View: Tribes can be involved in sports betting, but compacts won't stop it elsewhere in California
Legal Sports Report

Forget The Political Posturing: California Sports Betting Would Not Violate Tribal Rights

California sports betting posturing
With the introduction of a constitutional amendment to allow sports wagering legislation in California, some state tribal representatives have asserted that doing so would violate their tribal-state gambling compacts, even threatening to withhold compact mandated payments to California if sports wagering is adopted.

But this argument is not credible.

What the California constitution says about tribes and gambling

First, the California constitution authorizes compacts with tribes to operate slot machines, lottery games and banked and percentage card games[1]

The constitution does not provide a tribal monopoly on all forms of wagering against the house, and sports wagering is not a card game, lottery or slot machine.

There also is more than one form of sports wagering: exchange wagering matches buyers and sellers like a stock exchange usually without the exchange participating in the wagers. Consequently the State is free to amend the Constitution to authorize sports wagering. [2]

Tribes, banked wagering and sports betting

Second, given the California constitution’s authorization for “banked” “card games,” it is unlikely that any compacts provide more broadly for exclusivity over all forms of “banked wagering.”

Notably, none of the tribal proponents or unnamed tribal lawyers cite any specific compact or compact language to evidence their argument, and that burden should be theirs. While I have not reviewed every California compact, I have read many, and typical compact language is limited to slot machines, lottery games and banked and percentage card games, consistent with the constitution’s limits on what can be included in a compact. [3]

The compacts specifically exclude any other form of Class III gaming. In some cases, the compact directly provides:

4.1 (d) Nothing herein shall be construed to authorize or permit the operation of any Class III Gaming, including but not limited to banking and percentage games prohibited by state law, that is not authorized or permitted under, or otherwise exceeds the authority granted by, article IV, section 19, subdivision (f), of the California Constitution. (United Auburn Compact, August 14, 2015)

So the compacts do not authorize the tribes to conduct sports wagering, let alone provide the tribes any exclusive right over sports wagering.

Where the California sports betting discussion should go

Public discussion would be helped if the tribal advocates would cite a specific compact and provision that provides substantiation for their argument. But given the California constitution’s language that may not be possible, in which case the implausible arguments should stop.

Plainly the compacts would have to be renegotiated to include sports wagering or the tribes will need state licenses if they want to participate, but that is not an impediment to legalizing sports wagering in California.

Footnotes

[1] California Constitution, Article IV, Section 19(f): “Notwithstanding subdivisions (a) and (e), and any other provision of state law, the Governor is authorized to negotiate and conclude compacts, subject to ratification by the Legislature, for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. Accordingly, slot machines, lottery games, and banking and percentage card games are hereby permitted to be conducted and operated on tribal lands subject to those compacts.” (emphasis added)

[2] The tribes’ right to conduct lottery games is not exclusive: a different amendment authorized a state lottery. The State also could amend the Constitution to authorize other persons to offer slot machines or the same banked or percentage card games, even if various tribal payments to the State may be impacted. Section 19(f) of Article IV of the Constitution simply authorizes tribal compacts that include these games and gaming devices, but it does not refer to any exclusivity.

[3] See for example the recently completed Agua Caliente Amended Compact dated August 4, 2016:
Sec. 2.9. “Gaming Activity” or “Gaming Activities” means the Class III Gaming activities authorized under this Compact.

Sec. 2.10. “Gaming Device” means any slot machine within the meaning of article IV, section 19, subdivision (f) of the California Constitution. …

Sec. 3.1. Authorized Class III Gaming.
(a) The Tribe is hereby authorized and permitted to operate only the following Gaming Activities under the terms and conditions set forth in the Compact:
(1) Gaming Devices.
(2) Any banking or percentage card games.
(3) Any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state are permitted to do so under state and federal law.
(4) Off-track wagering on horse races pursuant to the requirements in the document attached hereto as Appendix D. …
(d) The Tribe shall not engage in Class III Gaming that is not expressly authorized in this section 3.0 of this Compact.

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David Fried
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David Fried is a California gaming law attorney and a member of the International Masters of Gaming Law. For over twenty years David has represented gaming companies, casinos and card rooms in licensing and regulatory proceedings before the California Gambling Control Commission and the Bureau of Gambling Control. His website is Cal Gaming Law.