Update On Sports Betting Initiatives Entering 2022 Election Year

Written By Matthew Kredell on January 12, 2022

Looking ahead to November of 2022, Californians could find three sports betting initiatives on the election ballot. Or they could find none.

All four sports betting initiatives filed in California are in a state of flux.

  • The retail-only tribal sports betting initiative faces a legal challenge from card-room interests.
  • The card room initiative never left the starting gates. It is not collecting signatures.
  • An operator-backed initiative recently reached the 25% threshold for signature collection.
  • A mobile sports betting initiative backed by several tribes received title and summary.

Voters could legalize sports betting in some form come Nov. 8. But, entering the year, none of the initiatives are in a comfortable spot.

And the battle has only just begun. One person involved in California efforts gave 50/50 odds that they all take each other out in the end.

Tribal mobile initiative gets green light

The California Attorney General issued title and summary Tuesday to the final proposed measure.

That gives the petitioning tribes — San Manuel, RinconGraton Rancheria, and Wilton Rancheria — permission to gather signatures. But the tribes are sitting at the light for now.

The tribes have yet to make a decision as to whether to move forward with the initiative.

Here’s the summary that would appear on petitions for the measure:

ALLOWS IN-PERSON AND ONLINE SPORTS WAGERING AND OTHER NEW TYPES OF GAMBLING. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE. Legalizes in-person sports wagering, roulette, and dice games on tribal lands, and online sports wagering statewide, if operated by federally recognized Indian tribes under (1) compacts approved by Legislature, (2) the model compact approved by this measure, or (3) laws enacted by this measure and state regulations approved by tribal representatives. Sports wagering limited to persons 21 and older. Directs 15% of sports-wagering profits to
nonparticipating tribes and 10% first to regulatory costs and then to homelessness/mental-health programs.

The summary does note that funds directed to the homelessness fund would first go toward regulatory costs.

Included with the summary is language from the state’s fiscal impact estimate of the measure. It provides a wide range for revenue from the tens of millions to mid-hundreds of millions of dollars annually. That could prove problematic next to the operator initiative that received no lower-end projection.

A federal court case involving the Seminole Compact in Florida also could play a part in the decision to move forward. Although the tribes amended their initiative in response to a district court throwing out the compact, uncertainties remain.

The tribes already filed their initiative late, meaning they have little time to make a decision. The 997,139 valid signatures required to make the ballot need to be in by April 26.

Operator-led initiative off to a good start

The initiative backed by DraftKings, FanDuel, BetMGM and four more online sportsbook operators is well on its way to the ballot.

The operators began collecting signatures on Nov. 4, the same day the initiative received title and summary.

On Jan. 6, a proponent of the initiative sent a letter to the California Secretary of State certifying that the campaign obtained 25% of the signatures needed to qualify. That’s about a quarter-million signatures in two months.

Spokesman Nathan Click said in a statement:

“Our measure is receiving an overwhelmingly positive response from California voters as we collect signatures. Californians are very supportive of funding solutions to homelessness by regulating and permitting safe and responsible online sports betting. Late last year, the state’s non-partisan fiscal analyst found that our measure would raise hundreds of millions each year to help cities and counties fight homelessness, as well as provide significant revenue to California Tribal nations.”

However, it’s not all good news for the operators. Despite proposing that California online sports betting must go through Indian tribes and offering to support the retail-only tribal initiative, the measure has received nothing but hostility from tribal coalitions.

Qualified tribal initiative faces legal challenge

Hollywood Park Casino and Parkwest Casino Cordova filed a lawsuit on Dec. 21 asking the California Supreme Court to invalidate the retail-only tribal initiative.

The California Constitution states that ballot measures can’t deal with more than one subject.

Plaintiffs argue that the initiative has three parts:

  1. Legalizing in-person sports betting at tribal casinos and horse racetracks.
  2. Allowing tribal casinos to offer roulette and dice games.
  3. Creating the possibility to file civil lawsuits against card rooms for alleged violations of California gaming laws.

The defendant in the suit is California Secretary of State Shirley Weber, who certified the ballot measure.

Tribal leaders who are parties of interest in the case countered that everything in the initiative relates to gaming.

If the card rooms succeed, the one sports betting initiative qualified for the November ballot won’t make it.

Card rooms aren’t pursuing initiative

At this point, it seems clear that card-room interests won’t collect signatures on their initiative.

The measure received a title and summary back in October. Despite initial indications they would move forward with the initiative, petitioners have yet to collect a single signature.

Instead, card rooms are focusing on legal challenges to the qualified tribal initiative. If they were to succeed, their own initiative also would fail the single-subject requirement.

Legislative referendum on sports betting a wild card

If interested parties want to avoid a costly battle and come to a compromise on sports betting, the legislature offers that possibility.

In reaching the 25% signature threshold, the operator initiative triggered the requirement for a legislative hearing. The Governmental Organization Committee would handle the hearing.

That’s the committee that handled the sports betting referendum attempt in 2020. Sen. Bill Dodd, who led that charge, still chairs the committee. His counterpart, Assemblyman Adam Gray, has been replaced as chair by Assemblyman Jim Frazier.

The qualified initiative also likely would go in front of the GO committee. That could create an opening for compromise, but only if the tribes want it. And the tribes have a general distrust of the legislature that wasn’t helped in 2020.

Pechanga Chairman Mark Macarro explained at a National Indian Gaming Association conference in November:

“I think the last thing any tribe would want to do is roll the dice and say ‘OK, we’re going to trust the state legislature to legalize sports betting and look out for our best interests.’ Unfortunately, there are some tribes and tribal leaders that think that is a legitimate path forward. I personally believe it’s ludicrous because everbody gets to get into the legislative pot to make things happen in Sacramento.”

The legislature has until June 30 to pass a referendum to make the November ballot.

Photo by HAKINMHAN / Shutterstock.com
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Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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