In a surprising move that no one expected after the ballot fights of 2022, sports betting operators and California tribes have explored a potential collaboration that may legalize sports betting in the Golden State.
Representatives from the Sports Betting Alliance (SBA), which includes DraftKings and FanDuel, recently unveiled a shocking proposal at the Indian Gaming Tradeshow & Convention, held in San Diego. The proposal included the creation of a new, single body that would manage online sports wagering in California. This body would maintain tribal control of the market, whilst contracting with national sports betting operators.
Tribal casinos have dominated the industry in the state, as only these gambling establishments are legal, along with the State Lottery, betting on horse racing, and card rooms. All other types of betting and gambling are prohibited. Players wanting to access non-tribal casinos or online platforms like instant withdrawal casinos, where they can get access to their money fast, have historically had to leave the state.
The CEO of DraftKings, Jason Robins, admitted at a panel discussion that collaborations are key if legalization is to happen. “Having tribal relationships and partnerships is absolutely essential, there’s no other way to do it here,” he said.
2022 saw California tribes and sports betting operators face off in a ballot initiative battle, where the operators spent more than $200 million to push Proposition 27. This proposition sought to legalize sports betting without any tribal oversight. This proposal was rejected, with 80% of voters voting against it.
The new SBA proposal features several elements that might just make it viable:
- A new body that represents all 109 of California’s recognized tribes.
- Funding from operators for a ballot initiative.
- Minimum annual revenue guaranteed for each tribe.
- A revenue-sharing model between tribes (both non-gaming and gaming).
- Operators are taking on the financial risks, not the tribes.
This proposal will see betting operators competing against one another while contracting with the newly established representative body. This may limit the market to only SBA members.
The SBA proposal has reignited conversations between operators and tribal casinos. James Siva, chairman of the California National Indian Gaming Association (CNIGA), mentioned that tribes have previously considered a model similar to the SBA proposal. However, he queried whether the SBA plans to operate inside the regulations of the Indian Gaming Regulatory Act.
There are also ongoing concerns from the tribes, especially surrounding the proposed revenue-share model. A representative from the Estom Yumeka Maidu Tribe stated, “We as tribes really want to make sure that we have the lion’s share. We want to make sure that all the tribes are taken care of. I really think it’s a top goal of California tribes that we all share equally.”
The SBA members have reassured the tribal leaders that any path to sports betting legalization will include tribal leadership. For that reason, the SBA established a tribal advisory board and organized meetings with tribal leaders during the San Diego conference.
According to a statement by the CNIGA, “Further discussions among tribal governments are expected to take place in the coming weeks and months. Let there be no false illusion: establishing an acceptable framework and governance model will take time.”
