The alliances for and against tribal-controlled sports betting and the rival operators’ measure that would legalize online sportsbooks and use taxes raised to fight homelessness have largely gelled. With the election about three months away, let the huge expenditures of money begin! In fact, they have already begun.
The California Democratic Party July 10 voted to oppose the online sports betting measure, Proposition 27, proposed by seven out-of-state sportsbook companies led by DraftKings, BetMGM and FanDuel. The Democratic Party’s executive committee voted to remain neutral on Proposition 26, the tribal proposition that would legalize sports betting in tribal casinos and racetracks only, while expanding the casino games they can offer.
The party largely controls the levers of power in the Golden State, having more than two-thirds of both houses of the legislature and the governor’s office.
The electoral battle over Propositions 26 and 27 is the fiercest in the two-plus decades since California voters amended the state constitution to authorize tribal gaming. In each subsequent electoral challenge to their monopoly of Las Vegas style gaming, the tribes built on past successes and expanded their reach. Proposition 26 would do that also by adding craps and roulette to the casino games they can offer.
The campaign promises to be comparable to the most expensive ballot proposition to date in California, the 2020 fight over Proposition 22. In that campaign, the state’s gig economy, led by Uber, Lyft and DoorDash, spent more than $200 million to overturn the law limiting independent contractors.
The Coalition for Safe, Responsible Gaming is leading the fight against the operators’ measure and for the Tribal Sports Wagering Act. It has corralled more than 80 civil rights organizations, religious leaders, public safety groups and tribes. It is led by the San Manuel Band of Mission Indians, the Rincon Band of Luiseño Indians and the Pala tribe. Its ranks include almost 40 tribes and tribal organizations.
Operators’ proposal, known as The California Solutions to Homelessness and Mental Health Act, has fewer supporters. But it does have supporters, including some city mayors. They like its focus on fighting the homeless problem. It is also supported by three small gaming tribes.
In fact, it is possible that both propositions could pass, although the tribes say the operators’ measure represents a dagger aimed at their sovereignty. Proposition 27 would authorize statewide digital wagering with platforms tethered to tribal casinos. Operators would pay a $100 million application fee and only those who operate in ten U.S. jurisdictions would qualify. This would lock out smaller operators, tribes argue. Individual tribes would pay $10 million if they chose to operate under their own name. The funds raised by a 10 percent tax on gross revenues would be earmarked to fight California’s homeless problem and to treat mental health issues.
The Democratic party’s stance immediately won praise by Reid Milanovich, tribal chairman of the Agua Caliente Band of Cahuilla Indians, who declared: “By opposing Prop 27, California Democrats rejected out-of-state corporations and reaffirmed their commitment to California’s Indian tribes.” Milanovich added, “Prop 27 is not a solution to anything. It would expose children to a massive expansion of gambling and turn every cellphone, gaming console, tablet, and laptop into a gambling device. Prop 27 is a direct attack on tribal gaming and Indian self-reliance.”
California Democratic Party Native American Caucus First Vice Chairwoman Dr. Joely Proudfit added, “There is no question that Proposition 27 is an assault on tribal sovereignty. Proposition 27 threatens decades of progress for California’s Indians, erodes Tribal sovereignty, and threatens the future economic sustainability of California’s indigenous people.”
Tracy Stanhoff, president of the American Indian Chamber of Commerce of California, said in a release, “The revenue generated by this measure will bring tens of millions of dollars each year to our state budget and local governments alike. It will also support tens of thousands of jobs. It’s a win for tribes and all Californians.”
Other tribes opposing Prop. 27 include the Cahuilla Band of Indians, whose Chairman Daniel Salgado described how it could hurt his 200-member rural tribe that owns the small Riverside County-based Cahuilla Casino that offers limited gaming. “From our tribe’s perspective, it hits on a couple of notes—tribal sovereignty and self-determination.” He continued, “It takes away a tribe’s sovereign right to choose. We look at how many people are actually going to participate. There are a little over 60 tribes that offer gaming facilities, so those who don’t participate can’t be a part of this. When you look at limited gaming tribes like ours, we’re forced to make a determination.”
Salgado concedes that someday online sports betting will come to California, but argues, “We want to ensure that we continue to maintain the primary responsibility for regulating the gaming environment. We want to make sure we help shape that and create an environment that is safe.”
One non-tribal supporter of Prop. 26, the Riverside Sheriffs’ Association, said in a statement: “Requiring individuals to be physically present in-person to place bets is the safest and most responsible way for California to legalize sports wagering,” adding, “It is the best way to prevent underage gambling and ensure people are not placing bets illegally, and it provides funding for enforcement against illegal gambling and problem gambling programs.”
The Urban League of San Diego County added, “California’s tribes have been strong partners to the San Diego community. The Tribal Sports Wagering Act will create new economic opportunities for tribes and all Californians – creating new jobs and revenues that will benefit our region as a whole.”
The state’s gaming tribes are mostly united in opposing Prop. 27, but not in how they would approach sports betting. A second tribal group, Stop the Corporate Online Gambling Prop, is led by the Pechanga Band of Luiseño Indians, the Agua Caliente Band of Cahuilla Indians, and the Yocha Dehe Wintun Nation. It claims 50 tribal allies. The same group last year supported a measure that would have allowed mobile sports betting, but controlled by tribes.
All of that said, homelessness is considered the Golden State’s number one issue. A measure that promises to spend 85 percent of the taxes raised on fighting that, and on the related mental health issues, makes a potent campaign pitch. The remaining 15 percent would go to tribes that don’t have casinos.
According to the operators’ website: “The California Solutions to Homelessness and Mental Health Act is the only measure on the 2022 ballot that will guarantee hundreds of millions of dollars each year to fight homelessness and fund mental health treatment in California. The initiative achieves this by licensing, tightly regulating, and taxing online sports betting.”
Finally, the state’s card clubs and several cities that get a lion’s share of their budgets from them are trying to defeat Prop. 26. Taxpayers Against Special Interest Monopolies claims the measure violates the state constitution. In a press release the group declared, “the measure puts more than 32,000 jobs, $1.6 billion in wages, and $5.5 billion in total economic impact at risk. Cities rely on this revenue for resident services such as public safety, housing and homeless programs.”
