California Online Sports Betting Fight Heats Up In Super Bowl State

Written By Brad Allen on February 11, 2022
California sports betting

Three California tribes are trying to block the operator-backed online sports betting initiative in the state.

The tribes announced Wednesday they had formed the Californians for Tribal Sovereignty and Safe Gaming committee. It will be backed by a massive investment, per a release:

The tribes are financially committed to defeating the operators and have established an initial campaign budget of $100 million.”

The new campaign is backed by:

  • The San Manuel Band of Mission Indians
  • The Rincon Band of Luisueño Indians
  • Wilton Rancheria

The San Manuel tribe owns and operates the Yaamava’ Resort & Casino at San Manuel outside Los Angeles. The tribe also bought the Palms Casino in Las Vegas for $650 million in 2021.

Operator initiative for California sports betting

That $100 million is the same amount the US sportsbook operators pledged to spend when they launched their initiative last year. 

That campaign has been progressing steadily, collecting a quarter of the nearly 1 million signatures needed to get on the ballot in November.

The initiative is backed by seven US sportsbooks:

If it makes the ballot and is approved by voters, the initiative would allow widespread mobile wagering with a 10% tax rate.

Pushback from tribes

However, the new tribal committee said Wednesday those operators would “export money from California.”

They also have a “track record of questionable operating practices,” according to Rob Stutzman, a spokesperson for the committee.

He pointed to a Bloomberg Tax article about FanDuel and DraftKings paying less tax because of write-offs on bonuses.

Fellow spokesperson Roger Salazar added:

“In 2000, Californians voted to give sovereign Indian nations the exclusive right to operate gaming in California.”

“The online sports betting measure sponsored by out-of-state corporations violates that promise of sovereignty, which has worked exceptionally well now for over two decades to the benefit of the tribes and California.”

The tribes historically hold a lot of sway in California politics, having successfully beaten back legislative attempts to legalize sports betting as recently as 2020.

Age verification sticking point

The tribal committee also criticized the lack of in-person age verification in the operator’s measure.

“The tribes believe that in-person age verification is a critical principle to ensure safe online sports betting,” the committee said.

Sportsbook operators push back

Nathan Click, a spokesperson for the operator initiative, said the sportsbooks would “not be deterred by false political attacks.”

“Our measure is proving to be incredibly popular with Californians,” Click said. “Ours will be the only measure on the ballot that will guarantee hundreds of millions annually to help solve homelessness and support mental health care.

“Nearly half of the country has now authorized online sports betting – proving it can be safely regulated and generate significant revenue to help states solve big problems. Our measure also provides millions in revenue for California Tribes — both to gaming and non-gaming Tribes alike.”

Click said operators were making good progress on signatures.

Competing initiatives for California sports betting

There are two other CA sports betting initiatives that could make it on to the ballot in November:

Super Bowl betting a missed opportunity

In the meantime, California gets a reminder of what it is missing this week, as the Super Bowl circus rolls through Los Angeles.

Super Bowl betting with full mobile could have generated as much as $300-400 million in California sports betting handle, according to PlayUSA analyst Eric Ramsey.

Assuming a 7% hold and 10% tax rate, that could have generated ~$25 million in GGR and ~$2.5 million in taxes for the state.

All told, California sports betting could dwarf even New York. NY is already the largest US sports betting state, just one month after launch, with half the population of California.

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Brad Allen

Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.

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