It turns out the San Manuel Band of Mission Indians, one of the biggest and most influential tribes in California, is the might behind the latest gaming proposal in California. The tribe’s involvement was revealed Friday when its logo appeared on the letter requesting a title and summary for statewide mobile sports betting initiative from the California attorney general’s office. News of the initiative broke a week ago when a letter from the Rincon Band of Luiseno Indians, Federated Indians of Graton Rancheria, and the Federated Indians of the Wilton Rancheria came to light. At that time, the San Manuel Tribe wasn’t involved, at least not publicly.
In the letter, the three tribes sought comment and support from other tribal nations for a ballot initiative that would give Indian Country control of gaming expansion in the country’s biggest state. A tribal initiative that would legalize retail wagering only at Indian casinos and four racetracks has already qualified for the November 2022 ballot, while two others — one each backed by the state’s card rooms and national commercial operators — are currently in the signature-gathering process.
To get on the ballot, California initiatives must be qualified by June 2022 and require 997,139 signatures. The three tribes expressed concern in their letter that time was getting tight to get through the process and suggested they would file an initiative within two weeks. From the date the proposal was filed — Nov. 5 — it could take up to 65 days for the attorney general’s office to issue a title and summary before the tribes could begin gathering signatures.
The addition of San Manuel to the effort means the tribes have a major player on board. The tribe owns a massive gaming complex in San Bernardino Country, about an hour from Los Angeles, and employs 4,200 people, making it the 10th biggest private employer in the county.
Revenue would benefit homelessness programs
The latest proposal does resemble the proposal from seven commercial operators in that it includes the word “homelessness” in the working title and earmarks funds to solve California’s homeless struggles. The operators’ initiative, the “California Solutions to Homelessness and Mental Health Support Act,” doesn’t even mention sports betting in the title, and would send 85% of tax revenue projected to be in the hundreds of millions per year toward helping people secure housing. The tribal proposal, titled the “The Age-Verified Tribal Online and In-Person Sports Wagering & Homelessness Solutions Act,” would require that 10% of gross gaming revenue be funneled to the state’s Homelessness and Mental Health Fund, while another 10% would be earmarked for the Tribal Sports Wagering Revenue Sharing Fund.
The fourth sports betting initiative angling for California's 2022 ballot has been submitted to the AG's office. This is the second initiative w/backing from the tribes, who oppose one backed by card rooms and another by online gaming groups.https://t.co/E8OL1sR46o pic.twitter.com/lFSYZ7paFA
— Rob Pyers (@rpyers) November 5, 2021
The proposal includes retail sports wagering and an expansion of gaming similar to what’s in the tribal ballot measure that has already been approved. It seems unlikely that the state’s tribes ultimately want to finance two lobbying efforts to get wagering legalized, so there is a possibility that if the newest initiative gets on the ballot, the first one would be withdrawn. The new tribal proposal does have a “conflict” clause, which states that if another initiative that allows the same type of expansion is on the ballot (which one already is), and the new initiative gets more votes, it will be implemented and the other will not.
No matter what, the tribes will have to be prepared to spend much more than the $20 million that financed the retail-only signature-gathering effort, as commercial operators have already committed $100 million to their effort. Sources have said the operators will double that, if needed, to win in California.
Operators view California, with a population approaching 40 million, as the most desirable market to enter. To that end, the seven entities behind the commercial proposal — Bally’s, BetMGM, DraftKings, FanDuel, Fanatics, Penn National/Barstool Sportsbook, and WynnBET — say they’ve had ongoing talks with some tribes, that they would not have moved forward without believing that they had some tribal support, and pitched being tethered to tribal casinos. The proposal was later amended to include language that better suited the tribes, yet California’s Indian Country still didn’t think it was being heard, thus the fourth proposal.
As is already the setup in multiple other tribal gaming states, the proposal allows that any bet placed in the state must run through a server on tribal land, meaning that a digital bet placed in, say, downtown San Diego on a mobile device would go through a server on tribal land somewhere in the state and be “deemed” to be on tribal lands. That model is up and running in Florida.
California Politics: A sports betting showdown in 2022 https://t.co/BNUInidwot
— Los Angeles Times (@latimes) November 5, 2021
A review of the details
The filed language looks very similar to what was included in the letter circulated among tribes. The proposal also includes a “Model Form of Sports Wagering Compact Amendment.” Tribes that choose to execute the amendment are not required to negotiate with the state. Should the initiative proposal pass, the model amendment is deemed executed by the governor and ratified by the legislature.
The Initiative would legalize wagering off tribal lands throughout California so long as bets are placed through a server located on tribal lands.
Below are some of the details that would be included in the new law:
- Promotional deductions would be capped at 15% annually.
- In-person registration would be required for mobile sports betting accounts.
- One mobile skin per casino would be permitted.
- Digital platforms would have to be branded with the casino name or a “wholly owned subsidiary,” which means Californians are unlikely to see the “DraftKings” or “FanDuel” brand most prominently on a platform, though either could run one.
- A hub-and-spoke model could be in place within Indian Country, so that tribes not offering wagering could partner with those that do so.
- Tribes could launch wagering on or after Sept. 1, 2023.
- The legal gaming age would be 21.
- Advertising to minors would be prohibited.
