News Summary

California is exploring a new path to legalize sports betting as tribes and sports betting operators, including DraftKings and FanDuel, propose a collaborative framework. This initiative comes after the contentious ballot measures of 2022, aiming to combine tribal oversight with commercial operator participation through a unified governing body. With concerns around revenue sharing and legal compliance, stakeholders begin discussions to establish a comprehensive regulatory structure by 2028 that aligns with tribal interests.

California Tribes and Sports Betting Operators Propose Collaboration to Legalize Sports Betting

California is witnessing a renewed effort to legalize sports betting as tribes and sports betting operators begin discussions for a possible collaboration. Following a divisive ballot measure in 2022, the Sports Betting Alliance (SBA), which includes major players like DraftKings and FanDuel, has put forth a proposal to streamline and regulate online sports wagering in the state. This proposal was presented at the Indian Gaming Tradeshow & Convention in San Diego.

The most significant aspect of the SBA’s proposal involves the establishment of a single governing body that would oversee online sports betting, ensuring it remains under tribal control while allowing national operators to participate. This governance structure aims to address fundamental issues that arose during previous attempts to legalize sports betting, offering a framework that could satisfy both commercial and tribal interests.

As it stands, tribal casinos and the State Lottery, along with betting on horse racing and cardrooms, are the lone legal gambling avenues in California. All other forms of betting are prohibited, leading many Californians to travel out-of-state for access to non-tribal casinos or online platforms.

Background on Previous Legalization Efforts

In 2022, California’s initiative to legalize sports betting faced a major setback. The state saw two competing propositions: Proposition 27, which favored commercial operators without tribal oversight, and Proposition 26, which supported tribal-controlled betting. Voter response was overwhelmingly against commercial control, with 80% rejecting Proposition 27 and less than 30% supporting Proposition 26.

The aftermath of this electoral defeat has given rise to the current proposal by the SBA. The new structure would allow for competition among betting operators, all managed by the governing authority, which hopes to avoid the pitfalls of the past.

Concerns and Considerations

While the proposal has generated renewed optimism among stakeholders, questions regarding its legality have emerged. The chairman of the California National Indian Gaming Association (CNIGA) has raised concerns about whether the plan complies with the Indian Gaming Regulatory Act. Additionally, tribal leaders have expressed the need for clarity on revenue-sharing models, emphasizing the importance of fair financial distribution among tribes.

There is significant interest among tribes in ensuring they receive an appropriate share of the revenue generated from sports betting activities. For instance, members of the Estom Yumeka Maidu Tribe have voiced that tribes should benefit substantially from the profits that would arise from legalized sports wagering.

Next Steps in the Legislative Process

In light of the recent discussions, the SBA has initiated a tribal advisory board that includes tribal leadership, providing a platform for ongoing dialogue about the legalization process. This is seen as a step towards ensuring that tribal interests are adequately represented and addressed.

Further meetings among California tribal governments are expected in the coming months. There is a general recognition that reaching a consensus on an acceptable regulatory framework will require time and cooperation from all parties involved. Tribal leaders have indicated that they do not plan to push for sports betting legislation to appear on the ballot in 2026, opting for a more inclusive approach aimed at crafting a comprehensive plan by 2028.

As California moves forward with these discussions, the outcome of the collaboration between sports betting operators and tribal nations may very well shape the future of sports betting in the state, aiming to create a framework that satisfies the diverse interests of all stakeholders.