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Not all California Indian tribes oppose a sports betting initiative filed ahead of the 2024 election.
PlayUSA heard from four California tribes that view the proposed sports betting initiative as an important step toward improving conditions for rural tribes. Representatives of the Cahuilla Band of Indians, Karuk Tribe, Blue Lake Rancheria and Chicken Ranch Rancheria contend the initiative would substantially increase the standard of living in some of California’s poorest communities.
Outgoing Cahuilla Chairman Daniel Salgado, who is taking the lead in organizing an association representing economically disadvantaged California tribes, explained:
“I support the initiative in its amended form and I’m going to look to get other tribes in California, and as many Californians as possible, to support it. Californians need to know that two-thirds of California tribes are struggling. We’re not the Indians they see on billboards. We’re out in the trees, we’re out in the hills, we’re out in the desert, we’re out in the rural areas that aren’t commonly visited and we’re out there trying to survive. This initiative finally gives us a meaningful revenue stream to not only survive but thrive.”
As amended, the initiative taxes online sports betting at 25% and adds that money into the Revenue Sharing Trust Fund. Currently, 72 tribes draw $1.1 million annually from that fund. If the sports betting initiative passes, Salgado expects each RSTF tribe to get an additional $15 million annually.
The tribal leaders are making their position known after feeling it was not represented in a unanimous vote by the California Nations Indian Gaming Association (CNIGA) to oppose the amended initiative.
“These four tribes support the initiative and there’s more like us out there,” Salgado said. “You’ll hear more about them as we move forward.”
Background of CA tribal Revenue Sharing Trust Fund
When California tribes sought to amend the state constitution to allow for Indian casino gaming with Prop 1A in 2000, tribes with lands located away from population centers supported the proposal because they were promised a share of the revenue.
Annual payments of $1.1 million from the RSTF to rural tribes haven’t changed in more than 20 years, while California tribal gaming has grown exponentially over that time.
Tribal governments offer many of the same services as local governments without the tax dollars to support them. Most of their government funding comes from gaming. Salgado explained that many limited- and non-gaming tribes struggle to provide services to their members on the current gaming revenue share.
“We have third-world conditions on our reservations. We have no public water, no public sewers, we don’t have gas, our electrical infrastructure has limited capacity. If there’s a fire locally, high winds, or a public safety power shutoff event and they turn off our electricity, it turns off our water because we’re 100% on well water.”
California tribes have discussed possible solutions for years. But it’s difficult for tribes to divert funds currently going to their own governmental services and tribal members to increase the RSTF.
As a new revenue stream, online sports betting could increase the RSTF without affecting current tribal gaming revenues. And RSTF tribes believe it makes sense for them to get a larger portion of online gaming revenue, given that the nature of online play offsets the historical disadvantage of their rural locations.
Larger gaming tribes have proposed RSTF increases through sports betting measures. When the San Manuel Band of Mission Indians, Rincon Band of Luiseno Indians and Wilton Rancheria filed a tribal online sports betting initiative at the end of 2021, they included 15% of revenue to RSTF tribes. The Pechanga Band of Indians and its supporters also suggested they would include additional revenue share in compacts resulting from in-person sports betting initiative Prop 26.
Why CA sports betting initiative appeals to some tribes
Salgado campaigned last year to get the San Manuel initiative on the ballot. He held signature gathering at Cahuilla Casino Hotel in Anza, a census-designated desert community in southern Riverside County.
Originally filed for the 2022 ballot, San Manuel and its partners instead submitted the initiative for 2024. However, the proposal failed to get enough valid signatures to qualify. Voters defeated Prop 26, a sacrifice of the tribal campaign opposing Prop 27, an online sports betting initiative backed by out-of-state sportsbooks.
Salgado expected tribes to file a sports betting initiative with RSTF funding for 2024. But facing bleak polling in the aftermath of the acrimonious 2022 campaign, tribes opted not to pursue a ballot measure.
A surprise party emerged to fill the void, using the San Manuel initiative language as its basis. Kasey Thompson and Reeve Collins of Eagle 1 Acquisition Co. back the initiative. Collins and Thompson previously partnered with the Pala Band of Mission Indians to found Pala Interactive, sold to Boyd Gaming for $170 million in 2022.
