Where Does California Sports Betting Legalization Go From Here?

Written By Derek Helling on November 9, 2022
tribal casinos california sports betting online

As has been expected for months now, voters shot down two California sports betting propositions. The defeat of both Prop 26 and Prop 27 at the ballot box does not mean that betting on sporting events will remain illegal in the state forever, just for the foreseeable future.

At the same time, the politics around the situation significantly narrow the prospects of affecting such a change in the near future. Any path that gambling expansion proponents might take is fraught with obstacles.

A simple but loaded premise; California sports betting

The reality of the situation is that some of the most powerful interests in the state when it comes to gambling have an “our way or the highway” attitude when it comes to legal sports betting in California. Those interests are several tribal gaming authorities that operate casinos within California’s borders.

As conference chair of the Indian Gaming Association Victor Rocha explained last month, the issue for many tribal casino operators regarding sports betting isn’t actually sports betting. The issue is how that comes about, if at all.

Some tribal casino operators would rather all sports betting remain illegal in California than see it occur on any level outside their total control. The revenue from sports betting in and of itself is quite negligible. They fear commercial sports betting would lead to non-tribal online casino play and a loss of significant potential revenue from that vertical.

While tribal casino lobbies hold sway in the state capitol and over the voter base in the state, that influence is not absolute. The friction between interests in the state remains and could hinder future attempts to legalize sports betting in California.

The constitutional route in California

There are just a couple of paths for expanding legal gambling in California. Those are:

  • Adding an amendment to the state’s constitution via popular vote
  • Amending gaming compacts between the state and tribal authorities

As has just been put on display, getting broad voter support for a sports betting ballot measure is difficult. A coalition of online gambling companies, tribal gaming authorities, and other gambling interests in the state might be able to drum up the necessary vote.

However, for the reasons already discussed, forming such a coalition appears next to impossible right now. There are differences of opinion on issues like revenue sharing between online gambling companies and tribal authorities.

Additionally, there’s long-running animosity between card room operators and tribal casinos in California. Tribal casino operators have tried to severely limit card rooms several times in the past. Reaching a consensus on even the issue of sports betting might prove too high a mount to summit.

Yet, simply expanding tribal gaming to include sports betting presents its own challenges.

Legal obstacles to compact gambling expansion

While giving interested tribal authorities the control over sports betting they insist on seems a viable option, it’s not that simple. Any gambling compacts between California and tribal groups have a third party to them; the federal government.

All gaming compacts are subject to the approval of the US Dept. of the Interior. That makes them subject to federal law. Currently, the interpretation of the Indian Gaming Rights Act precludes tribal authorities from offering gambling outside their sovereign territories.

Thus, compact amendments could only make sports betting legal in parts of California. Alternatively, California could form commercial agreements with tribal casinos for sports betting and bypass the compact process.

However, that would involve getting support from the state’s legislature. At the very least, that throws a wild card into the situation. Additionally, it’s uncertain how much buy-in the state would have from various tribal authorities. Tribal casino operators are not a monolith and in many ways are in competition with each other.

For all these reasons, the prospect of legalizing sports betting in California anytime soon is daunting. While the appeal might be too big for online gambling companies to simply give up, they face significant obstacles that so far have proven insurmountable.

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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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