Legal Mobile Sports Betting in California Will Require Full Tribal Support

• California’s Prop 27 Failed to Pass in 2022 Without Powerful Tribes’ Full Support

• Lessons From Other States Serve as Guide for Tribal Collaboration

• Potential Revenue from Legal California Sports Betting Too Great to Ignore

California’s Prop 27 Failed to Pass in 2022 Without Powerful Tribes’ Full Support

Last year, California voters made perfectly clear their dissatisfaction with both attempts by state lawmakers to in some way legalize sports betting there, the main rub being how neither Prop 26 nor Prop 27 succeeded in properly including the native tribes that already run Cali’s casinos.    

That’s according to sports betting experts Baird Fogel and Kristi Thielen whose recent opinion piece in the Times of San Diego summed up that take using a quote from Victor Rocha, conference chairperson for the national Indian Gaming Association, who told CalMatters:

“Everybody knows this - you don’t come and try to screw the tribes.”

On the surface, those two pieces of legislation seemed to address the issue to how the state’s native tribes would be included in the new legal sports betting market:

• Prop 26 – backed by a coalition of California tribes, this initiative would have permitted on-site betting at land-based Indian casinos and horse racing tracks.
• Prop 27 – this bill was backed by outside sportsbook operators, and if passed it would have legalized mobile sports betting via servers located on Indian reservations.

Without true tribal support, however, the Times reports that more than 80% of voters rejected Prop 27 despite sports betting companies pumping in $169 million to support it, the potential for $500 million in annual state tax revenue, and early indications that Californians supported it.

Prop 26 also failed to garner enough votes to pass despite the fact that it would have reportedly legalized in-person sports betting at tribal casinos and four private horse racetracks but without including a mobile option the way some other states have already succeeded in doing.

Lessons From Other States Serve as Guide for Tribal Collaboration

Fogel and Thielen point to Connecticut and New Jersey as states that have already managed to launch legal sports betting markets with the cooperation of the native tribes living there, labeling them as ‘guides’ for bringing tribal casino operators and sports betting operators together.

In Connecticut, tribes own the Mohegan Sun and Foxwoods resort casinos, so they collaborated with the governor’s office to pass legislation creating three online “skins” or unique brands allowed under each gaming license, one for each tribe and the third for the Connecticut Lottery.

That same ‘skins model’ has been successful in New Jersey with the Times of San Diego citing a recent report that “estimates a 50% boost in the online market’s revenue and nearly 90,000 additional unique customers as a result,” a working model that CA lawmakers must examine.

Too much money is at stake to continue to stall bringing legal sports betting to the Golden State.

Potential Revenue from Legal California Sports Betting Too Great to Ignore

So far since May 2018 when the Supreme Court overturned PASPA and gave individual states the right to legalize, regulate, and tax their own sports betting markets, over thirty of them have launched such an operation and the results have been mostly lucrative.

Those combined markets have generated a $189 billion handle which has created $14.4 billion in sportsbook revenue and $2.4 billion in tax revenue, a hefty income stream that seems to be growing as those individual markets gradually evolve.

With 39 million residents (most in the U.S.), California has the potential to break all sports betting revenue records, so expect lawmakers and tribes there to find a way to cooperate and present a workable bill that keeps everyone in the loop, one that voters can get behind.