Opposition Remains As Efforts Underway For California Sports-Betting Initiative

January 9, 2024
California sports-betting proponents have begun signature collecting in an effort to qualify their amended measure for this year’s ballot, despite opposition from many Indian tribes.

California sports-betting proponents have begun signature collecting to qualify their amended measure for this year’s ballot, despite opposition from many Indian tribes.

To get their proposal to legalize mobile and retail wagering by tribes on the November 5 ballot, backers will have to gather 874,641 valid signatures. Eagle 1 Acquisition Corp., which has submitted two potential initiatives, will need to collect about 1.2m signatures by June to ensure enough are valid.

Kasey Thompson, a partner in Eagle 1 Acquisition Corp. and one of the architects of the initiative, told Vixio GamblingCompliance on Friday (January 5) that, so far, proponents have spent $5m to start the process and will spend $1m a week in their signature gathering efforts.

“We feel confident that we will gather enough signatures,” he said. “We have 180 days to collect signatures. That doesn’t mean we are going to be successful.”

Backers of the initiatives also include Ryan Tyler Walz and Reeve Collins, both of Eagle 1.

Thompson confirmed that his group is only collecting signatures for the more detailed 23-0030-A1, which explains what sports betting in California would look like. The second proposal, 23-0031, would be used as an alternative and the group was not gathering signatures for it as of Tuesday.

“We would use that as a backup, which the legislature could put on the ballot,” Thompson told Vixio.

California attorney general Rob Bonta released the title and summary for both initiatives on January 2. 

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 requires 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. 

Increasing the percentage of revenue going to the Revenue Sharing Trust Fund, from 15 percent to 25 percent, eliminates a 10 percent share initially designated for homelessness and mental health funding.

A report issued by the California Legislative Analyst's Office regarding the initiative found that sports betting could increase “state revenues that could reach into the tens of millions of dollars annually, depending on how the measure is implemented and legally interpreted.”

“Some portion of these revenues would reflect a shift from other existing state and local revenues,” according to the report. State regulatory costs would be “in the low-to mid-tens of millions of dollars annually. Some or all of these costs would be offset by the increased revenue or reimbursements to the state.”

Thompson said the initiative would benefit every tribe in California, particularly the 72 tribes currently receiving $1.1m annually from the tribal Revenue Sharing Trust Fund. Those revenue-sharing payments have remained the same since the passage of Proposition 1A in 2000.

He expects the annual payment to those tribes to increase to more than $15m each year should voters approve sports betting in November.

Currently, there are four tribes — Cahuilla Band of Indians, Karuk Tribe, Blue Lake Rancheria and Chicken Ranch Rancheria — that have publicly backed the initiative. Daniel Salgado, chairman of the Cahuilla Band of Indians, plans to establish an association to represent Revenue Sharing Trust Fund tribes. 

Salgado was unavailable for comment on Monday.

Thompson, who partnered with the Pala Band of Mission Indians to found Pala Interactive, which was acquired in 2022 by Boyd Gaming for $170m, told Vixio he and his partners sold Pala “knowing we were going to do this.”

The California Nations Indian Gaming Association (CNIGA) and its 52 member tribes oppose the initiative and issued a statement last month reiterating their opposition.

“The opposition coming from Indian Country is loud and it is clear,” CNIGA chairman James Siva said. “Indian Country will stand firm in protecting our sovereign rights and integrity. We call on the proponents to do the honorable thing and withdraw these flawed initiatives.”

Other key changes in the finalized initiative include the deduction for promotional credits being limited to 15 percent in year one and decreasing 3 percent each succeeding year until they reach zero in year five.

The changes also limit in-person registration for mobile sports-betting accounts to the first two years, while allowing for mobile sign-up within ten miles of tribal casinos in California. Under the amended proposal, the start date for online wagering could be no earlier than July 1, 2025.

Thompson told Vixio that Eagle 1 deliberately blocked the use of commercial brands and all co-branding, and instead any sports wagering operations must be branded under “the tribe’s federally recognized name.”

“This is the most important thing,” Thompson said. “They can’t own it. It’s 100 percent tribally owned.”

Although the initiative focuses on tribes offering sports betting, it is uncertain if the California Lottery, which has 23,0000 retail outlets, the state's 82 cardrooms and racetracks and satellite facilities state-wide will ever be allowed to offer wagering on sports at some point in the future. 

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