Dodging The 800-Pound Gorilla Of Sports Betting In California

August 4, 2022
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It is going to be one of the biggest, if not the biggest, story in the U.S. gaming industry this year, but hardly anyone is eager to talk about the two competing sports-betting measures in California that will be on the election ballot on November 8.

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It is going to be one of the biggest, if not the biggest, story in the U.S. gaming industry this year, but hardly anyone is eager to talk about the two competing sports-betting measures in California that will be on the election ballot on November 8.

The latest example happened on Tuesday (August 2) during a second-quarter earnings call featuring Caesars Entertainment CEO Tom Reeg.

“We don’t want to be in opposition to tribal interests when we’re their partners, so we’ve remained neutral in California throughout,” Reeg said, referring to Caesars' relationship with the Harrah's Southern California tribal casino-resort owned by the Rincon Band of Luiseno Indians.

“You should expect that to be the case in any state where tribes are at odds with the commercial interests.”

Casino executives, both commercial and tribal, act like they are walking on eggs when they even dare to comment on the sports-betting measures proposed by California tribes and companies like DraftKings and FanDuel.

Proposition 26 would authorize in-person sports betting at brick-and-mortar casinos owned and operated by California tribes. The state’s four racetracks would also be allowed to offer retail wagering.

Proposition 27 is more ambitious, calling for online sports betting in the most populous state in the nation and allowing DraftKings, FanDuel and other non-tribal companies to end the gaming monopoly of California tribes.

Matt Prevost, chief revenue officer for BetMGM, which supports the online wagering proposition in California, took a pass when asked about the upcoming election during a panel discussion at the SBC North America Summit on July 13 in Secaucus, New Jersey.

“I’m not going to try to predict [the outcome], to be honest,” Prevost said.

Already bitter, the so-called war between California’s gaming tribes and the online sports-betting companies is destined to grow even more bitter as the election approaches.

But a California casino executive said tribes are trying to show restraint in their messaging.

“We are acutely aware of the damage that could be inflicted on tribal gaming operations if things get really ugly,” the executive said.

Other political interests are becoming involved, with the California-Hawaii State Conference of the National Association for the Advancement of Colored People (NAACP) alleging in a lawsuit filed on Tuesday in Sacramento that opponents of the tribal sports-betting proposition are using false and misleading language in voter guides.

The NAACP supports Proposition 26, calling it a measure that would bolster “Indian self-reliance.”

Meanwhile, Nevada — California’s next-door neighbor — is keeping a close eye on the intense sports-betting campaign.

“One of Nevada’s exports is gaming-related brains and operators, and people and businesses here easily could get involved in [California sports betting if either proposition passes],” said Michael Green, an associate professor of history at the University of Nevada in Las Vegas.

Three tribes that operate smaller casinos in rural Northern California — the Big Valley Band of Pomo Indians, the Middletown Rancheria of Pomo Indians, and the Santa Rosa Rancheria Tachi Yokut Tribe — came out last month in support of the online sports-betting measure.

Two of the three tribes — the Middletown Rancheria of Pomo Indians and the Santa Rosa Tachi Yokut Tribe — also are embroiled in a gaming compact dispute with the U.S. Department of the Interior.

None of the three tribes responded to requests for comment on Tuesday, but their representatives have said online sports betting offers a better financial future for Indian gaming.

“They’re getting a public relations beating from their nearby tribal neighbors,” an Indian gaming lobbyist, who requested anonymity, said of the three tribes backing the online betting measure.

“The immediate backlash was clear, and the side effect was to actually unite the other California tribes in opposition [to Proposition 27, the online sports-betting measure].”

This was an attempt by commercial sports-betting interests to cast the debate as tribe versus tribe rather than tribe versus corporate, the lobbyist said.

Mutually assured destruction of both the initiatives leaves the status quo [in place], and maybe that’s a good result for now,” the lobbyist said.

Joe Valandra, an Indian gaming lobbyist and former chief of staff of the National Indian Gaming Commission, said the California election is important to all of Indian Country.

“The impacts of this vote will be far-reaching because tribal sovereignty is on the ballot,” Valandra said, "Tribes have defended their right to conduct gaming for decades. This is the most recent example of defending sovereignty.”

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