EL CAJON, Calif.–Coming off a bitter battle for California sports betting on the 2022 election ballot, some representatives of California tribes think sportsbook operators might sit out the 2024 campaign.
Speaking at the Western Indian Gaming Conference at Sycuan Casino Resort on Tuesday, some key California tribal strategists wondered if sportsbook operators will make another attempt to legalize California online sports betting in 2024 following their resounding defeat.
“The reality may be that we beat them so badly in 2022 that they may not even pursue an effort in 2024,” said Scott Crowell, a tribal attorney who represented Rincon during the No on 27 campaign. “But if that happens, expect them to be back in 2026.”
Why operators may stay out of the fray in 2024
Last October, in essentially waiving the white flag on online sports betting Prop 27, FanDuel CEO Amy Howe said the sportsbook backers would “live to fight another day” and hoped to “get there in ’24.”
But tribal representatives opined that operators might think twice about trying again in 2024. Prop 27’s historically poor result showed tribes and operators it’s not hard to defeat a CA sports betting ballot measure.
“It probably will not take as much, certainly not $220 million, to defeat an online sports betting measure in 2024,” said Jacob Mejia, vice president of public and external affairs for the Pechanga Development Corporation.
It’s possible that both tribes and operators file sports betting initiatives as deterrents for the other but withdraw them before the election.
Additional reasons why sportsbook operators may decide not to put another CA online sports betting measure on the 2024 ballot:
- The massive defeat of Prop 27 showed that voters are skeptical of online sports betting.
- Voters will remember the anti-sports betting rhetoric of the 2022 campaign.
- It will take time for operators to make amends with CA tribes.
- The 2022 election showed that any attempt at CA sports betting needs to go through the tribes. And tribes haven’t yet figured out how to do online gaming.
Tribes consider 2022 election a ‘landmark victory’
Mejia provided a succinct recap of what happened to the online sports betting proposal on the November ballot.
“Basically, some guys made a really bad mistake and filed something called Prop 27 and got historically smashed.”
Mejia described it as among the top 1% worst defeats in the history of California ballot measures. Out of the last 1,263 ballot measures in California, the 17.7% yes vote on Prop 27 was the 11th worst.
Tim Evans, deputy general counsel for San Manuel, said voters sided with tribes over the corporate operators because of the time and investment tribes have spent integrating themselves into the communities.
Crowell admitted that online sportsbook operators have had success lobbying for sports betting nationally. And, often times, it’s at the expense of tribes.
“Nationally, it’s caught on like wildfire,” Crowell said. “I think there’s now 30+ states, over 20 of which have tribes within their borders, which have authorized sports betting. But, in many of them, the tribes are on the outside looking in. So there’s a national problem that is clearly one we have to address.”
And given the importance of controlling the modernization of the gaming industry to the future of California tribes, they see great significance in taking down corporate invaders.
Last week at the ICE London gaming conference, Pechanga chairman Mark Macarro called online gambling “inevitable” in California because Millennials favor playing games online. The Prop 27 defeat showed corporate gaming entities they can’t come into California and dictate how online gaming will go.
“I think it was a huge, landmark victory,” Mejia said. “Because if you think about it, this is the first ballot measure campaign in California related to online gaming. It sets a very specific tone.”
Tribes ready if operators come for CA again
Sportsbook operators have been eerily quiet about California sports betting since their defeat. But CA tribes know they haven’t heard the last from the corporate entities.
“You can’t be lulled to sleep and think that corporates, the FanKings [an intentional combination of FanDuel and DraftKings], are going to go away,” Mejia said. “They’re not. It’s a question of when they’re coming back and in what role they’re going to try to come back in.”
If they don’t file an initiative for 2024, Crowell expects sportsbook operators to come back with one for 2026.
“This fight will not be over until somebody wins a yes vote, so don’t read anything into their silence,” Crowell said. “They’re aggressively and actively looking to come in.”
James Siva, chairman of the California Nations Indian Gaming Association that put on the conference and vice chairman for Morongo, said he thought California tribes were caught off guard when the operators first came out with their initiative. But that won’t be the case in the future.
“They have our attention now,” Siva said. “We are well aware of what they want and we are ready for that fight. So if that’s what’s coming down the road, it will be a very similar result to last November.”
How operators can work with CA tribes
Sportsbook operators tried to work with California tribes on Prop 27. The ballot measure required all online sports betting operators to partner with a CA Indian tribe.
However, the proposal really didn’t make sense for the vast number of California tribes. There are 110 federally recognized tribes in California, more than 60 of which operate tribal casinos in the state.
Under Prop 27, only the few tribes who partnered with one of the top operators such as FanDuel and DraftKings would have done well. And with so many tribes to choose as partners, the corporate operators surely would have worked out a deal in their favor.
Tribes that didn’t participate in sports betting could have shared in 15% of the 10% taxes paid to the state after deducting promotional expenses.
Crowell contended that sportsbook operators tried to throw tribes a little bone, with tribes getting 1% or less of the online sports betting net.
“‘We’ll operate it, we’ll do it under our brands, we’ll control it, you just get out of our way.’ That model, if it’s not illegal, it’s dead in California.”
California tribes will meet in Sacramento at the end of this month to discuss tribal issues, with a particular focus on sports betting. Discussion will center around how all tribes can best benefit from sports betting and the movement of gaming online.
Tribes will determine how corporate operators can be part of that in California.
Crowell explained:
“They have to understand that if they want a role going forward, they need to approach the tribes from the idea of how do we offer our experience and back-of-the-house skills to the tribes for tribally operated online sports betting.”
