California Tribes Oppose Online Sports Betting Ballot Measure

November 1, 2021
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Two powerful groups representing California Indian tribes have come out in opposition to the ballot initiative to authorize online sports betting being proposed by FanDuel, DraftKings and other major U.S. operators, despite several provisions that were designed to attract tribal support.

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Two powerful groups representing California Indian tribes have come out in opposition to the ballot initiative to authorize online sports betting being proposed by FanDuel, DraftKings and other major U.S. operators, despite several provisions that were designed to attract tribal support.

In a joint statement on Friday, California’s Tribal Alliance of Sovereign Indian Nations (TASIN) and the California Nations Indian Gaming Association (CNIGA) announced their “strong opposition” to the initiative filed in late August by the two U.S. market leaders alongside BetMGM, Wynn, Bally’s, Penn National and Fanatics.

The tribal groups also confirmed their opposition to a separate ballot measure filed by representatives of three California cities and backed by cardroom interests, which would authorize both retail and sports online betting while expanding permitted games in cardroom venues.

Referencing both initiatives’ proposed use of state tax revenue, CNIGA chairman James Siva said the measures were “not a fix to homelessness, but rather a massive explosion of gaming that will directly undercut tribal sovereignty and self-sufficiency.”

“These measures would be bad for California and bad for tribes,” added Chairman Anthony Roberts of the Yocha Dehe Wintun Nation, owner of the Cache Creek Casino near Sacramento.

“We are prepared to wage a vigorous and well-funded campaign to educate the voters and ensure the measures are defeated.”

Although fierce tribal opposition to the cardroom-backed ballot measure was assured, Friday’s statement is a blow to the coalition of seven major online operators that crafted their initiative with California tribes in mind and expressed a clear desire to work with Indian nations rather than against them.

The proposed California Solutions to Homeless and Mental Health Support Act would require established online sportsbook operators to become the designated partner of a California tribe in order to apply for a license costing $100m upfront, whereas tribes could pay one-tenth that amount to offer online betting using their own brands.

Some 15 percent of state tax revenue would go to tribes that do not participate in the sports wagering market, with the remainder being used to fund homelessness and mental-health services.

“California’s homelessness crisis demands action,” Nathan Click, spokesperson for the FanDuel- and DraftKings-backed ballot initiative, told VIXIO GamblingCompliance in response to the CNIGA and TASIN statement.

“Our measure will provide hundreds of millions in solutions each year to solve homelessness, as well as real revenue for California tribal nations, by allowing regulated entities to offer safe, responsible sports betting online. Both California tribes who choose to participate in the online sports betting market and those who do not will benefit from this initiative.”

California tribes initially gave a far more muted response to the online betting ballot measure, with tribal officials previously acknowledging the risks of not being proactive on mobile sports wagering given how quickly online betting is being adopted elsewhere in America.

Tribes have already qualified a third California sports-betting ballot measure for a November 8, 2022 state-wide referendum, but that initiative would allow retail-only sportsbooks at tribal casinos and at a limited number of state-licensed racetracks.

In Friday’s statement, CNIGA and TASIN labeled the ballot measure of FanDuel and co. “the Corporate Online Sports Gaming Proposition.”

“The corporate measure was written by and for the sole benefit of out-of-state online gaming corporations. It would give them near total control of the online sports wagering market in California, undermining tribal rights and self-sufficiency, while exposing Californians to major new risks,” said the groups, which together represent a total of 43 Indian tribes.

“Contrary to what its backers say, this measure is not ‘complementary’ to the tribal-backed in-person sports wagering measure already scheduled for the November 2022 ballot, but rather a competing initiative that significantly expands online and mobile gambling. In fact, the non-partisan Legislative Analyst’s Office recently said gaming tribes would have to ‘choose to give up some of the rights they possess due to their special status under state law’ in order to be eligible to offer online sports wagering.”

California tribes have long been acknowledged as the most powerful political voice on all gambling matters in the state, with tribes having previously sunk legislative initiatives on online poker but pass a series of earlier ballot measures to authorize on-reservation tribal gaming.

The CNIGA-TASIN statement of opposition comes as the coalition of online operators gets ready to kick off efforts to qualify their measure for the ballot.

The California Legislative Analyst’s Office released its required fiscal analysis report on the initiative earlier this month, finding that legal online sports betting would increase state revenues by potentially “mid-hundreds of millions of dollars” through upfront license fees and a 10 percent tax on operator revenue, more than offsetting state regulatory costs.

The initiative should this week receive a formal title and summary from the California Attorney General’s office, at which point proponents can begin petitioning voters and collecting the 997,139 signatures required to put the measure on the state-wide ballot next November.

Proponents will have until April 26 to gather voter signatures, which must then be verified by election officials before the end of June.

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