Salgado was happy to see another party file the initiative previously supported by many tribes. He worked with proponents on behalf of RSTF tribes to increase revenue share from 15% to 25% in the final language.
“Think about running a whole government and providing all the essential services needed by members of your community on $1.1 million,” Salgado said. “You can’t, it’s impossible. But $15 million is a step in the right direction. And getting tribes a good steady flow of income becomes more than just the $15 million. We can then leverage that to get conventional lending and have a greater impact on our reservations today, providing much-needed essential utilities that we’ve lived so long without.”
Countering message of unanimous tribal opposition
Up until now, California tribes have presented a unanimous front in strong opposition to the initiative.
Following a Zoom presentation by Thompson to CNIGA membership, the association conducted an initial 18-0 vote to oppose the proposal.
Last week, CNIGA announced a voice vote on the amended initiative with 37 members present. All opposed with no one registering dissent or opposition.
However, there is a segment of California tribes that doesn’t agree with the CNIGA vote and has been working with proponents.
“This provides that meaningful impact to RSTF tribes that we’ve all been talking about, and it provides a benefit to the large gaming tribes as well,” Salgado said. “They’re going to be able to offer craps and roulette, and they’re going to be the online sports betting hub tribes.”
Stances taken by CNIGA are often considered the official position of California tribes. CNIGA has 52 tribal members, making it the largest trade association representing tribes in the state.
“CNIGA doesn’t speak for all 110 tribes in California,” said Salgado, who serves as CNIGA Secretary. “That vote didn’t represent our opinion on the initiative, which we think benefits Indian Country. CNIGA is primarily made up of gaming tribes and represents only a small portion of RSTF tribes. That’s why I’m putting together an RSTF association to voice our opinions.”
Creation of RSTF tribal advocacy association
Salgado is in the final stages of launching an association, RSTF Tribes of California, to promote tribal sovereignty and increase revenue to economically disadvantaged tribes. He sees the sports betting initiative as the key component to increasing revenue.
“The voice of RSTF tribes hasn’t been heard for years,” Salgado said. “Rather than advocating for one tribe, I will now fight for the needs of the 72 RSTF tribes, making sure our message is heard in the governor’s office, congressional offices, and the state Assembly and Senate.”
Salgado said the 10 founding tribal leaders of the RSTF Tribes of California have been meeting for the past several months to put together articles of incorporation, bylaws, a board and other required setup documents. He plans to file the paperwork to formally establish the organization early in the coming year.
Supporting the sports betting initiative won’t be a prerequisite for RSTF tribes to join. But the association’s top priority is increasing RSTF funding, and the tribes involved in organizing the association see the sports betting initiative as the best and quickest way to reach that goal.
Salgado arranged for three tribal leaders taking part in formation of the RSTF association to provide quotes on their support of the initiative.
“Californians need to know that two-thirds of California tribes live in very rural, isolated areas and struggle to meet the basic needs of their tribal members or provide necessary services for their communities,” said Russell “Buster” Attebery, chairman of the Karuk Tribe, with territory located in Klamath National Forest at the northernmost edge of California less than 40 miles from Oregon. “It is a proven and documented fact that tribes, by exercising their sovereignty, can build an economy that makes communities around them stronger, which in turn makes California stronger.”
Getting tribes to trust proposal from outsiders
Proponents have pledged not to move forward with putting the sports betting initiative on the ballot without support from a majority of California tribes.
Following the CNIGA vote to oppose the amended initiative, the association and 28 individual tribes sent a letter to proponents asking them to withdraw their proposal.
Eagle 1 must decide whether to spend money collecting signatures to qualify for the ballot by Jan. 2. Tribes on the letter, including those that spent the most money to defeat Prop 27, expressed that they would run an “aggressive campaign” against the initiative if it were on the ballot.
Salgado hopes to change their minds. He believes the initiative received a cold reception from California tribes because it was offered by unknown parties with mysterious commercial interests.
“If it’s something you can truly support, who cares about the face or who put it out there into circulation? A RSTF tribe just doesn’t have the money to put an initiative on the ballot and get it through to the finish line. So, the idea that it has to be borne by a tribe and authored by a tribe and led by a tribe isn’t true nor our reality. It just has to align with our principles and provide a meaningful benefit to the poor and impoverished tribal communities.”
