Posted on: June 27, 2024, 03:05h.
Last updated on: June 27, 2024, 03:05h.
Last week, the United States Supreme Court declined to hear an appeal challenging Florida’s decision that essentially allows for the Seminole Tribe to maintain a monopoly on online sports wagering activities in the state. That sparked speculation that other states, including California, where Tribes control gaming could bypass voters and establish internet sports betting.
While some Tribal gaming leaders in California viewed the Supreme Court decision as a positive, they don’t view it as a playbook for bringing online sports betting to their state. That outlook runs counter to the thesis recently laid out by Deutsche Bank analyst Carlo Santarelli who wrote that the Supreme Court ruling “provides a blueprint for California and other states with tribal gaming.”
Gaming Tribes in California support the ruling, but that doesn’t mean they’re rushing into sports betting. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), said on Indian Gaming Association’s (IGA) “New Normal” podcast yesterday that the only certainty at this point is that Tribes will not be pushing for sports betting in California this year.
I know there’s a lot of excitement over this decision and it was the right decision, but people think we’re going to start having a push for new initiative immediately (in California),” Siva said. “Luckily, we have a CNIGA meeting coming up this week and everyone realizes we’ll continue on the path we’ve been taking the last few years, moving carefully and methodically. This opens up some new avenues for us, but our timeline remains the same even with this decision.”
The podcast is hosted by IGA Chairman Victor Rocha who is a member of the Pechanga Band of Luiseño Indians, which runs the Pechanga Casino Resort in Temecula, Calif.
Commercial Ops Could Be in for Rude California Awakening
After backing an ill-fated 2022 ballot proposal to bring online sports betting to California without consulting Tribes, commercial sportsbook operators are licking their wounds in the state and things may not get better from here.
Owing to the fact online sports betting in California would be a new form of wagering under the terms of Indian Gaming Regulatory Act (IGRA), at least 60% of the related revenue must flow to Tribal governments. A potential revenue split along those lines could be unattractive to companies such as DraftKings (NASDAQ: DKNG), FanDuel, and the like, but Siva made clear California Tribes won’t accept sports betting “crumbs on the table.”
Likewise, Scott Crowell, a tribal-gaming attorney with the Crowell Law Office Tribal Advocacy Group, said on the podcast that the Supreme Court’s decision to not hear the West Flagler appeal signals that the exploitative model commercial gaming companies have used in some Tribal-heavy states such as Arizona won’t fly in California.
“If they think they can continue with the unconscionable model they’ve been pursuing for so long in other jurisdictions, I hope this decision is a wake-up call. That’s not going to happen,” he said.
Rocha added that under a hypothetical scenario in California, Tribes would gain exclusivity over iGaming and commercial companies could potentially work with Tribes on sports betting while being subject to a graduated tax rate that could run as high as 45%. That’d be the second-highest sports wagering levy in the country behind only New York and several small states.
No Clear Timeline for California Sports Betting
A takeaway from the podcast is that California Tribal casino leaders want the state’s voters to have a say on the matter of sports betting, but exactly when that happens hasn’t been decided. The only clarity on timing is that it won’t be this year, according to Siva.
Tribes have monitored the situation and realize that after California voters dealt with sports betting ballot initiatives in 2022, the appetite isn’t there for the issue to be reckoned with this year. It’s possible the matter could be pushed out to 2028 or 2030 and California tribes are comfortable playing the waiting game.
“Our careful approach, and protecting the industry we built up from nothing over the last three decades, mean more to us than adding another percentage to the bottom line. That’s always been and will continue to be our approach,” added Siva.
