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California tribes aim to cut DraftKings out of sports betting

Various California groups are vying for control of sports betting through ballot initiatives. This photo shows TV screens and betting odds in the sports book at the Circa Resort & Casino in 2020 in Las Vegas.

Various California groups are vying for control of sports betting through ballot initiatives. This photo shows TV screens and betting odds in the sports book at the Circa Resort & Casino in 2020 in Las Vegas.

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Several tribes are airing a proposed ballot initiative that would give them control of sports betting in California while blocking card rooms and commercial giants like DraftKings and FanDuel from opening operations here, according to a memo obtained by The Sacramento Bee.

If they move forward, it would make the fourth proposed online sports betting initiative that California voters could see on their ballots in 2022.

Placing bets on sports has only recently been legalized in the United States. Following a 2018 Supreme Court ruling, 32 states and Washington, D.C. have legalized the practice, and now, several groups are jockeying to bring it to California.

The Golden State, with its vast population and share of wealthy residents, represents a lucrative opportunity for those who want to operate sports betting. But doing so would require an amendment to the state constitution, which must be passed by a statewide vote.

Three other groups representing card rooms, online bookies and another coalition of tribes have already introduced sports betting initiatives that they hope will qualify for the November 2022 ballot.

One initiative, which was introduced by a group that includes the Pechanga Band of Luiseño Indians, would allow in-person sports betting at tribal casinos and horse racetracks, but says nothing about online betting.

The other initiatives, backed by online operators like DraftKings and card rooms, would legalize online sports betting for entities outside the tribes.

Over the weekend, the Rincon Band of Luiseno Indians, the Federated Indians of Graton Rancheria and Wilton Rancheria sent a letter to all federally recognized California tribes asking them to consider a new proposal that would consolidate control over in-person and online sports betting into tribal hands.

According to the letter, the “California Tribal Government Mobile & Retail Sports Wagering Act of 2022” would allow in-person and online sports betting only through federally recognized tribes.

Online bets would have to be made through servers that are owned and operated by tribes and located only on Indian lands. Californians would still be able to make sports wagers via cellphones or laptops anywhere in the state, so long as the servers were on tribal land.

Cuts out horse tracks, card rooms

Under the initiative, horse racetracks, commercial card rooms, sports franchises, corporate online operators or others would not be eligible to offer sports wagering.

The tribes said they intend to file the measure with the Secretary of State this week.

“If the DraftKings Measure or the Cardrooms Measure passes in November 2022, tribes would lose their exclusivity to class III gaming in California,” the letter said, in part. “Such passage would accelerate the legalization of online gaming by non-tribal interests, threatening the existence of Indian gaming as we know it.”

The three tribes that introduced the latest measure, Rincon, Graton and Wilton, all partner with out-of-state gaming companies to run their casinos. David Quintana, a longtime tribal lobbyist, said it’s disingenuous to frame the effort as only benefiting Californians.

“This should never be called a tribal proposal,” he said. “It should be called what it is: a proposal by out of state operators with Tribal stalking horses.”

As part of compacts entered into with the state, tribes who decide to offer sports wagering under the new initiative would provide 10% of their adjusted gross revenue from the practice to be set aside for all non-gaming tribes and limited gaming tribes. Another 10% would be set aside to provide assistance and programs to combat homelessness and mental illness.

That’s similar to the goal outlined in the DraftKings initiative, titled “The California Solutions to Homelessness and Mental Health Support Act” which would legalize online sports betting in California and direct 85% of the tax revenue to a fund for homelessness and mental health assistance.

The act would raise “hundreds of millions of dollars” for services, according to the campaign, and spending will be subject to audits and “strict oversight” to ensure money is spent for its intended purposes.

California mayors back sports betting

In addition to backing from major online betting companies, the DraftKings initiative is endorsed by Sacramento Mayor Darrel Steinberg, Fresno Mayor Jerry Dyer, Oakland Mayor Libby Schaaf and Long Beach Mayor Robert Garcia.

Groups must submit their initiatives to the state, and collect enough signatures before it can appear on the November 2022 ballot. So far, only the initiative allowing in-person sports wagering on tribal lands and horse racetracks is eligible for a vote.

Nathan Click, a spokesman for the initiative backed by DraftKings, said the campaign is committed to the measure’s success.

“The independent Legislative Analyst’s Office found our measure would provide hundreds of millions in solutions each year to solve homelessness, as well as real revenue for California Tribal nations, by allowing regulated entities to offer safe, responsible sports betting online,” he said in a statement. “It has won bipartisan support from advocates and leaders on the frontlines of fighting homelessness because it provides real solutions to California’s most pressing challenge.”

This story was originally published November 2, 2021 5:00 AM.

Profile Image of Lara Korte

Lara Korte covers California politics for The Sacramento Bee. Before joining The Bee, she reported on Texas higher education for the Austin American-Statesman. She is a graduate of the University of Kansas.

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