California Card Rooms Say Tribal Sports Betting Initiative Would Harm Communities

California card rooms announced Wednesday they would oppose a tribe-backed sports betting initiative, believing it will harm local communities.

It comes less than a week after three California tribes launched a TV ad campaign against the national giants such as BetMGM, DraftKings, and FanDuel.

Those cardrooms announced Wednesday they would oppose a tribe-backed initiative – the only measure approved for Nov. 2022 ballot so far. If approved by voters, California sports betting would see retail-only betting at the state’s tribal casinos.

Last year, the card rooms filed for their own sports betting initiative, but their efforts appear to have failed to collect even 25% of the signatures. In mid-December, the card rooms sued the California Secretary of State, arguing that a tribal initiative is inconsistent with the state law.

Four cardrooms raised over $14 million combined to the opposition effort.

What Do Cardrooms Say?

Cardrooms want legal sports betting in the Golden State but are opposed to the tribal initiative for reasons specified in a press release distributed Wednesday. The release said that the tribal initiative would harm local communities, arguing that changes to the law would give the tribes more power to sue the cardrooms for offering certain types of games.

According to Marcel Rodarte, executive director of the California Contract Cities Association, the tribal initiative would exploit the Private Attorneys General Act. It would put “more than 32,000 jobs, $1.6 billion in wages, and $5.5 billion in total economic impact at risk,” the release said.

The tribal initiative is the only one of four approved for Nov. 2022’s ballot. The other three – including one by the national operators – push for both retail and mobile betting. However, all three still require more signatures before qualifying for the ballot.

How Did Tribes Respond to Card Rooms?

In response, the tribal coalition has lashed out at the card rooms for their own dubious record of violations of the law, which led them to pay millions of dollars in fines in recent years.

The Coalition for Safe, Responsible Gaming immediately issued a statement, saying the card rooms “have one of the worst records… of noncompliance in the nation with gambling laws,” including those formulated to guard against crimes like money laundering.

The tribal coalition then reassured the card rooms observing the law have nothing to worry about and stated that their measure aims to ensure existing laws preventing illegal gambling are being followed.

The tribal response further soothed the card rooms by adding that the initiative would not shut down a single card room casino that is operating legally. “The only card room casinos at risk of legal enforcement are those that repeatedly violate California gaming laws.”

What Are the Chances of the other Initiatives?

Three other initiatives seek to collect nearly one million signatures by the end of June – a hard target to achieve.

The initiative backed by cardrooms appears dead due to lack of action. It would seek a competitive online California sports betting market, including card rooms and tribal casinos, in addition to sports teams and horse tracks. But the card rooms have not managed to get even 25% of the required signature.

A second tribal initiative has collected 25% by early March.

The most formidable initiative is the one backed by national sports betting giants, which has crossed the 25% threshold in January. The companies, including BetMGM, DraftKings, and FanDuel, have combined to push for California sports betting with a $100 million initiative.

Earlier this week, three of the tribes launched a TV ad campaign against the operator-led online sports betting initiative. The tribes committed $100 million to keep the “out-of-state” companies away from California sports betting.

Currently, there are no legal sports betting options in California. But a state with 40 million and more professional sports teams than any other state, the Golden State could become the largest market for online sports betting in the nation.