Caesars to stay on sidelines in sports-betting ballot fight in California

August 3, 2022 6:02 PM

Caesars to stay on sidelines in sports-betting ballot fight in California

Photo: Shutterstock
  • Buck Wargo, CDC Gaming Reports
August 3, 2022 6:02 PM
  • Buck Wargo, CDC Gaming Reports
  • California
  • Sports Betting

Caesars Entertainment will sit out the battle among California tribes and gaming operators in November over the legalization of sports betting in the state.

FanDuel, DraftKings, BetMGM, WynnBet, Bally’s Interactive, Barstool Sports, and Fanatics are spending tens of millions of dollars on television advertising to legalize online sports betting in the state that currently doesn’t allow any sports wagering. In that measure, mobile wagering would be tied to a tribal property.

The tribes have their own measure that would allow retail sports betting only at tribal casinos and four horse-race tracks in the state.

Supporters of the online measure said customers want access to mobile betting and that the tax revenue generated by mobile would help the homeless.

Tribes argue that out-of-state interests are not only a threat to their sovereignty and exclusivity over casino gaming, but also sports-betting operators are doing it for their own financial benefit and will take revenue out of California.

Caesars Entertainment CEO Tom Reeg told Wall Street analysts this week during the company’s second-quarter earnings call that the national gaming giant is not taking a side and won’t be making any contributions in the election battle.

“In terms of California, we’re not part of either initiative,” Reeg said. “We want to see sports betting in every jurisdiction that we can find. We’d love to see icasino in every jurisdiction we can find. We have a decade-long relationship with a number of tribes across the country where we’ve been managing their assets through multiple contract renewals, which was a unique position when we bought Caesars. I’ve never seen that before.”

Reeg reiterated that Caesars doesn’t want to oppose tribal interests when the company is their partner. “So we’ve remained neutral in California throughout,” Reeg said. “You should expect that to be the case in any state where tribes are at odds with the commercial interest.”

Casino consultant Brendan Bussmann, managing partner of B Global, said it’s prudent that Caesars, as one of the largest sports-betting operators in the U.S., is letting the people decide. Caesars has worked with tribes for many years and it’s best for the company to stay neutral, he said.

“The challenge with the California initiatives, and you will continue to see this in the next 100 days, is that this is a race to the bottom when it comes to going through a campaign. It’s going to get more vicious and (Caesars) may end up being the only survivor, because they stayed on the sidelines.”

Bussmann said that, based on the advertising and what he’s seen on the ground in California, both sides are cutting into the other’s support. That creates enough doubt in voters minds’ that they’ll vote against both initiatives.

Tribal leaders have mentioned the same scenario over the past two years: that competing ballot measures would likely cancel each other out and leave the status quo with no sports betting. They said that was fine with them.

“At the current rate of spending and messaging, I’m not sure how either passes,” Bussmann said. “Very seldom do you have a situation where you have two competing ballot measures that roughly do the same thing where both pass, or one passes and the other doesn’t. It’s a hard message to get across. It’s confusing for voters and messaging becomes complex. It’s not just gaming, but any ballot initiative.”

Victor Rocha, a member of the Pechanga Band of Luiseño Indians and editor of, applauded Caesars for the move and compared it to its predecessor, Harrah’s Entertainment, staying on the sidelines in 1998 on a ballot measure that paved the way for California tribal gaming, an initiative that faced opposition from many Nevada gaming interests.

“The only one that broke ranks was Harrah’s,” Rocha said. “They were the only ones that stayed out of it. I’m glad to see they’re sticking with their guns.”

After that passage, Harrah’s signed a deal with the Rincon Band of Luiseño Mission Indians and today operates Harrah’s Southern California in San Diego.

“Harrah’s, a.k.a. Caesars, has a long tradition of standing with the tribes,” Rocha said. “There will be other gaming (technology) companies that won’t go against tribes. The opposition comes from a new generation of sports-betting guys who don’t have the institutional knowledge or respect.”

Rocha said the company’s stance could benefit Caesars with tribes over the long term, because it shows loyalty and principle.

“Tribes are looking for people who stand by them when their backs are against the wall,” Rocha said.

The Rincon was part of a tribal coalition backing a mobile-sports ballot measure that was withdrawn before enough signatures were gathered.