Four people involved in tribal gaming discussed the future, or lack thereof, of California sports betting on Tuesday.
The conversation included several interesting comments including an explanation for why so many tribal casinos oppose Prop 27 so vehemently.
The resistance to the ballot measure, which seeks to legalize online sports betting in California, is not about online sports betting. It’s about the precedent that Prop 27 could set for the future of gambling in California.
California sports betting is quite a quagmire
As both Prop 26 and Prop 27 seem on course to fail next month, the discussion in a Tuesday panel at the G2E conference in Las Vegas centered on how California can move toward actually legalizing sports betting.
The people providing their opinions included:
- Sara Dutschke, Chair of the Ione Band of Miwok Indians
- Jacob Mejia, Director of Public Affairs for the Pechanga Tribe
- Victor Rocha, Conference Chairman of the Indian Gaming Association
- James Siva, Vice Chair of the Morongo Tribe
In summation, panel members see legalizing sports betting in California as quite a challenge. According to Steven Schult of PlayCA, some of the speakers even see it as a non-issue in the state.
“Based on the numbers in California, they just aren’t that crazy about sports betting,” Rocha stated.
“When you ask, ‘if this were legalized, how likely would you be to participate?’ less than 20% say that they would participate in this whole thing,” Mejia said.
Without more context about the research they cited, it’s difficult to ascertain how much weight to give them. Regardless, it’s the narrative that Mejia and Rocha want to push. Another comment from Rocha gives some insight into why.
Rocha verbalizes the real motivation behind all the rhetoric
Hearkening back to Rocha’s comment, tribal gaming authorities seem not all that crazy about sports betting, either. It’s already no secret but Rocha made another statement that made things clear:
“They are fighting to steal our access to online gaming, and that’s where the revenue is. This isn’t about sports betting. This is about online gaming.
The revenue isn’t that big in online sports betting, but it’s big in online gaming because you don’t have to split it. It doesn’t go to sports betting companies. There are no integrity fees. That’s where the money is.”
Every word of Rocha’s comment is correct. The real issue in Prop 27, in the discussion of the legalization of online gambling in California in general, is control. In the context of online slots and table games, that issue becomes far more important than a discussion over sports betting.
For perspective on how much more valuable online casino play is compared to online sports betting, a look at revenue numbers in other states where it is legal provides insight. Chris Imperiale of PlayNJ reports online slots and table games have earned over $1 billion in New Jersey through the first eight months of 2022.
By comparison, online sports betting from January through August of this year in New Jersey stands at about $402.7 million. In neighboring Pennsylvania in August 2022, online casino revenue came to $131.7 million.
The win for both in-person and online sports betting in the same state for the same month? $42.1 million.
As Rocha alluded to, some tribal gambling authorities want to be in control of not only if online casinos become legal in California but also how that occurs.
Prop 27’s terms represent a departure from that philosophy. A similar measure reveals some acumen in a framework tribal casinos would prefer for online gambling.
What do tribal gaming leaders want?
In any discussion concerning Indigenous Peoples Groups, it’s important to note that such groups are not a monolith. That applies to tribal gaming interests, even within the same state’s borders.
A good reminder of that is the fact that some tribal casino operators have gone on the record supporting Prop 27.
With that in mind, earlier events give some context to this situation. In July, four tribal gaming authorities within California submitted a petition to put a sports betting legalization measure on the ballot for 2024. It’s unclear how much support the proposal has outside those four groups.
That could prove irrelevant, as currently, the petition does not qualify for the ballot. The differences between Prop 27 and this proposal are stark in some ways, however. The main devitations revolve around which authority in California holds the power to make decisions regarding online gambling.
The proposal would give tribal gaming compact holders the unilateral authority to decide which online sportsbooks would get into California. Additionally, it would cap the share of revenue that online sportsbook operators like DraftKings and FanDuel could take for themselves at 40%.
There’s no minimum for operators in terms of revenue share in the proposal, however, meaning individual casinos could set a far higher “cost of entry” than the 60/40 split the cap suggests. Tribal casinos could treat 60% as the floor for their negotiations.
A similar framework for online slots and table games would put tribal casino operators in a position of holding all the cards in the future.
Online sports betting isn’t the issue when it comes to discussing online sports betting in California. The true point of contention is tribal gaming authorities’ concerns over a proverbial slippery slope that could lead them to lose hypothetical control over a future expansion of online gambling.