Latest California Campaign For Sports Betting To Delay Tribal Initiative

January 16, 2024
Another failed ballot measure on sports betting in California so soon after a historic defeat by voters of two initiatives last year would push the timeline for legalization in the Golden State back even further, according to a senior tribal gaming official.

Another failed ballot measure on sports betting in California so soon after a historic defeat by voters of two initiatives last year would push the timeline for legalization in the Golden State back even further, according to a senior tribal gaming official.

“If it doesn’t push the timeline back an additional election cycle, it makes it more difficult and more costly,” said James Siva, chairman of the California Nations Indian Gaming Association (CNIGA) and vice chair of the Morongo Band of Mission Indians.

“You can only go to the well so many times until you find it is running dry,” Siva said. “I think that is the danger with this.” 

With proponents of a new ballot measure to authorize online sports betting now starting to collect signatures ahead of the November 2024 election, Siva reminded supporters of the current legalization effort that the last two initiatives on the November 2022 ballot both failed by wide margins.

Proposition 26, funded by about a dozen Native American tribes, would have allowed retail sports betting at tribal casinos and four racetracks. Only about 30 percent of California voters supported the measure, while some 70 percent opposed it.

Proposition 27, which would have authorized state-wide online and mobile sports betting, garnered only 17 percent in support, with 83 percent voting against the initiative.

The measure was financed by several commercial sports-betting companies, including FanDuel, DraftKings and BetMGM, but was strongly opposed by more than 50 tribes and tribal associations. 

“The situation then was very different,” Siva admitted. “If we had that same situation happen again [for the new ballot measure] with those same numbers, it just makes it more difficult … more expensive” to bring forward any additional referendum in the future.

During a webinar last week, Siva was asked if he thought the ballot effort by Eagle 1 Acquisition Corp. would set back tribal efforts to legalize sports betting in California through further election cycles.

“Maybe two years,” Siva said. “More likely four years. I know with the [NFL’s] Super Bowl scheduled to come back [to Los Angeles] in 2027, I know there was going to be a big push to get sports betting before that. But now it might not be until 2028.”

Brendan Bussmann, managing partner with B Global in Las Vegas, agreed that a delay was inevitable.

“I think it was safe to assume that before this latest effort, we were delayed until the 2026 ballot which was, at a minimum, what was needed because of the toxicity left over from 2022 with voters,” Bussmann told Vixio GamblingCompliance.

“Depending on how the next few months go, it could kick this out to 2028 or beyond,” Bussmann said.

Bussmann suggested that the stakeholders “need to sit down, listen, and see how that can be achieved or we are going to continue to kick this down the road.”

Kasey Thompson, a partner in Eagle 1 Acquisition Corp. and one of the architects of the initiative, told Vixio he was confident that Eagle 1 would gather enough signatures to qualify its amended initiative for the November 2024 ballot.

Amended Initiative 23-0030-1 would legalize mobile and retail sports betting, as well as roulette and dice games, under compacts approved by the state legislature and the U.S. Department of the Interior’s Bureau of Indian Affairs.

The amended measure would also require participating tribes to pay up to 25 percent of sports wagering profits to non-participating tribes and up to 1 percent to the state for regulatory costs.

Thompson’s effort to get the initiative qualified has already become harder, however, after four of the largest commercial sports-betting operators who backed Prop. 27 in 2022 announced their opposition to the effort. 

The Sports Betting Alliance, a group that includes FanDuel, DraftKings, BetMGM and Fanatics, last week reaffirmed its previous opposition to the Eagle 1 ballot effort.

Siva said he appreciated the operators' opposition to the initiatives, noting that the companies had interacted with CNIGA before issuing their statement last week confirming their position.

“They’ve learned their lesson and now they are coming back to see if there is a path to sports betting in California,” Siva said.

“It begins and ends with tribes. I’ve said that over and over again. I think they finally understood that, and they are looking at the future.”

Siva also took issue with Thompson saying that Eagle 1's amended initiative had taken its language from another ballot measure introduced by the San Manuel Band of Mission Indians in 2022, which ultimately did not qualify for the ballot.

“When they took the language, they tried to say, hey this had the support of 50 or 60 tribes,” Siva said. “You’re like, no that’s not how it works. It’s not just the language of their initiative. It was coming from a tribe people trust like San Manuel. Their approach and their outreach all come into play in building support.”

Siva admitted that California tribes have had conversations about what their response would be should Thompson’s group turn in signatures or even get sufficient voter support to get the initiative on the November ballot.

“We are prepared for every scenario but hopefully it doesn’t come to that,” he said. “We remain steadfast in our opposition. If we have to fight it, we will.”

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