are verified, and some percentage of signatures are usually void. Initiatives have to be approved 180 days before the election, which would be June 25, and the tribes can’t possibly collect the remaining signatures and have them verified in the next 10 days.
California has been under some level of “lockdown” since March 20, with gatherings still prohibited and six-foot social distancing measures still in place,. Those make it challenging, at best, for anyone to collect signatures for a ballot initiative. Those signing are required to use a pen and provide identification, both of which require close contact. In addition, according to the lawsuit, signature verification workers have not been working because that work is “typically done in small, rented offices that do not meet the social distancing requirements.”
The tribes asked that the signature deadline be extended and that current signatures be considered valid in order to prevent the tribes from having to start over for 2022.
Sports betting in CA budget?
California has been a hotbed of sports betting discourse this month. The state Senate is moving its own referendum through Sacramento, and it should be on the Appropriations Committee agenda for a vote on Thursday. The tribes are vehemently opposed to the legislative proposal and have voiced their concerns at several hearings.
And Monday, state lawmakers and the governor must approve a 2020-21 budget. The sides are at odds over multiple issues, but if the legislative budget is approved, it could include a mention of sports betting revenue.
The tribes were the first to make a move toward legal sports betting when in November the coalition got approval to gather signatures for the ballot initiative on Jan. 20. The one-page initiative reads, in part:
AUTHORIZES NEW TYPES OF GAMBLING. INITIATIVE CONSTITUTIONAL AND STATUTORY AMENDMENT. Allows federally recognized Native American tribes to operate roulette, dice games, and sports wagering on tribal lands, subject to compacts negotiated by the Governor and ratified by the Legislature. Beginning in 2022, allows on-site sports wagering at only privately operated horse-racing tracks in four specified counties for persons 21 years or older. Imposes 10% tax on sports-wagering profits at horse-racing tracks; directs
portion of revenues to enforcement and problem-gambling programs. Prohibits marketing of sports wagering to persons under 21.
Millions spent on signatures already
The tribes contend they spent $7 million to gather signatures so far and are entitled to an extension of the deadline in order to finish collecting them.
“The will of almost one million voters who signed the Initiative petition will have been frustrated,” lawyers for the coalition wrote in the lawsuit. They also request an expedited reply.
The coalition, which includes representatives from the Agua Caliente Band of Luiseno Indians, Barona Band of Mission Indians, Pechanga Band of Luiseno Indians, and the Yocha Dehe Wintun Nation, contends it would have been finished collecting signatures by the end of April had COVID-19 not interfered. It was collecting an average of 100,000-120,000 signatures per week.
The tribes had collected 25% of needed signatures, which were certified by the state, by February. As of June 15, the initiative was one of 29 proposed listed as “active” on the state attorney general’s website. According to the site, no referendums have been approved for the November ballot.
As the tribes await an answer on whether or not they can collect more signatures, Sen. Bill Dodd and Rep. Adam Gray are pushing their own version of sports betting through the state legislature.
Tribal proposal vs. legislative proposal
The key differences between what the tribes want and the lawmakers want are:
- Tribes want on-site sports betting only; lawmakers want to extend that to mobile/online sports betting;
- The tribal referendum does not include a tax rate for Indian sportsbooks, but would impose a 10% tax on retail sports betting at horse racetracks; lawmakers included a workaround, requiring tribes to contract with commercial operators, who would be taxed at 10-15% of gross gaming revenue;
- Tribes do not require use of “official league data”; the legislative bill does;
- Tribes believe card rooms operate illegally in the state and the referendum allows for “private lawsuits to enforce” state gambling laws and protect their gaming exclusivity; the lawmaker version would put an end to the lawsuits and allow card rooms to continue to operate in the current fashion.
“While tribes like Yocha Dehe Wintun Nation support sports betting in California, tribal leaders are not willing to sacrifice the good-will of their guests and neighbors in order to get it.” https://t.co/F2o3uP6FJA
— Victor Rocha (@VictorRocha1) June 5, 2020
Both referendums would also allow for sports betting at four horse racetracks and promise more money flowing into state coffers, though the estimates are wildly different — the fiscal note on the proposed tribal referendum suggests the state could bring in “tens of millions” of dollars. On the flip side, lawmakers have suggested that their version of sports betting could bring in $500 million tax revenue annually.
A complete legislative fiscal analysis is not yet available, but according to the initial version, it will cost approximately $500,000 just to get an initiative on the ballot.