Could California Sports Betting Be Derailed By A Florida Lawsuit?

Written By Derek Helling on July 28, 2022
Sports Betting In California Could Be Derailed Because Of A Florida Lawsuit

Big changes could be coming to US casinos in California, including the legal ability to offer both online and retail sports betting to guests.

There are countless possibilities right now for when that might begin, how it could look, and who might be involved to what extent. You could say the diverse possibilities for California sports betting are typical of a multiverse.

The multiverse is a pop culture phenomenon right now, thanks to its inclusion in the Marvel Comics cinematic series. Marvel Comics’ concept is not entirely fictional, however, as Paul Sutter of LiveScience discusses the inflation theory that had its origins in the late 1970s (per Andrew Zimmerman Jones for ThoughtCo).

The ideology is that the universe we inhabit is not the only one that exists. In that case, perhaps some of the other universes might have some parallels to our own.

This series will look at “parallel universes” in which California’s legal sports betting framework takes a certain direction. Those directions are at least theoretically possible in our own universe at this point. This first installment looks at how a lawsuit could throw a wrench into things.

Where California sports betting sits in our universe

Politically, California and Florida couldn’t be much more different. The two states do have some things in common, though, besides miles of coastline. Tribal casinos are powerful entities in both states.

In both states, those tribal gaming operations are interested in sports betting. As far as Florida goes, the Seminole Tribe‘s Hard Rock brand actually offered legal online sports betting for a short period before federal lawsuits forced them to discontinue the activity late last year.

In California, a few tribal casino operators have put Prop 26 on this year’s ballot and are pushing to get another measure on the ballot for 2024. Additionally, tribal casinos are split on support for Prop 27 this year.

While Californians wait to head to the polls this fall and perhaps again in 2024 on the issue of sports betting, Florida’s sports betting future is playing out in the courts. That could have huge implications for the same in the Golden State.

Indian Gaming Rights Act, California, and the Supremes

The Temptations were the originators of the classic song “My Girl,” which talked about having sunshine. In the future, it’s The Supremes who could cast a cloudy day on the Sunshine State. The Supremes in this context are the nine justices of the US Supreme Court. What could make them feel that way?

A current lawsuit, West Flagler Associates v. Deb Haaland, is the potential culprit. That litigation concerns the interpretation of the federal Indian Gaming Rights Act (IGRA). Last November, a federal district court ruled the compact between Florida and the Seminole Tribe violated the IGRA.

Why does that matter for California? Well, right now, it doesn’t. It could, though, and that’s where the multiversal element comes in. The implications begin if the US Supreme Court hears an appeal on the matter and concurs with the lower court’s decision.

In that specific circumstance, a peer into California sports betting’s hypothetical future reveals a sticky situation.

Think open-carry laws for alcohol

If you’re in a state with laws about where you can take an open container of an alcoholic beverage, you have some notion of how a Supreme Court ruling in favor of the plaintiffs in West Flagler Associates v. Deb Haaland could muck things up.

At issue is a clause that restricts gaming offered by tribes only to their sovereign territories. Essentially, the IGRA says tribal casinos that offer gaming legally via compacts with the United States and specific states can’t offer that gambling on non-tribal lands.

Florida and the Seminole Tribe attempted to get around that by putting the servers that accept the online wagers inside tribal casinos. They argue that the bets happen within those boundaries, even if the people placing the bets aren’t inside them. So far, the courts haven’t been on board with that theory.

A federal appellate court ruling that way and the US Supreme Court issuing a decision along those lines are two different ball games. The Supreme Court’s ruling would have nationwide implications. It would essentially mean tribal casinos everywhere in the country are limited to offering gaming on their lands only.

The fallout in the multiverse of California sports betting

Consider an alternate universe California in which the state’s voters approved a measure like Prop 27 and online sportsbooks launched all over the state, counting on a friendly interpretation of the IGRA. The moment a disfavorable Supreme Court ruling landed there, state officials and tribal casinos would begin pouring over the decision to interpret the meaning for them specifically.

Among many questions are whether the ruling meant each casino operator could only offer online betting on its own land and how likely it was that the US government would actually enforce the IGRA against them. Some tribal casino operators would also ponder whether they could essentially “team up” and form new compacts as joint entities that would give them access to more territory.

After deliberation over a number of months, the tribal casino operators involved in online sports betting in the state would decide it was not worth tempting prosecution from the US Dept. of Justice over illegal gambling and limit their online sports betting to their own territories. Betting on sports online in California once again would become illegal in most of the state.

All of a sudden, knowing where the nearest hotspot where you could drive to and place a bet on your phone would become important information. Mobile apps that point people to the nearest location would materialize, and sportsbook operators in the state would integrate some of the same functionality into their own apps.

Tribal casino operators across the country could shift lobbying resources to the US Congress, seeking a legislative fix. That would eventually come and restore statewide California sports betting. However, it would take years to do so and meet more court challenges.

So how likely is that California sports betting scenario in our universe?

Some things must be said as necessary caveats. Those are:

  • There are still many potential outcomes to West Flagler Associates v. Deb Haaland in our universe
  • This scenario would require a very specific set of circumstances playing out in just the right way
  • It’s still possible that our universe’s California could never legalize online sports betting in the first place

With all that said, this scenario is more factual than the latest Marvel Cinematic Universe release. It’s likely that either West Flagler Associates or Sec. Haaland (who is the Secretary of the Interior) will appeal to the US Supreme Court after the appellate court rules.

Some believe a “day of reckoning” is coming for tribal gaming in the United States, too. The Supreme Court would be the harbinger. Lawyers have seen the Court’s recent ruling in Oklahoma v. Castro-Huerta as an indication that it is not friendly to tribal sovereignty.

At the same time, the Supreme Court just issued a ruling friendly to tribal gaming on sovereign lands last month. That ruling didn’t concern online betting, though, and the issue of whether the IGRA permits gambling outside those territories.

Additionally, in 2019, the US House saw a bill that would have specifically authorized tribal authorities to offer online gambling outside their lands. No similar bill has surfaced since, however.

Essentially, if the Supreme Court takes up West Flagler Associates v. Haaland, all bets could be off, literally. This is just one multiverse hypothetical future for California as well. The next multiverse of California sports betting madness involves tribal casino in-fighting, Tillie Hardwick, and the definition of the term rancheria.

Photo by Shutterstock.com
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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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