Despite a favorable ruling for tribes in the US Supreme Court, there are no shortcuts when it comes to the process of legalizing California sports betting.
Financial analyst Carlo Santarelli speculated that tribes in the Golden State could potentially avoid ballot initiatives and get CA sports betting simply by amending their current gaming compact.
However, a veteran tribal gaming attorney and an industry source with knowledge of the US gaming landscape disputed that theory to LSR.
Why shortcut speculation began
On June 17, the US Supreme Court announced it would be denying cert in the West Flagler case against the Seminole Tribe. Therefore, it would not be taking on the most direct challenge to the Florida sports betting case.
The SCOTUS decision meant that the Seminole would maintain exclusivity over sports betting in the Sunshine State. Its gaming compact runs through July 2051.
That prompted speculation from Santarelli of Deutsche Bank over the future of California sports betting.
Analyst projects CA sports betting
Santarelli explained the possibility of a Golden State shortcut in a financial note:
“The ruling essentially provides a blueprint for California and other states with tribal gaming, as the notion that as long as the servers accepting gate bets are on tribal facilities, online wagering falls within the compact,” Santarelli wrote.
“For the California Tribes, the case essentially allows them to potentially amend their current compacts to permit sports betting, and avoid a ballot initiative, which, despite being successful for the tribes in 2022, was costly.”
Why Crowell disagrees with analysis
Veteran tribal gaming attorney Scott Crowell, however, disagreed with Santarelli’s analysis.
“Extremely slim to zero. For both legal and political reasons, that is unlikely to be a viable option. I think the legal analysis as to why it could be done without a (ballot initiative) is sketchy, and even if correct, would invite further unnecessary litigation,” Crowell told LSR.
“The tribes have a proven track record of working with the people of the state of California through the initiative process. The Supreme Court’s decision to deny cert validates the approach that tribes have previously considered taking to the voters, but doesn’t change the political reality that Californians currently do not appear to have an appetite for mobile sports wagering.”
Source: Any shortcut a longshot
An industry source further explained the mechanics of why Santarelli’s speculated shortcut is a longshot.
“Today’s cert denial does not change that under the Indian Gaming Regulatory Act, a gaming compact cannot authorize statewide online sports betting on its own,” the source told LSR. “… The upshot for other states is that an updated compact, standing alone, isn’t enough. If there is no state law allowing statewide OSB, a Seminole-style compact won’t cut it.”
Public still out on California sports betting?
As Crowell alluded to, Proposition 27, which would have legalized online sports betting in California, received just 18% of the vote at the ballot box in 2022.
As a result, any effort in 2026, even one with tribes, operators, and political leaders pulling in the same direction, would still be an uphill climb.
“I don’t believe the mood of the people of California has changed toward sports betting,” Victor Rocha, conference chair of the Indian Gaming Association, told LSR. “If anything, the (professional sports league) scandals have really hurt the product.
“The tribes will still be cautious moving forward. I think retail is still on the table, because the people of California still haven’t changed their mind about online gaming.”
Major CA tribe still evaluating FL ruling
Tribes in the Golden State were still evaluating the significance of the SCOTUS decision, which Rocha referred to as a “game-changer.”
“The San Manuel Band of Mission Indians supports the Supreme Court decision not to take up the case on review, and the DC Circuit Court of Appeals opinion rightly stands as a well-reasoned interpretation of the Indian Gaming Regulatory Act. The Tribe is analyzing the impact of the SCOTUS decision and has no further comment at this time,” the tribe told LSR in a statement.
Tribal talks on CA future remain ‘fluid’
Rocha described tribal discussions as “fluid.”
“We are going to move carefully and methodically,” CNIGA chair James Siva said on Rocha’s The New Normal podcast. “This opens up some new avenues for us to utilize and look at as potential opportunities but our timeline remains the same.”
Siva added that he did not want to commit to 2026 or any future date.
“It is not going to be this year,” Siva said.
How would FanDuel, DraftKings fit in?
Rocha believes the SCOTUS decision has only made commercial operators like FanDuel and DraftKings more desperate.
FanDuel has continued to be out in front in attempting to make amends with California tribes. Yet the role of commercial operators in any tribal sports betting framework remains to be seen.
Rocha floated the possibility of the state of California getting sports betting (with a progressive tax rate upwards of 45%) and tribes getting exclusivity on online casino gaming. However, that is just a hypothetical scenario.
“I do think that there’s a role for those companies that have the expertise in how to operate these games, but I think it’s fair to say that what they put in front of the voters in 2022 has no traction with the tribes going forward,” Crowell said.
Several obstacles for California sports betting
Regardless, there are still several obstacles needed to overcome before California gets sports betting, with the Golden State featuring 110 tribes.
“The quickest way to go broke in the state of California is to anticipate that something like this can happen without extraordinary politicalization. It involves tribal politics, state politics, county politics, municipal politics, and everything else. You should always overestimate how complex it’s going to be. Always. It’s complicated,” California gaming industry veteran Richard Schuetz told LSR.
How Florida ruling impacts others
Crowell said other jurisdictions will evaluate how the SCOTUS decision could impact their gaming situations. A hub-and-spoke model could be the answer.
“All of those states where tribes have true exclusivity or substantial exclusivity will be taking a serious look at the Florida-Seminole model. I think that would include Washington, Oregon, New Mexico, Oklahoma, Wisconsin, Minnesota, and perhaps some others,” Crowell said.
