What’s inside of the latest California sports betting initiative proposals filed Friday quickly became almost moot when the highly influential California Nations Indian Gaming Association released a statement that it is “deeply disappointed” the authors of the proposals did not consult anyone in Indian Country prior to filing.
“Decisions driving the future of tribal governments should be made by tribal governments,” according to the statement. “While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate.”
It’s unclear what entity is behind the proposals, signed by Ryan Tyler Walz, who according to LinkedIn is the vice president of business development for Enshored, a company that works with startups. The listed contact is Reeve Collins, founder of SmartMedia Technologies and other tech startups.
The two do not have an obvious business relationship, and their only clear connection to gaming is that Walz was also the founder of Pala Interactive, which was sold to Boyd Gaming in November 2022. Pala Interactive is owned in large part by the Pala Band of Mission Indians. David Strow, who handles media relations for Boyd Gaming, said in a tweet Saturday that his company has nothing to do with the proposals.
That wasn’t us, Victor. The former Pala Interactive (now Boyd Interactive) had nothing to do with that filing.
— David Strow (@davidstrow) October 28, 2023
So far, the Sports Betting Alliance, which is made up of multiple major operators, and the state’s biggest tribes — including the Federated Tribes of Graton Rancheria, Pechanga Band of Luiseno Indians, the San Manuel Band of Mission Indians — say they are not involved in last week’s filing. Earlier this month, all groups were surprised to learn that a sports betting petition might be coming. At that time, there was speculation that bet365 or another European operator was looking to expand its U.S. footprint. Email inquiries over the weekend to Graton Rancheria, Pechanga, and Reeve Collins were not returned.
Tribes intend to maintain gaming monopoly
The strong reaction from Indian Country was swifter than its initial response to an initiative run by seven operators in 2021-22. That opposition letter, publicized nearly two months after the commercial operators announced they would be running an initiative campaign, said CNIGA would “wage a vigorous and well-funded campaign” to defeat the measure, which is what occurred. The current response doesn’t speak directly to stopping an initiative attempt, but it clearly indicates a sense of resistance from feeling patronized.
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The latest proposal again reveals a failure to collaborate with California’s 70-plus tribes, which aspire to keep their current monopoly on gaming. In 2022, the tribes spent hundreds of millions of dollars killing the commercial initiative that would have brought retail and digital sports betting to the country’s most populous state. The defeat was so stark that it ranks in the top 10 in terms of “blowouts,” out of more than 1,200 initiatives voted on by Californians since 1910.
The two initiatives filed late Friday would create the Sports Wagering Regulation and Tribal Gaming Protection Act and would collectively allow for retail and digital sports wagering, using a hub-and-spoke model and controlled by California’s tribes.
Platforms would be required to be branded only with a tribe’s federally recognized name and not the name of a commercial sports betting operator. This provision would not exclude major operators or vendors, such as BetMGM, DraftKings, FanDuel, or Kambi, from running the back end of operations.
The act would also allow for the addition of roulette and dice games (craps) at tribal casinos, and it provides a model compact for participating tribes. The proposal calls for gaming tribes to contribute 15% of adjusted gross revenue to a fund shared among the state’s non-gaming and limited tribes and 10% to a homelessness and mental health fund.
The hub-and-spoke language in the proposal resembles that of the 2021 Seminole Tribe compact with the state of Florida. That compact, challenged by parimutuels in Florida, is currently winding its way through federal and state court.
The hub-and-spoke model would classify any bet made anywhere in the state of California to have been made legally on Indian lands if the bet flows through a server on tribal land. That arrangement is not yet legal anywhere in the U.S. The language also appeared in a 2023 bill in Minnesota that did not gain traction.
“We won’t see sports betting in Florida for some time yet, but it will come eventually.”
– Bob Jarvis, @NSUFlorida
Jill Dorson reports on the latest court ruling in two parimutuels’ effort to halt @HardRockBet’s launch in the Sunshine State…https://t.co/ef9jNi2AQf
— Sports Handle (@sports_handle) October 26, 2023
Should the authors of the California proposals choose to move forward, it would start a months-long process to seek approval. Ballot initiatives must be filed with the attorney general’s office, given a tracking number, and then be assigned a title and summary. The day the petitions are filed is the start of a 30-day comment period, which in this case will close Nov. 27.
After getting a title and summary and the public comment period closes, proponents could begin collecting the 874,641 signatures needed to get on the November 2024 ballot. Proponents have a maximum of 180 days from when the title and summary are issued to gather signatures and file petitions for verification with county officials. Any proposed initiative for the 2024 ballot must qualify for the ballot 131 days before the Nov. 5 election, which means a cutoff date of June 27.
Other details inside the proposal
Here’s a look at other key components of the initiatives:
Wagering would begin no later than Sept. 1, 2025.
Betting on professional, college, and amateur sports would be allowed.
The legal age for betting would be set at 21 and operators would be prohibited from sending mailers or targeting those under 21 with advertising and marketing materials.
In-person registration would be required.
The California Gambling Control Commission would promulgate and enforce rules, but the Tribal Gaming Protection Act would regulate wagering.
The Indian Gaming Special Distribution Fund would seed the state with $50 million to get wagering started.
Gaming tribes could partner with non-gaming and limited gaming tribes to offer registration locations or to offer wagering under the gaming tribes’ mark.
Any tribe that wants to participate but does not want to sign the model compact would be free to recompact with the state of California and go down the traditional road of getting approval through the U.S. Department of the Interior.
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