Over the course of the past couple years, and most definitely during the past 12 months, one thing has become absolutely clear: The future of California sports betting lies in the hands of the state's tribes.
Yes, technically, government officials and lobbyists have plenty of influence. Voters will also have a say on the legalization of sports betting in California. And their voice matters. Two California sports betting measures made it onto the 2022 general election ballot, and voters ultimately decided neither was worth passing. This includes the measure (Proposition 26) backed by the state's tribes.
Still, there's no denying the power tribal casinos currently hold. As the laws are currently written, they have exclusive rights over gaming operations. So, no matter what form a policy overall takes, sports betting legalization will ultimately require both the unbridled cooperation and support of California tribes.
Whether this bodes well for future sports gambling attempts, though, remains to be seen.
How Much Power Do Tribes Actually Have Over the Legalization of California Sports Betting?
Money talks. And let's just say, as a result, California tribes are speaking volumes. That much has always been certain. But it became even more undeniable during the last election cycle. Consider what Baird Fogel and Kristi Thielen recently wrote for the Times of San Diego:
"Without tribal support, more than 80% of voters rejected Prop 27 — despite the $169 million spent by large sports betting companies supporting it, the potential for up to $500 million in annual state tax revenue, and early indications of support from Californians...Yet, California’s tribes are more powerful than in any other state, with Indian gaming casinos generating nearly $9 billion in revenue each year. Without their backing, the initiative lost the support of the state’s major political players, including the California Democratic Party and Governor Gavin Newsom, who told the public to vote 'no' on Prop 27 because it would hurt the tribes.
"In contrast, the California Democratic Party remained neutral and the governor silent on the tribes-backed Prop 26, which would have legalized in-person sports betting at tribal casinos and four private horse race tracks. For the tribes, the defeat of Prop 27, which they feared would significantly dilute their power and revenue, was far more important. In fact, as they surely knew, having two similar initiatives on the ballot tends to spell failure for both."
This is ironclad proof of how important California tribes are to the legal gambling process. And they, without question, understand it. Tribal leaders have flat-out said they have power over the best online betting assets. Their push to overturn prop 27 was a giant logistical flex.
It's not the first time California tribes have derailed a gambling campaign, either. Back in 2020, the state introduced a bill that would have allowed on-site and online sports betting for tribal casinos and horse tracks. However, it eventually became known that cardrooms would be permitted to continue their line of operations under the measure. California tribes weren't willing to make this compromise, and despite a fair amount of support for the bill among officials and voters, it was inevitably scuttled, never even making it to an official ballot.
Sports Betting Supporters Bracing for More Disappointment in 2024
Optimists continue to hold out hope that online operators and California tribes can find common ground in time for sports betting to pass through the legislative process in 2024. Other experts aren't so keen on the idea. As we've written about previously, many within the industry expect California sports betting to "flop again" next year.
While the latter sentiment is discouraging, it also aligns with tribal stances. California's tribes maintain they won't allow online betting sites to operate independently within the state.
They are willing to let corporations like FanDuel, DraftKings, BetMGM, Caesars and others help them run their own online gambling sites. But they won't support the issuance of licenses to commercial sportsbooks.
Heck, as of now, California tribes won't even agree to concrete partnerships. Commercial sportsbooks would essentially be their IT department—employees that receive a flat fee rather than a share of the profits.
How will the Battle for California Sports Betting Ultimately End?
Granted, the tribes can always change their tune between now and next year. They understand how much money is at stake.
Between out-of-state gambling and Californians signing up with the best online betting sites for United States residents that are located offshore, The Golden State is already considered a multi-billion dollar sports gambling market. That, in theory, is enough money to change anyone's mind.
Then again, the tribes are equally aware of how much leverage they have in this situation. They already cost online sports betting sites hundreds of millions of dollars in campaign fees for a measure that wound up bombing. Sports betting operators have deep pockets, but they're not in the habit of setting nine figures' worth of cash on fire.
Industry insiders, in turn, have suggested that the top online betting sites in the USA might sit out the 2024 legislative process altogether and gear up for another push in 2026. This would free up California tribes to push and market on-site sports betting laws next spring—perhaps just in time to make the 2024 general election ballot.
Plenty of potential outcomes could define this saga. At the moment, however, the battle over California sports betting seems like it'll play out one of two ways once we hit 2024. Either California legalizes sports betting exclusively in-person, or they won't legalize any form of sports betting at all.
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