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For most of the past 15 years, California Indian tribes haven’t seen the need for urgency to move toward internet gaming.
That narrative is beginning to change.
Speaking on a panel at the Indian Gaming Tradeshow and Convention in Anaheim, California tribal leaders said they do feel an urgency to move gaming online. However, they also said it is paramount for all to take the time to do it right.
Online gaming discussions among tribes started 15 years ago with online poker. Now it focuses on online sports betting.
But tribal leaders know the model they develop for online sports betting will set the stage for California online casinos. And that’s why they see a need to be careful.
“We still think that not only does online sports betting have to be for every tribe, but we better be in that driver’s seat, and we better control our destiny because it’s going to eventually lead into iGaming,” said Johnny Hernandez Jr., vice chairman of the San Manuel Band of Mission Indians. “And if iGaming comes online and tribes don’t control it, guess what, brick and mortar is going to go away, and tribes are going to be back into potential poverty. We can’t stand back and let that happen.”
Urgency centers around improving conditions for rural tribes
Failed commercial efforts for online sports betting in the state over the past few years have helped spotlight a major issue among California tribes.
When tribal casino gaming launched in California nearly 25 years ago, tribes in a position to be successful in gaming pledged to contribute to a revenue-sharing trust fund (RSTF) to lift tribes with reservations away from population centers.
The 72 RSTF tribes each receive $1.1 million annually. That figure hasn’t changed since the fund’s inception despite the increase in tribal gaming revenues.
Many RSTF tribes want more help and see online sports betting as a possible solution. That is why three tribes supported Prop 27 in 2022. Then late last year, former Cahuilla Band of Indians Chairman Daniel Salgado told PlayUSA four tribes supported a proposed 2024 initiative, later withdrawn by commercial interests, that would have given 25% of online sports betting revenue to RSTF tribes.
Revenue sharing certain to be part of CA sports betting model
Salgado sees an urgency to bring California gaming online, and he is organizing RSTF tribes to put pressure on the process.
“We want to provide for RSTF tribes. And my thing has been how long do we continue to allow those conditions to be going on when we have a potential solution out here that fixes a lot of those problems? How long should those RSTF tribes continue to suffer while we try to figure out what that looks like?”
Salgado, who has formed the Revenue Sharing Trust Fund Tribes of California to advocate for rural tribes, was on the panel with members of three of the most successful tribes in the state in Hernandez, Morongo Band of Mission Indians Vice Chairman James Siva and prominent Pechanga Band of Indians member Victor Rocha.
Although they represented tribes at the top, they all spoke of their desire to help RSTF tribes with online gaming.
Siva said:
“I do think Daniel nailed it with the term urgency. Not so much pressure, but we do understand there is an urgent need to do this. But also we built this industry up over the last 30 years from nothing. While we do have that urgency, we still need to make sure that we tread carefully so that we do this right. Because right now, at this time, the wrong step, the wrong mistake, can bring everything we built crumbling down.”
San Manuel proposed an online sports betting initiative that failed to qualify for 2022 that included 15% of tax revenue for RSTF tribes. As California tribes work to figure out a model for California online sports betting, revenue share to lift California’s limited- and non-gaming tribes will be a major part of it.
“My goal is to provide a meaningful amount to the RSTF tribes, understanding that the more we can provide, the greater the impact,” Hernandez said. “Taking those kinds of principles into developing whatever it looks like going forward, we need to develop a model that provides the greatest amount of impact, meaning the greatest amount of revenue, and what does that look like.”
California online gaming timeline: Wait and see
Earlier at the Indian Gaming Convention, Siva took part in a discussion with FanDuel CEO Amy Howe. While Howe said all the right things about letting tribes take the lead on working out the details for California sports betting, Siva knows online gaming companies want to see this happen sooner rather than later. And he doesn’t care.
“They’re all waiting and, you know what, they’re going to have to continue to wait. When we have our timeline, we’ll let you know.”
Salgado said he thinks the tribes could be ready to file a consensus initiative for 2026.
“As soon as we all come together and figure out a model that works for us, I think things will start to domino effect and get into play really quick. But I feel the urgency, I feel the pressure. Because I see those third-world conditions going on our reservations right now – no water, no electricity in some of the homes, no food. That’s here in California.”
Everyone on the panel stressed tribal unity as the key to finding a solution to bring gaming online in a way that boosts RSTF tribes.
“It has to benefit all tribes and we have to be unified on how we do that,” Hernandez said. “If we break up and we scatter … I think if you look at the commercial operators and what they did in 2022, they tried to divide tribes. They got the three RSTF tribes on their side. Meanwhile, there’s some truth to that [RSTF tribes being underfunded]. Unfortunately, it’s not an easy fix. But if you divide tribes, we’re all doomed to fail.”
Rocha said tribes need to move forward into online gaming in a safe, thoughtful way because they can’t afford to screw this up.
“If we screw it up, we don’t get a second shot at it. So that’s where the caution comes from. … We’re not doing it because we can and we don’t want it. We do want it. We just need to be cautious. That’s been the message from CNIGA, that’s been the message from San Manuel, that’s been the message from Pechanga and the rest of the tribes that are out there. We want to do it but we know we have to be more cautious than the commercial guys. We need to be more cautious than the government. You saw what we did with gaming, and we want to make sure that for the next 25 years we have the same thing with online gaming.”
You can keep track of California and other US online gaming legislation through our online casino bill tracker.
