Two California Sports Betting Proposals Sent to Lawmakers, Tribes Mostly Opposed

Article ByDavid Weir

October 30, 2023

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Posted in: US Sports Betting News, California Gambling News, US Gambling News

Two proposed sports betting initiatives were filed late last week with the Attorney General’s office in California. These initiatives aim to grant exclusivity to California Indian gaming Tribes for offering online and in-person sports betting in the state.

The proposals were filed by Ryan Tyler Walz and Reeve Collins. Collins is the cofounder of Pala Interactive, the online arm of the Pala Band of Mission Indians. Boyd Gaming acquired Pala Interactive in 2022.

The 40-page filing makes no reference to any particular Tribe or operation. But rumors abounded earlier this month that the Pala Band were looking at a push for California online sports betting.

Pala Interactive cofounder Kasey Thompson also sent letters to Tribal leaders that arrived shortly after the proposals were filed.

However, the moves face major opposition from other California Tribes and are on a tight schedule to qualify for the November 5, 2024, election. Previously, in 2022, voters roundly rejected the idea of legalizing online and retail sportsbooks in California.

Details of the Proposals

The first initiative, titled the Tribal Gaming Protection Act, seeks to amend the state constitution to prohibit sports wagering by any operator other than California Indian Tribes.

This would then allow the governor and legislature to negotiate a state gaming compact or compact amendment with the Tribes. The second initiative, titled the Sports Wagering Regulation and Tribal Gaming Protection Act, outlines the operational model for Tribal-led sports betting in California.

The initiatives detail a potential framework for sports betting in the state, including a proposed start date of no earlier than September 1, 2025.

Under the proposal, sportsbooks would be branded exclusively under the tribe’s federally recognized name, with commercial partners allowed. Additionally, in-person registration would be required for an online sports betting account to be opened, with the legal betting age set at 21 or over.

Professional and college athletic events would be eligible for bets, while high school or lower-level athletic events will not. When it comes to taxes, the proposed framework asks Tribes to contribute 15% of adjusted sports wagering gross gaming revenue to the Tribal sports wagering revenue sharing trust fund, and 10% to the California Homelessness and Mental Health Fund.

“Our proposal enables all California Tribes to control their own destiny and participate in sports betting however and whenever they see fit. Most importantly, our proposal prohibits all offshore and out-of-state operators from controlling sports betting in California,” Thompson wrote in the letter to state Tribal leaders.

Thompson also highlighted the significant contributions Tribal casinos have made to state revenues the past two years. Several California casino venues are among the most popular and profitable Tribal gambling operations in the U.S.

Tribal Opposition and Tight Schedule

Regardless of the sales pitch, the proposals have not been well-received by major California Tribes.

The California Nations Indian Gaming Association issued a statement expressing disappointment that Thompson did not consult with the state’s largest Tribal gaming association before filing. He was invited to speak at their general meeting last week, but did not show up.

“The California Nations Indian Gaming Association is deeply disappointed that the sponsors of the two recently filed initiatives did not first reach out to the State’s largest Tribal gaming association for consultation and input,” said Association chair James Silva.

“Instead, CNIGA and our member Tribes were alerted to their existence when they were filed with the Attorney General today,”

Moreover, the initiatives face a tight schedule to qualify for the November 2024 election. Petitioners will have approximately four months to collect the 874,641 valid signatures required to get on the ballot, a significant departure from the usual 180 days allowed for signature gathering.

Even if the initiative does get to a vote, California residents have historically not shown strong interest in online sports betting. In 2022, Proposition 27, a measure backed by DraftKings and FanDuel to legalize online sports betting for commercial entities saw just 16% of votes go its way.

However, as the largest state population without regulated sports betting, the Golden State has remained an attractive market for sports betting operators. Although they have refused to vote for a legal market, California bettors also put down hundreds of millions a year at offshore sportsbooks.