And if an outside party wants to pay the way to its passage, all the better.
“There’s a lot of fallacies out there about this initiative,” said Lloyd Mathiesen, chairman of Chicken Ranch Rancheria. “It’s not a hijacking of the previous language. This language is what many tribes supported two years ago. And now it’s even better with a little more to RSTF tribes.”
Addressing plan to transfer offshore online gaming assets
Eagle 1 isn’t offering to fund initiative passage merely to benefit tribes. Proponents have a plan to make money from California sports betting by facilitating the transfer to tribes of a large portion of the offshore sports betting market currently operating illegally in the state.
The CNIGA letter criticized this proposal as an attempt to legitimize illicit offshore operations while putting at risk the reputation tribes have as responsible gaming operators in California.
This is where Salgado hopes to make progress in educating tribal counterparts.
“I don’t get why there’s so much opposition to it. Nothing can happen unless tribes approve it through gaming agencies and state regulators do as well. If people are truly afraid of that, when reviewing applicants for licenses, they can weed out who they don’t like. As we all look to legalize sports wagering in California, I believe everyone’s goal is to drive out the black market so Californians can safely place bets at licensed and tribal-state-federally regulated platforms.”
Initiative language doesn’t require the transfer of assets from the unregulated market. Nothing in the initiative requires a tribe to use any particular platform or funding source.
“If you supported this language two years ago, why not today?” Salgado said. “There’s a lot of misinformation being put out there about details that are not in the initiative. Indian Country is being preached a sermon, being told what this is, but we have to look at what’s really written in the initiative and educate ourselves. My task is to go out and spread the facts so people can make an informed decision.”
Why 2024 CA sports betting initiative isn’t Prop 27
Prop 27 got support from three rural California tribes. Cahuilla was among the bulk of tribes that opposed the measure.
Tribal opposition led to Prop 27 getting approval from just 17.7% of voters, the 11th-worst initiative defeat in state history.
Salgado was one of the tribal leaders who publicly campaigned against Prop 27. He explained why he believes this initiative is different for tribes.
“Prop 27 wasn’t a good initiative. It didn’t have the RSTF tribes in mind. It had a 10% tax, only 15% of which might have gone to RSTF tribes. Essentially, that was only 1.5% going to RSTF tribes. Here it’s 25%. It also didn’t work for tribes because we wanted to maintain our brands, our image and who we are.”
Tribes originally developed the language in the current initiative as a counter to Prop 27, maintaining tribal sovereignty and control of California gaming.
“We are very appreciative that California voters heard our pleas last year to oppose Prop 27 because it wasn’t good for poor tribes,” Salgado said. “We said we would come back with a solution that works for us and this initiative is that solution. In 2024, we are asking Californians to side with the economically disadvantaged tribes and support this initiative.”
Not all tribes can afford to wait on sports betting
Some California tribes are fine waiting forever on online sports betting. But other tribes don’t feel they can wait another two or four years.
“As one of the RSTF tribes, I can tell you we have all these conditions on our reservations that can’t wait until 2026, can’t wait until 2028,” Salgado said. “We have something on the table right now that works for everybody and addresses the real needs we face today as the 72 most poor and impoverished communities here in California.”
However, Salgado faces an uphill battle turning around the narrative of tribal opposition to the initiative, starting with the RSTF tribes.
“My goal is to get as many of the RSTF tribes to support it as possible, but also the gaming tribes as well. After tribes — whether large gaming, small gaming or non-gaming – look at it and see what’s written in black and white, I know they’ll see something they can all rally behind. I truly believe it.”
The proposed sports betting initiative has no chance if large gaming tribes spend more than $200 million opposing it as they did Prop 27.
These four tribal leaders hope to convince large gaming tribes that this isn’t Prop 27. That, regardless of who introduced the initiative, it’s language developed by tribes to protect tribal sovereignty, maintain tribal control over California gaming and boost economically disadvantaged tribes.
“I think Californians want to support the California Indians, they just need to know the best way to do it,” said Jason Ramos, CEO of tribal business enterprises for Blue Lake Rancheria. “They approved Prop 1A over 20 years ago and allowed California Indians to have some success in gaming. That helped one-third of California tribes. This is the next step in providing that benefit to the rest of California tribes.”
