California’s Indian Country continues to gear up in its fight against sweepstakes operators.
The Indian Gaming Association hosted another webinar last week to talk about California Assembly Bill 831, aimed at dismantling the sweepstakes industry and holding accountable the entire ecosystem, from operators and payment processors to celebrity endorsers.
At the same time, Victor Rocha, conference chairman of the Indian Gaming Association and webinar host, said the inevitable collapse of sweepstakes, a form of online gaming, and daily fantasy sports is fueling a migration into sports-betting-like prediction markets, raising urgent questions about jurisdiction, compact integrity, and the future of exclusivity in California.
The webinar featured James Siva, chairman of the California Nations Indian Gaming Association, Dustin Gouker, an analyst with the Closing Line, and James Giles, IGA executive director.
Siva and Rocha noted that the sweepstakes industry is trying to divide tribes over AB 831, by getting tribal leaders from the Sherwood Valley Band of Pomo Indians, Big Lagoon Rancheria, and Kletsel Dehe Wintun Nation to oppose it.
“AB 831 is going to and what (sweepstakes operators are doing to divide tribes) shows a lack of imagination,” Rocha said.
Tribes accused FanDuel and DraftKings of doing the same thing in 2022 when they tried to pass mobile sports wagering, a referendum that failed overwhelmingly.
“This is the classic divide-and-conquer tactic. These companies they try to pick off some of the small non-gaming tribes and make outlandish promises to them,” Siva said. “What it comes down to in the end is asking them to sell a little of their sovereignty.”
Rocha jumped in and said it’s also selling the sovereignty of other tribes who count on their casinos and gaming revenue to support their services.
“I don’t blame them for making though decisions for the betterment of their people,” Siva said. “Some of the tribes that announce these partnerships still struggle to provide basic resources for their members. It’s a shame that tribal brothers and sisters in this state are living in those conditions today. At the same time, collectively, we’ve done so much to improve the lives of every single tribal person in California.
“We’ve done that by using gaming as a way to increase their tribal economies and as an expression of our sovereignty,” Siva said. “At the core, it’s not about the economics or the money, but reminding everyone about our status as sovereign nations within the United States.
“With these agreements, they’re trying to lessen what that means and move tribal gaming to similar discussions of every other industry. Tribal gaming is as different from commercial gaming as it gets. That’s why they try to take advantage of that and lessen that argument.”
Siva said they can do some better outreach to those tribes. It’s difficult, but they need to share information and let tribes know that they can’t trust what these companies are telling them.
“We can stick together and make this happen,” Siva said. You don’t need to partner with them. Why would you trust an outsider when we have tribes willing to do this with you? It’s a desperate last-minute maneuver from these companies. They see the writing on the wall. I don’t see this having much of an effect. Everyone understands what they’re doing. It’s another hollow attempt to slow this process down. These people are looking for the weak points.”
Siva said they have strong support for AB 831 and that it’s moving quickly through the California Legislature. It helps that they have support from past opponents on sports betting expansion, such as FanDuel and DraftKings, he added.
“It’s the enemy of my enemy is my friend more than they actually support the cause,” Siva said. “We hope to have some traction on this, but at the same time, prediction markets continue to grow in market share here in California.”
Siva said sweepstakes aren’t that far away from sports betting, while the prediction market operators fall under the federal Commodity Futures Trading Commission that has allowed them to continue operating for now.
Giles is worried that even by passing legislation, states may not be able to slow down sweepstakes operators, due to the use of cryptocurrency that will make it easier to play.
Siva expects a lawsuit upon passage of the bill, but turned his attention to prediction markets. He talked about FanDuel partnering with the Chicago Mercantile Exchange that lays out a path for them to enter the sports-prediction industry.
“We’ve seen sweepstakes companies move to prediction markets and now everybody has seen it as the way to get into California that they haven’t been able to find up until now,” Siva said.
Gouker said there’s no way that FanDuel can sit out and let prediction-market operators like Kalshi and Polymarket dominate the marketplace.
“They’re doing this the smartest way they can,” Gouker said of FanDuel. “They are partnering with an unimpeachable group in CME, a buttoned-down company in the financial world. They’re only doing financial stuff in the beginning. There’s no doubt that they’re building a platform, so they can do sports betting down the line. They’re hedging, saying we need to be ready to move on this in a world where Kalshi wins in court and sports betting is legal in 50 states. We have no choice but to do something about it.”
“Maybe they go away with all of this legal wrangling in federal court across the country, but maybe they don’t,” Gouker said. “It’s hard to handicap, a coin flip. Kalshi still has a good case. It might get to the Supreme Court or it might not. I don’t think you can say we’re going to win in court. That could be three years down the road and Kalshi and Polymarket are entrenched as the leaders in federally regulated sports betting. You can’t twiddle your thumbs if (you’re FanDuel).”
