The term “hub and spoke model” has been thrown around in recent months, and it could describe California’s future sports betting industry.
California Sports betting still isn’t legal, but that could change.
California tribes floated the idea of launching retail sports betting in two years, with online sports betting by 2028 at the earliest.
The details of this plan aren’t fleshed out, but there’s a good chance the tribes will end up utilizing the hub and spoke model for online sports betting.
What is a hub and spoke model?
Think of it as if you’re describing a wheel.
The hub, at the center of the wheel, would be where the gaming servers are located. In the scenario with Native American communities, they would be on tribal land.
These servers are at the center of sports betting and essentially act as an electronic version of a sports betting counter at a brick-and-mortar operation.
Sports bettors wouldn’t need to be physically located on tribal land when placing a bet from their phones. In the hub and spoke model, the connection between the servers and the players would be the spokes of the metaphorical wheel.
In short, this model would allow online sports betting throughout the state even though technically it would only be permitted on tribal land.
Florida proves this model can work
This isn’t a foreign concept.
Florida currently operates its sports betting industry with a hub-and-spoke model, which has withstood legal scrutiny.
A group called West Flagler Associates filed a petition with the U.S. Supreme Court arguing that Florida’s gaming compact, which employs the model, is illegal, since the tribal exclusivity essentially created a monopoly on sports betting for the Seminole Tribe of Florida.
Hard Rock Bet is the lone mobile sports betting platform in Florida. Pari-mutuel operators, like the ones represented by West Flagler, aren’t allowed to operate retail sportsbooks. West Flagler argued the Seminole Tribe’s operation was illegal since players who weren’t on tribal land were placing wagers from their phones.
The SCOTUS didn’t take the case, which meant Florida’s operation could continue.
Shortly after this, the Department of the Interior updated its federal regulations. The updates permitted this sort of a hub and spoke model nationwide.
California a topic at NCLGS conference
A number of gaming experts spoke at the National Council of Legislators from Gaming States conference this week.
Loretta Tuell, a lawyer who worked for years with the National Indian Gaming Commission, specifically mentioned California.
In 2022, voters rejected a measure permitting online sports betting in California. The measure failed because the tribes were not involved.
Commercial operators led that charge. And just like what happened with the failed Tribal Gaming Protection Act earlier this year, it wasn’t received well by Native Americans. As Tuell explained,
“When they weren’t in the room to decide how it would be implemented across the state, they reacted in the way that anyone would have, by asserting their exclusivity in a state where they worked a lot of years to develop infrastructure … and, most importantly, an active voice in various seats of power.”
What a hub and spoke model would look like in California
California’s tribes are going to be in control of the state’s sports betting industry. They want exclusivity, and at this point, it’s clear that’s what will happen.
Retail sports betting would likely only be available at their gaming facilities.
When California launches its online sports betting market, it could look similar to Florida’s: Online sportsbook servers would be located on tribal lands, but California residents could bet from anywhere in the state.
Given how popular mobile sports betting is compared to retail wagering, California and its tribes would be wise to allow bettors to place wagers even when they’re not on Native American land. And that’s a possibility thanks to the hub and spoke model.
