On sports betting, will the Indian tribes of California have a monopoly?

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Three decades ago it became clear that casino games were coming to California and the only question was who would control and benefit from them.

In a few years, we have had the answer. Indian tribes daringly extended bingo halls to casino-type games and machines, bold authorities to crack down, and used the proceeds of their expanded – and possibly illegal – activities to fund a political campaign that locked down their monopoly.

Tribal chiefs have edged out their rivals, including Nevada casinos, racetracks and poker rooms, and California is now dotted with dozens of their casinos, including some resorts, which make billions of dollars each year.

History may soon repeat itself. Sports betting is coming to California, but once again the question is who will control and benefit from it. The California casino-owning tribes are moving quickly to seize a monopoly, and once again they face well-heeled rivals.

A 2018 U.S. Supreme Court ruling opened the door to legal sports betting by overturning a federal law that banned it. Since then, state after state – 32 to date – has legalized it and even the titans of professional sports, who once disdained betting on their games, are profiting from it.

As this year’s professional football season begins, the National Football League allows gambling companies to advertise during its matches, telling the Wall Street Journal “that it made sense for us to really introduce them. sports betting thoughtfully in our national footprint ”.

The NFL has also selected Caesars Entertainment, DraftKings and FanDuel Group as partners who will pay several million dollars for the right to display NFL content on their betting sites.

What about California?

Bills to legalize sports betting in the country’s largest and richest market have been around the legislature for several years, but lawmakers have failed to agree on a system that would please to all conflicting gaming interests.

With the deadlock on Capitol Hill, the casino-owning tribes have decided to take control via a ballot initiative that has already qualified for the 2022 ballot.

If approved, the measure would allow betting on professional and college sports at tribal-owned venues and four horse racing tracks – the latest obvious move towards a single rival to reduce potential opposition.

The measure also sanctions roulette and craps in tribal casinos and expressly requires that sports bets be placed in person at designated sites, thereby closing online betting until the tribes wish.

State poker parlors are opposed to the measure, not only because it would create new competition for players’ money, but because it contains language that would subject them to increased state regulation.

It’s a David vs. Goliath situation because the tribes can invest almost unlimited funds in a campaign for the measure – in fact, they already have 10 times as much in their campaign treasury.

However, several cities that have poker rooms have filed a rival initiative that would also allow sports betting in Indian casinos and on racetracks, but extend legalization to poker rooms, professional sports teams themselves and, most importantly, to online betting operations.

The latter provision virtually invites the big online betting companies to pay millions of dollars to qualify and adopt the new measure and possibly to oppose the tribal initiative. Whichever measure receives the most votes, it will prevail if their provisions conflict.

The stakes of this political confrontation are immeasurable: several billion dollars in income. Will the tribes outsmart the opposition again or will they be forced to share the bounty with their rivals? Or will a legislative compromise nullify the costly duel of ballot measures?

CalMatters is a public service journalism company committed to explaining how the California State Capitol works and why it matters. For more stories from Dan Walters, visit calmatters.org/commentary


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