Published: February 13, 2022

Tribes join expensive California sports betting fight

Three prominent Native American tribes in California will pour at least $100 million into an expensive fight over sports betting later this year, escalating a war between tribal governments and multinational gaming companies over what could be one of the world’s largest untapped betting markets.

The tribal governments — the San Manuel Band of Mission Indians, the Rincon Band of Luisueño Indians and Wilton Ranchiera — said they would spend the money to defeat what they called a move by out-of-state interest groups to corner the betting market in California.

“The out-of-state corporations will export money from California and have a track record of questionable operating practices,” said Rob Stutzman, a longtime Republican strategist in California who has signed on to the tribal campaign.

The ballot measure proposed by those companies, through a coalition dubbed Californians for Solutions to Homelessness and Mental Health Support, is one of four seeking to gather enough signatures to win a place before voters this November.

BetMGM, Bally’s, Penn National Gaming and the parent companies of FanDuel and DraftKings have already contributed $100 million to that campaign.

The measure would legalize sports gaming for those who are not on Native lands and levy a 10 percent tax on bets and licensing fees, most of which would go toward tackling homelessness in a state where the number of unhoused people has become a crisis.

Its supporters have already notified the California secretary of state’s office that they have collected more than a quarter of the nearly 1 million signatures they would need to qualify for the ballot. But its opponents say it would send billions of California dollars to companies based elsewhere, at the expense of tribal sovereignty.

“Our measure is proving to be incredibly popular with Californians. Ours will be the only measure on the ballot that will guarantee hundreds of millions annually to help solve homelessness and support mental health care,” said Nathan Click, a spokesman for the casino companies’ campaign. “Nearly half of the country has now authorized online sports betting — proving it can be safely regulated and generate significant revenue to help states solve big problems.”

The three tribal governments are among 18 tribes that support a different ballot measure that has already qualified, one that would legalize sports wagering only on tribal lands. That campaign has raised nearly $13 million — separate from the tribes’ commitment against the other measure — from tribal governments.

Underscoring just how lucrative the California sports betting market would be to the winners of the fight — and how fraught the battle is — several casinos that already operate in the state have dumped $25 million into a campaign opposing the tribes’ preferred initiative. Two card room–style casinos in Los Angeles have contributed $5 million each to that campaign.

The card rooms have their own campaign underway to secure a slice of the sports betting pie. That measure, dubbed the California Legalize Sports Betting Initiative, would allow card rooms to operate both in-person and online, with some of the money directed to public education, homelessness and affordable housing.

Because of the state’s size and influence over the direction of the rest of the nation, California ballot measures are routinely among the most expensive political fights in America. One initiative, fought between gig economy companies like Uber, Lyft and DoorDash and labor unions in 2020, attracted nearly a quarter billion dollars in spending — a figure the current fight over sports betting appears set to eclipse.

Some of the state's most prominent political strategists have been lured into the fight: Stutzman, a onetime top adviser to former Gov. Arnold Schwarzenegger (R), joins Democratic strategist Roger Salazar, a veteran of the Clinton administration and former Gov. Gray Davis (D), in backing the tribal campaign. Click is a former top spokesman for Gov. Gavin Newsom (D).

Following a 2018 U.S. Supreme Court ruling that struck down a ban on sports betting, online and mobile wagering is now legal in 33 states and operational in 30 of those states and the District of Columbia.

California is among the last holdouts, along with Texas and Florida, the second- and third-most populous states in the nation respectively. So is Ohio, meaning that residents of the two states that are home to the teams that will meet in this weekend’s Super Bowl at Los Angeles’s SoFi Stadium — the Los Angeles Rams and the Cincinnati Bengals — will not be able to wager legally on their teams.

Americans plan to spend more than $7.6 billion betting on the Super Bowl, according to estimates from the American Gaming Association, more than double the amount that was wagered on last year’s match-up between the Tampa Bay Buccaneers and the Kansas City Chiefs.

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