Published: November 11, 2023

A ‘tech bro and a poker bro’ have a plan to legalize California sports betting — if they can convince tribes

Two entrepreneurs pushing to legalize online sports betting in California have run into a major obstacle: Native American tribes who would be the main beneficiaries but recoil at the prospect of self-interested outsiders trying to set the agenda for sovereign tribal nations.

The tribal entities with the largest traditional gambling operations in the state say they were not consulted about a proposed ballot initiative, backed by gambling industry veteran Kasey Thompson and blockchain executive Reeve Collins, that would open up the country’s biggest untapped sports betting market.

The high-risk, high-reward wager starts a new chapter in the enormously expensive battle over online sports betting in America’s most populous state. But its sponsors are facing questions about their tactics and funding. The timing, so soon after The Spectacularly Costly Failures Of Dueling Ballot Measures last year, has blindsided tribes who could doom the effort by withholding support or funding a counteroffensive.

"The entire approach has been error from the very beginning,” California Nations Indian Gaming Association Chair James Siva said in a webcast this week. "The approach of essentially holding tribes’ feet to the fire — you’re either going to get on board with this, or we’re going to do it — that’s never going to work with us.”

Thompson and Collins are making a huge bet that California’s powerful, entrenched Native American tribes will set aside their anger at being excluded from the start of the process and get on board. With the ballot initiative qualifying cycle well underway, they are forcing a swift decision from tribes that just spent hundreds of millions of dollars repelling out-of-state operators DraftKings and FanDuel and pursuing their own, unsuccessful betting initiative.

Thompson argued the financial upside makes for an irresistible offer. He is vowing to deliver a windfall for tribes by moving assets from illegal offshore sites where many Californians currently place bets into tribal control — transfers that he would manage, giving him a cut of the proceeds. He has promised to bankroll the campaign without seeking a dime from tribes, estimating that signature gathering for the ballot initiative alone could cost $25 million.

"People just think: ‘This is too good to be true,’” Thompson told POLITICO in one of his first extensive media interviews since submitting the ballot measure last month. "We knew we could make this happen and come up with a solution for the tribes.”

The tribes aren’t so sure. Thompson and his team have alienated potential allies by barreling ahead before securing the blessing of tribal leaders. That has fueled suspicion about his motives and criticism about a paternalistic strategy of dictating to tribes, even as he’s promised not to proceed without them.

The wary reaction has reinforced a truism of California politics: Don’t mess with tribes on their turf.

"If you come in and you disrespect tribes, you disrespect tribal leaders, you come in with this sort of air of you know what’s best for Indian country, you’re done before you even started,” Siva said. "Anyone who wants to come into this state, it starts and ends with tribes — period.”

A 2024 sports betting push looked unlikely after 2022’s nearly Half-Billion-Dollar Campaign yielded a costly stalemate and soured voters, who rejected both initiatives by more than 30 points. But Thompson upended that logic last month when he filed a pair of initiatives, writing to tribal leaders that "we do not believe that waiting another two years is in the best interests of the California tribes.

That set off a frenzy of unanswered questions: Who was this proponent? What was he getting out of this? And why was he going about it this way?

"Basically what you have is: a tech bro and a poker bro walk into a bar,” said Victor Rocha, a Pechanga member and political consultant who writes about gambling. "Or, walk into the secretary of state’s office.”

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