California Tribal Leaders Raise Concerns Over Rival Sports Betting Measures at G2E

Posted on: October 4, 2021, 11:05h. 

Last updated on: October 5, 2021, 04:28h.

LAS VEGAS – When it comes to sports betting measures in California, tribal gaming leaders say the more ideas that are offered, they definitely won’t be for the merrier.

California Sports Betting
California may have up three sports betting initiatives on the November 2022 ballot, and tribal gaming leaders from the state said during a panel session at Monday’s Global Gaming Expo that could undermine their efforts to get sportsbooks in their casinos. (Image: Casino.org)

Representatives from the Golden State’s tribal gaming industry spoke Monday during the first day of the Global Gaming Expo, giving their point of view on California’s sports betting situation.

Tribal entities already have a sports betting measure on the November 2022 general election ballot. But two more measures are being reviewed by state officials. Once that’s done, backers for those proposals can start circulating petitions in an effort to get before voters in 13 months.

With a population of nearly 40 million, California is, by far, the largest sports betting market in the US, which is why there will likely be fierce competition to offer the product to the public.

‘Three’s a Crowd’ for California Sports Betting

Jacob Mejia, vice president of public and external affairs for the Pechanga Development Corp., told the audience at The Venetian Expo that the state’s tribal nations have presented voters with gaming measures nine times since 1998. Eight of those passed.

The only one that didn’t succeed took place in 2004 when there were competing measures between tribal and commercial gaming interests. Neither, he said, came close to passing.

Three’s a crowd for anybody that wants to see sports wagering legalized in California in 2022,” Mejia told Casino.org after the session.

Earlier this year, state leaders certified a petition drive that started back in early 2020. Tribal gaming entities called for a statewide ballot referendum to legalize sports betting. Under their proposal, the state’s tribal casinos – provided they secure amended tribal compacts with the state – and California’s state-licensed thoroughbred racetracks would be allowed to offer brick-and-mortar sportsbooks in their establishments.

As was the case with many projects last year, the COVID-19 pandemic affected tribal leaders’ efforts to secure the nearly 1 million valid signatures from registered voters in the state needed to get their measure on the ballot. Namely, Gov. Gavin Newsom’s shelter-in-place order shut down the collection effort, though tribal authorities were able to get an extension as a result.

However, by the time county election officials finally were able to verify the signatures in May of this year, the California secretary of state announced that the measure would be included on the November 2022 ballot.

“I think if this initiative had been able to go in 2020, we’d be having a different conversation now,” said James Siva, chairman of the California Nations Indian Gaming Association.

Cardroom Proposal Gets a Hard Pass

The two other initiatives that are pending have been proposed by commercial gaming interests or their supporters.

One has been offered by leaders from California cities. That proposal would allow tribal casinos, the state’s major professional sports teams, the state-licensed racetracks, and the state-licensed cardrooms to offer sports betting. The measure also would allow the cardrooms to offer traditional card games, such as blackjack and baccarat, as long as the cardroom did not serve as the banker.

After initially proposing a 25 percent tax on gross sports betting revenues, supporters recently revised that to 15 percent. Those revenues would go toward addressing mental health, homelessness, affordable housing, and public education.

Licensees would pay $5 million initially to launch sports betting and $1 million to renew every four years.

That proposal, though, has been swiftly rejected by tribal gaming leaders, who point out that cardrooms do not have the best reputation. Mark Macarro, chairman of the Pechanga Band of Luiseño Indians, said the cardrooms are thought of as “bad actors,” and that their effort to offer what may seem like a broad-based initiative will not fool California voters.

They may try to dress it up… but you know what, you put lipstick on a pig, it’s still a pig,” he said. “That’s basically what we have here.”

The cardroom measure includes a provision that says if two or more gaming measures on the same ballot conflict and more than one passes, then the measure that gets the most “Yes” votes would be the measure enacted.

Tribal Leaders See Mixed Messages

The other measure is being pursued by Californians for Solutions to Homelessness and Mental Health Support, which is backed by seven major or aspiring online sports betting operators. Their plan calls for statewide online sports betting, with operators ponying up $100 million for a license. Tribal entities will also be able to compete, and their licenses will only cost $10 million. However, they must use the name of their casino for their apps.

Revenue from this measure would be split, with 85 percent going to fund homeless support and mental health programs across California. The remainder would find tribal economic development initiatives.

Supporters of that measure say that it does not conflict with the retail-focused proposal that the tribes have sponsored. They also say it has the support of 62 percent of voters in the state.

Tribal leaders, though, have their doubts.

So looking at it and doing the deep dive, there are elements in there that make it not just a competing measure, but a countermeasure to what the tribes have proposed. What is included in our initiative, and frankly, what is most important to the tribes, which is continuing to protect our sovereignty and our gaming exclusivity,” Siva said.

Richard Schuetz, a longtime industry executive and a former member of the California Gambling Control Commission, added that mobile sports betting is not the end goal for major operators.

That end goal is something that allegedly could not just threaten tribal entities, but the thousands of jobs and millions in funding to state and local governments they provide as well.

Anybody that thinks this is about anything other than iGaming is just wrong,” he said.

A message to a spokesperson for the sportsbooks proposal was not returned on Monday afternoon.

Concerns, Not Consensus, Over Mobile Betting

Sports betting has taken off across the country since the US Supreme Court overturned PASPA in 2018. Its growth has been fueled by mobile access. The top states by sports betting handle show that 80 percent or more of the wagers have been made on smartphones and computers.

Yet, mobile sports betting was not something that California’s diverse tribal nations, which range vastly in size and include nations in suburban and rural areas, could get behind at this time.

Macarro said there was “still a lot of suspicion statewide” about sports betting in general and what may develop from it.

But to go to the next step into mobile is… just something that’s a bridge too far for many tribes in the state,” he added.

The chairman added that he knows the major sports betting operators, whom he called “carpetbaggers,” will invest a lot of money into their campaign. He said he already hates to see the stream of sports betting ads pop up while he’s watching an NFL game.

“It’s just a glimmer of what I think possibly we’ll be seeing over the next, God help us, 13 months,” Macarro said.