Signature Drive Begins For California Tribal Online Sports-Betting Initiative

January 19, 2022
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A coalition of California Indian tribes will have six months to collect enough signatures to place their amended online sports-betting initiative on this year’s general election ballot after receiving approval from the secretary of state’s office.

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A coalition of California Indian tribes will have six months to collect enough signatures to place their amended online sports-betting initiative on this year’s general election ballot after receiving approval from the secretary of state’s office.

The ballot proposal supported by four prominent gaming tribes evolved after tribes met a December 13 deadline to file an amended version of their initiative with the California attorney general’s office.

The amended version of the “Age-Verified Tribal Online and In-Person Sports Wagering and Homeless Solutions Act” adds language that allows tribes to still offer state-wide mobile wagering even if federal courts continue to find that to be impermissible under the Indian Gaming Regulatory Act (IGRA) of 1988, granting tribes the option to operate mobile wagering subject to state regulation, “entirely off of Indian lands” and not subject to IGRA.

The proposed initiative would also entitle tribes to amend their gaming compacts to include craps, roulette, and retail sportsbooks at their brick-and-mortar casinos.

The state attorney general’s office issued the initiative’s title and summary on January 11, allowing California secretary of state Shirley Weber to approve the measure to be circulated for signatures.

According to a fiscal impact report published by the Legislative Analyst’s Office (LAO), sports betting and the tribal payments and fees from the initiative would result in increased revenues that could range from tens of millions to the mid-hundreds of millions of dollars annually to the state.

The five-page report found local tax revenues could also benefit from gamblers spending more in local communities that offer sports betting.

The LAO did caution about a potential increase in problem gambling rates and increased workloads for regulators — the California Gambling Control Commission and the state's Department of Justice — to implement and regulate sports betting.

The increase would depend on how sports wagering is implemented, the report said.

Supporters of the initiative are required to gather 997,139 signatures, or 8 percent of the total votes cast for governor in the November 2018 general election, to become eligible for the November 8, 2022 ballot.

The four tribal proponents — the Wilton Rancheria, Rincon Band of Luiseno Indians, Federated Indians of Graton Rancheria and San Manuel Band of Mission Indians — have until July 11 to file the necessary signatures with the secretary of state’s office.

Currently, there are two other initiatives being circulated state-wide for signatures, including a measure that would enable DraftKings, FanDuel, and other major U.S. sportsbook operators to operate online sports betting through a tribal partnership. A separate ballot measure would allow cardrooms and California sports teams to join tribes in offering retail and online sports wagering.

California, with its 40m residents, represents a lucrative sports-betting opportunity for tribes and commercial gaming companies. Legalizing wagering on games would require an amendment to the state constitution, which must be passed by a state-wide vote.

On January 6, the initiative sponsored by a coalition of seven major online sports-betting operators became the first of the three pending proposals to report to the secretary of state that it had reached the 25 percent threshold for signature collection.

According to state election law, the initiative certified that 249,352 signatures had been gathered.

“Our measure is receiving an overwhelmingly positive response from California voters as we collect signatures,” Nathan Click, a spokesman for the mobile operators’ proposal known as “Californians for Solutions to Homelessness and Mental Health Support,” said in an email.

A fourth tribal initiative, which has already qualified for the ballot, would allow for in-person wagering at tribal casinos and racetracks in the state. Supporters of the initiative, which also includes roulette and craps, have raised $12.8m in support of their measure, according to the California Fair Political Practices Commission (FPPC).

Besides sports betting and new games, the initiative enables private citizens to launch civil enforcement actions against illegal gambling violations not pursued by the state attorney general.

Tribes claim that state officials have not done enough to combat illegal card games offered by cardrooms, a claim that the industry denies. A PAC financed by cardrooms and others opposed to the initiative has raised $21.7m, the FPPC reported.

Two cardrooms opposed to retail wagering at tribal casinos filed a lawsuit in December with the California Supreme Court seeking to invalidate the measure, which they argue violates the state constitution.

Hollywood Park Casino and Cal-Pac Rancho Cordova sued Weber last month arguing the initiative violates the state constitution’s mandate that ballot initiatives must be limited to a single subject.

Whether the case is scheduled for oral arguments has yet to be determined, a spokeswoman for the clerk’s office with the state's Supreme Court said Tuesday (January 18). From the time a petition is filed, the Supreme Court has at least 60 days to make its decision to grant or deny the petition or take other action.

After New York posted $150m in online betting handle on the first weekend that four mobile sportsbooks went live, the gaming industry is now monitoring California’s multiple proposals to legalize sports betting as rival interests, each supporting their own proposal, making the outcome of any initiative uncertain.

California voters have approved gambling initiatives before, including the creation of a state lottery in 1984 and then two tribal gaming measures in 1998 and 2000.

With 66 casinos in 28 counties, tribal gaming in California generates more than $8bn annually in revenue, according to the National Indian Gaming Association.

According to VIXIO GamblingCompliance forecasts, a sports-betting market in California that includes full online and mobile wagering would generate more than $3bn in annual taxable revenue in year five of operations, while a market limited to physical sportsbooks at racetracks and tribal casinos would be worth more like $300m to $400m annually.

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