Tribes Assert DFS Has Been Running Afoul Of State Law
Legal Sports Report

Tribal Opposition To Daily Fantasy Sports Bill Comes Into Focus With New Letter

CA tribes oppose daily fantasy sports bill

Two tribes in California — the San Manuel and Morongo bands of Mission Indians  — have formally voiced their opposition to a regulatory effort for daily fantasy sports as currently proposed, in a letter to a state lawmaker.

Earlier, a coalition of tribes expressed their dismay that DFS regulation had leap-frogged discussions on online poker.

Legal Sports Report obtained the full letter reported on earlier at the Sacramento Bee and elsewhere. The full letter from the San Manuel band can be viewed here; a letter from the Morongo band is nearly identical.

What San Manuel, Morongo have to say

The letter was addressed to Assemblymember Adam Gray — the chairman of the Government Oversight committee who is spearheading an effort behind a DFS bill in the state legislature. His bill passed an Assembly vote with just one “no” last month.

The letter does not indicate that the two tribes are entirely against a bill that would expressly legalize and regulate DFS, but raises a variety of “concerns” surrounding the bill — AB 1437 — and says it “would expand gaming in California.” The latter point is perhaps more problematic, as the bill, as constructed, treats DFS as a game of skill separate from gambling.

The letter also states that the two tribes believe the bill sets a “very dangerous precedent.”

From the letter:

San Manuel supports legislative measures that provide greater consumer protections, however, in contrast to the highly deliberative process and hundreds of hours of testimony that has produced an extensive record on the authorization and regulation of online poker, AB 1437 and its sweeping implications for consumers have had very little vetting or deliberation. Accordingly, we have a number of questions about your bill and the DFS industry in general which will help inform a future position.

The tribes’ DFS questions

The letter goes on to ask a series of 10 questions in bullet-point form. Among the questions:

  • The letter reiterates prior calls for the attorney general to weigh in on DFS vis a vis current California law.
  • It throws out the idea of “bad actors” (without terming it as such); i.e. if DFS companies have been operating illegally under California law, should they be allowed to continue to do so?
  • It calls into question the licensing structure, asking if Gray is for the “unlimited expansion of licensees in California, without regard to prospective operators’ track records in the state?”
  • It questions why the bar is set so low for licensing of DFS operators, in terms of fees, vis a vis online gaming.

Perhaps the most concerning part of the letter is the question raised by the tribes that DFS may be conducted illegally in the state:

Pursuant to the California Constitution, “banked games” were granted exclusively to California’s Indian tribes through a voter-approved amendment to the state constitution. If DFS violates the Constitution’s prohibition against gaming of the sort found in Nevada casinos, it can be authorized only through a constitutional amendment approved by the state’s voters.

Amaya, the tribes and DFS

San Manuel and Morongo have a lobby partnership with Amaya — the parent company of PokerStars — on the subject of online poker. They appear not to be in lockstep on daily fantasy sports, however, at least publicly.

Amaya offered the following statement following the passage of a DFS regulatory bill in the Assembly last month:

We are very supportive of the CA bill and believe it reflects the kind of consumer protections and industry standards that we support as the leading regulated online gaming company in the world

We also see strong correlation between the merits of this legislation and the merits in regulating online poker, which similarly has millions of Californians participating in today without the protections provided by state regulation and oversight, without the stringent licensing of operators and without the benefit of state revenue derived from the activity.

Some gaming interests in the state seen an opportunity to merge the conversations about online gambling — DFS and poker — in the state. That is something that San Manuel, Morongo and Amaya could possibly agree on.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.