Tribal casinos make daring game to control sports betting in California

A powerful coalition of tribes recently proposed a state constitutional amendment that would allow betting only inside their casinos or the state’s four main horse trails. Their plan would also exclude licensed card clubs, which often compete with tribes, and ban mobile or online betting.

State lawmakers have proceeded with caution in drafting their own amendment to create a system for players to bet on the 49ers, Warriors, Giants and other sports teams, which they believe could generate hundreds of millions of tax revenues. Their plan would likely allow people to place bets on their smartphones and laptops.

But the tribal proposal, unveiled last month, represents a preemptive strike. If this were to pass, tribal casinos would be granted a near monopoly on sports betting while severely limiting the options for bettors – and the money the state could raise.

Eighteen tribes submitted the proposed constitutional amendment to the state attorney general’s office on November 13. Now they are waiting for it to be awarded a title and summary that would allow promoters to begin collecting signatures to qualify a measure for the November 2020 ballot. The ruling follows the May 2018 Supreme Court ruling that gave states the right to legalize and tax sports betting.

Since then, more than a third of all states have voted to legalize sports betting, and 13 already allow betting.

As drafted, the constitutional amendment would limit sports betting to casinos and racetracks, while imposing a 10% tax on bets made on the tracks. No payment would be required from tribal casinos, which, as sovereign governments, are exempt from state tax. Tribal casinos would likely pay state and local governments, but the amount and means of payment would be negotiated in agreements with each tribe.

Card clubs would be left out. Meanwhile, the proposal would expand the offerings of tribal casinos to include roulette, craps and other dice games, which the tribes have long wanted. Three of these casinos are now operating in the Bay Area: the San Pablo Lytton Casino, the Graton Resort and Casino in Rohnert Park, and the River Rock Casino in Geyserville.

State Senator Bill Dodd, D-Napa – who, along with Congressman Adam Gray, D-Merced, introduced a bill in June to table an amendment in front of voters to legalize sports betting – is among the critics of the tribal proposal. They intended to hold hearings in the state and negotiate with tribes and other gambling interests before developing a final version of the legislation.

Lawmakers must obtain the approval of two-thirds of each chamber of the legislature to table a constitutional amendment on the ballot. Tribes would need to collect 997,139 signatures from registered voters to qualify their amendment. Both would require a majority vote.

Dodd said the tribal plan offers too little for taxpayers, sports bettors or those who want to stamp out illegal sports betting, typically done through bookmakers or illegal offshore betting apps.

“It’s all about the tribes,” Dodd said. “It is not in the best interests of all Californians.”

California tribal casinos raked in $ 8.4 billion in 2016, the most recent year for which figures were available, according to the Casino City Indian Gaming Industry Report. These casinos were to pay the state $ 48.5 million under individually negotiated deals for the fiscal year ended June 30, according to the State Gambling Control Commission.

These funds support local government services and regulations and help prevent problem gambling.

Gaming experts agree that the future of sports betting probably does not exist in smoky casinos or other physical sites, but on cellphones, as it does in Europe and much of the world. rest of the betting world.

Dodd said players who already place bets illegally on their phones – using offshore apps they’ve downloaded – aren’t likely to redeem this convenience and head to the nearest tribal casino. There are 69 in California as well as four full-time racetracks, including Golden Gate Fields in Albany.

“We’re not going to take sports games out of the shadows” without mobile betting, Dodd said.

Tribes say their proposal, which would ban visitors from placing bets on state high school and college teams, recognizes that casinos and racetracks have the most experience with “well-regulated” gambling in California. .

“Tribal leaders believe this measure represents a viable path to voter approval of sports betting,” said Jacob Mejia, spokesperson for the coalition. “The measure provides a solid framework and requires additional legislation for its implementation. “

Allowing mobile betting in the proposal, he said, could doom it to the polls.

“Voters have legitimate concerns about mobile sports betting and would be very likely to oppose a proposal that allows mobile betting,” he said. “This measure represents a viable and measured path to well-regulated sports betting in California. We are not ruling it out in the future, but we believe that the proposed measure is the right approach at this stage. “

Although the proposal does not require any payment to the state, Mejia said, each casino would have to negotiate an agreement that would require “revenue sharing” with the state.

Kyle Kirkland, president of the California Gaming Association, which represents card clubs, called the tribal proposal “a selfish effort by some tribal casinos to expand their gambling monopoly.”

He said his association would work with lawmakers to craft a fair and comprehensive proposal.

“Californians want and deserve safe and legal choices for their gambling activities,” Kirkland said, “not just those alternatives dictated by interested tribal operators”.

Gaming experts estimate that $ 150 billion worth of sports bets are placed illegally across the country every year. Legal sports betting in California could generate “a few hundred millions” in tax revenue from an estimated $ 10 billion betting pool, said Paul Payne, spokesperson for Dodd.

Max Bichsel, US vice president of Gambling.com, a news and information site that compares legal online betting sites, said the tribal casinos’ move made sense.

“The goal is to protect what is theirs, and they rightly are,” said Bichsel, whose company website makes money when it connects players to other sites that take bets.

Tribal casinos claim they hold an exclusive right to casino-style gambling after California voters passed Proposition 1A in 2000. The law gave the state’s Native American tribes the exclusive right to negotiate agreements with the governor. for slot machine games and some card games like blackjack.

Bichsel said the introduction of sports betting on sites such as casinos and racetracks could ease the transition in California, which is considered the country’s largest market due to its nearly 40 million people.

Despite the tribes’ proposal, Dodd and Gray plan to pursue their own plans to change the state’s constitution, starting with a legislative hearing in January.

Dodd has said he hopes to come up with a plan that will bring in hundreds of millions of dollars in taxes and involve all of California’s gambling interests.

“We have a lot of work to do,” he said.

Michael Cabanatuan is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @ctuan

About Jennifer Schuman

Jennifer Schuman

Check Also

The hedge fund tycoons who remain the real winners of Brexit roulette

City’s multi-millionaire financiers who funded campaigns for Britain to leave the EU now say they …