Tribal Online Sports Betting Initiative Amended To Deal With Florida Court Decision

Written By Matthew Kredell on December 14, 2021 - Last Updated on August 22, 2022
Signing Petition or Making A Decision For CA Tribe

Native American tribes backing a sports betting ballot initiative submitted changes Monday to how tribes can conduct mobile wagering.

No longer are the tribes trying to do online sports betting under the Indian Gaming Regulatory Act (IGRA) by locating servers on tribal lands.

In addition, the change comes after a federal judge vacated the Seminole compact with the state of Florida and made the tribe cease sports betting operations. The initial initiative proposal based its language on the Seminole deal, which got approval from the US Department of Interior, Bureau of Indian Affairs.

Tribal chairmen for the Federated Indians of Graton Rancheria, Rincon Band of Luiseno Indians, San Manuel Band of Mission Indians, and Wilton Rancheria filed the Age-Verified Tribal Online and In-Person Sports Wagering Regulatory Act on Nov. 5.

They had until Dec. 13 to amend their proposal with the California Attorney General.

New language for tribes to conduct mobile sports betting

Previously, the California tribes proposed to operate online sports betting in California under IGRA. They claim that bets placed statewide occurred on servers hosted on tribal reservations.

Presently, they seek to amend the California constitution so statewide online bets don’t fall under IGRA. That law centers around federal regulation of gaming on Indian lands.

The new initiative language states:

“A federally recognized Indian tribe with Indian land in California may at any time elect to offer online sports wagers entirely off of Indian lands and not be subject to the Indian Gaming Regulatory Act.”

Changes made to gain broader tribal support

Only four of California’s 108 federally recognized tribes signed on to support the proposed initiative. But proponents made it clear from the beginning that they wanted more tribal support. A week before filing the proposal, they sent the initiative out to tribal representatives for feedback.

Then they went out and made changes designed to garner more tribal support.

The first change plays nicer with the already qualified tribal retail initiative backed by the Pechanga Band of Luiseno Indians and a large coalition of tribes. It removes language that specified the proposal conflicted with the tribal retail initiative.

The next move aims to get support from smaller tribes in the state. It increases tribes adjusted sports wagering gross revenue share to the Tribal Sports Wagering Revenue Sharing Trust Fund to 15%.

Previously, tribes paid 10% into the fund, which goes toward tribes with no or minimal gaming revenue.

In return for exclusivity to operate online and in-person sports wagering, roulette, and games played with dice, tribes would pay another 10% of adjusted sports wagering gross revenue to the state to combat homelessness and mental illness.

More changes were made to the second tribal proposal

Here are additional fundamental changes made in the amended initiative:

  • Allows tribes to accept in-person account registrations for sports wagering at facilities within 10 miles of their Indian lands.
  • Caps management service providers partnering with tribes to operate online sports betting to 40% of net revenues. It also limits such partnership agreements to seven years.
  • Includes a provision that any court decision related to statewide online sports bets not occurring at the location of servers on tribal lands does not affect the exclusive right of tribes to conduct online sports betting.
  • It sets up an association of California tribal and state gaming regulators, including two representatives of each tribe’s gaming agency and two delegates from the state Bureau of Gambling Control and California Gambling Control Commission.
  • Instructs the California Gambling Control Commission to adopt online sports wagering rules and regulations. The rules and regulations need approval from the association.
  • $50 million would be transferred from the Indian Gaming Special Distribution Fund to the California Gaming Control Commission to offset initial implementation costs. Over the next ten years, the tribes expect the state to pay this money back annually from the California Homelessness and Mental Health Fund established by the act.

Next steps for tribal mobile sports betting initiative

Now that the petitioners finalized the initiative language, the next date to watch is Jan. 11.

That is when the California Attorney General must issue a title and summary for the petition. California’s Legislative Analyst and Department of Finance also will give a fiscal impact estimate report around that time.

Once the AG issues the title and summary, proponents can collect signatures. And they would need to start quickly.

This initiative was filed after two months after competing sports wagering measures from California cardrooms and sportsbook operators such as DraftKings and FanDuel. Meaning petitioners would get less than two-thirds of the usual six months to gather the required 997,139 valid signatures.

Over the next month, San Manuel and the other tribes will need to decide whether they want to go forward with the expensive effort to qualify their proposal for the ballot. According to a source close to the initiative effort, they are still weighing their options.

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