IGA Tradeshow: California tribes won’t bring back sports betting initiative until 2026, if then

March 30, 2023 5:37 PM
Photo: CDC Gaming Reports
  • Buck Wargo, CDC Gaming Reports
March 30, 2023 5:37 PM
  • Buck Wargo, CDC Gaming Reports

Based on the latest polling, California tribes believe they’re well positioned to land retail sports betting at their casinos, but don’t expect the issue to return to a vote until the 2026 election cycle — at the earliest.

Story continues below

The tribes are polling well with the public in the aftermath of November’s two failed ballot measures to add sports betting in the state.

Proposition 27, the initiative pushed by commercial-gaming interests for a mobile component, continues to tank, according to Jacob Mejia, director of public affairs for the Pechanga Development Corporation. The measure lost in November with 82% voting against it, despite DraftKings, FanDuel, BetMGM and other commercial gaming interests from outside the state spending hundreds of millions of dollars on its behalf. It was opposed by the tribe’s Prop 26, which would allow retail sports betting at tribal casinos and horse tracks. Prop 26 failed by garnering only 33% of the vote.

Since the election, tribal favorability ratings have rebounded to 70%, while 67% of voters are in favor of allowing sports betting in person, the highest it’s been in two years. Californians recognize the tribes’ contributions to jobs and economic development, Mejia said.

“That says a lot about the trust the tribes have earned from the voters of California,” Mejia said. “The biggest tactical mistake they made in the campaign was trying to pit tribes against one another. They obviously paid a price for that.”

Tribes continue to worry that commercial enterprises will encroach on their gaming exclusivity with the launch of mobile sports betting and that could ultimately lead to online casinos.

“The tribes saw it coming and weren’t going to back down,” said Victor Rocha, the conference chairman who oversaw the panel discussion. “And tribes won’t back down next time.”

Mejia, who coordinated the tribal campaign for yes on Prop 26 and no on Prop 27, in which tribes spent more than $200 million, called it a “landmark victory.” Still, commercial operators are likely to bring forward more ballot measures in the future, even though “a clear message was sent not to come in and mess with California tribes.”

Mark Macarro, chairman of the Pechanga Band of Indians, said if the commercial operators did their due diligence and opposition research, it didn’t show during the campaign. Tribes have historically had mid-60% support since California legalized tribal casinos in 1998 through Proposition 5, he said.

“They greatly underestimated our intelligence,” said Greg Sarris, chairman of the Federated Indians of Graton Rancheria. “They also underestimated what we can do when we work together. Coming back, they’re going to have a hard time justifying spending that money again to shareholders. That doesn’t mean they won’t. But they’ll have to change up the act. They failed miserably. They were arrogant and underestimated us, but they will regroup.”

Macarro said even though the tribes’ retail sports-betting option was also defeated, that doesn’t mean it won’t pass in the future. Efforts to legalize marijuana in the state failed before finally getting approved, he said. But there are no plans to go back on the ballot in 2024.

“This is only going to happen in California if all the tribes feel like there’s a win there for them,” Macarro said. “I don’t know exactly what that means. For some tribes, it means mobile gaming is a great equalizer for those tribes that have brick-and-mortar casinos. That’s a reality and we have to contend with it. For other tribes, it means preserving brick-and-mortar gaming operations for as long as possible. Most tribes think preserving brick-and-mortar, while making preparations for legalization of sports betting in a digital format in the next two to eight years, probably makes more sense. This has to involve all tribes. Many of us have resolved to do things differently, so we don’t have that type of outcome. It’s a juggernaut, but not impossible (to get this approved). It will take some work.”

Mejia said that not once in polling did they see more than 36% support for mobile sports betting. Prop 26 received twice as many yes votes as Prop. 27. “That tells you something about the level of comfort voters have with tribes.”