The appeal of a tribal casino lawsuit against the state of California could have many consequences. One of them being the potential further delay of legal California sports betting.
Last week, three California tribal casinos appealed a lower court dismissal of their lawsuit to the US Ninth Circuit. As long as the lawsuit remains unsettled, it means uncertainty for legal sports betting in California.
Why the tribal casino lawsuit could delay sports betting
Unless the California Gaming Association and the plaintiffs reach a settlement, the appeals court will determine whether the state is in violation of its own laws by allowing California cardrooms to operate casino-style games. The Kumeyaay Nation, Viejas Band, and Yocha Dehe Wintun Nation allege state law gives them exclusive rights to house-banked games.
While that dispute has little to do with sports betting on the surface, a broader look at the situation makes the possible effects obvious.
Two state lawmakers have introduced a sports betting amendment to create a voter referendum next fall. If approved, the ballot measure would amend the state’s constitution to allow the Legislature and Gov. Gavin Newsom to legalize sports betting.
To get on the November 2020 ballot, however, the bills need a super-majority (2/3) of votes in both the state Assembly and Senate. That’s where the influence of tribal casinos comes in.
How California tribal casinos could sway a vote on sports betting
The state’s tribal casinos have deep pockets and therefore powerful lobbying arms. That translates to the ability to sway votes their way.
Tribal casinos are opposed to any expansion of gambling in California, especially when they are in a legal battle with the state over rights to existing games. Such opposition has already indefinitely delayed the legalization of California online casinos.
In order to get the support of tribal casinos for sports betting legislation, the state may have to bend to their wishes on cardroom regulations. It’s a classic quid pro quo.
Complications of giving California casinos what they want
The issue with going forward with that tit-for-tat is the interests of card room operators. Just like the tribal casinos, they have their resources and legislative influence.
Barring card rooms from offering all the games they currently operate would cut into their revenue. Even if card rooms could get in on potential legal sports betting, it’s questionable whether that would be sufficient to replace that revenue.
So far all parties in the lawsuit seem determined to argue their cases to the end. It’s unclear whether the tribal groups would appeal to the US Supreme Court if they lose at the circuit level.
What is clear is that as long as the lawsuit endures, the likelihood of getting enough support to pass any gambling expansion bill remains low. That means the legalization of sports betting in California could be years off and require the current gambling landscape in the Golden State to be dramatically changed.