Pechanga Chairman Mark Macarro says California tribes need to have conversations on online sports betting over the next year. But that, in the wake of their attempt to pass Prop 27, commercial sportsbooks won’t be allowed at the table.
Wearing a t-shirt reading, “not today, colonizers,” last week at the Global Gaming Expo in Las Vegas, Macarro made it clear that he isn’t coming out of the election seeking a kumbaya moment with the companies who backed online sports betting Prop 27.
In a conversation with PlayCA and LegalSportsReport, Macarro addressed the vicious campaign battle over California sports betting and what it means for legalization efforts going forward.
With Prop 27 and his own in-person tribal sports betting Prop 26 likely headed to defeat on Nov. 8, Macarro declared “it is a victory” for California Indian tribes.
Do Californians want online sports betting?
As one of the foremost tribal leaders in California, Macarro and Pechanga took the lead in developing Prop 26 and opposing Prop 27.
With Prop 26, Macarro wanted to take an incremental approach to sports betting by starting only at California tribal casinos and horse racetracks.
Macarro claims that tribes had a practical reason to hold off on online sports betting. Mobile sports wagering seems to have support in most areas of the US. It’s legal in 27 states, with voters approving the activity in all five states it had previously gone on the ballot.
But he said three years of internal polling indicated that 62% of California voters oppose mobile sports betting.
According to Macarro:
“I think the silver lining here is that the voters of the state of California don’t like mobile gaming. They don’t like mobile sports betting. The voters of the state, they’re fearful of internet poker and internet gaming. … They don’t want mobile anything. They just don’t. As long as that is the case, it doesn’t much matter how much money they throw around.”
With only 27% of voters supporting Prop 27 in a recent poll from the UC Berkeley Institute of Governmental Studies, it’s hard to argue with these sentiments. But that’s with Prop 27 facing two $100-million tribal opposition campaigns.
What if there were an online sports betting proposal supported unanimously by tribes?
“We polled it,” Macarro said of tribal-backed mobile sports betting. “It polls better than what DraftKings and FanDuel were doing but not enough to put it over the hump.”
Macarro says California voter sentiments toward online sports wagering need to change for legalization in 2024.
He sees the pathway to mobile sports betting as “changing the hearts and minds of voters in the state of California in a sincere way.”
Campaigning against Prop 27
Macarro and four other tribal leaders originally filed their sports betting initiative intending to get it on the 2020 general election ballot. When the pandemic delayed signature gathering, they sought to make the 2021 gubernatorial recall election. But the California Secretary of State opted to keep that ballot to the recall question.
California Indian tribes want more time to figure out online sports betting. Sportsbook companies such as DraftKings and FanDuel didn’t want to wait.
They filed Prop 27, attempting to do online sports betting through tribal partnerships and put the revenue toward addressing homelessness.
But very few tribes would get the opportunity to offer online sports betting under Prop 27. And tribes would have to fight each other for those partnerships, giving all the negotiating leverage to the operators. The way it handled tribal sovereignty also irked tribes.
Macarro explained:
“It would be a massive shift of how the status quo is for tribes operating brick-and-mortar gaming facilities throughout the state. And that is the bedrock of the tribal economy that until tribal gaming had not really been there. And now it’s absolutely threatened by this potential onslaught of commercial gaming from FanDuel, DraftKings, et al.”
Three limited-gaming tribes did sign on to support Prop 27. But 65 tribes opposed the measure.
“I think they promised the world somehow to three tribes and they did commercials and that confused the landscape,” Macarro said. “But it would have been one of the most destabilizing things to Indian gaming certainly in California ever. So, thankfully, this is not going to happen in this cycle. It’s going to repeat in two years when DraftKings and FanDuel make another attempt at winning over the voters.”
Pechanga still against online sports betting, but that could change
At least anecdotally, if Prop 26 had passed in 2020, previous discussions with PlayCA hinted that Pechanga likely would have sought online sports betting in 2024.
Going through two election cycles without establishing in-person sports betting, Macarro isn’t yet willing to back away from the incremental approach and support legalizing retail and online together in 2024.
“We’re super keyed in on what the research says,” Macarro said. “Maybe my answer would be different if you said you guys know that two years from now there will be a paradigm switch in how voters see the mobile gaming world and they will support it. If that’s the case, then we should look at what voters will support.”
Macarro is most concerned about online sports betting opening the door for online casino. Even though there’s evidence in other states that online casino doesn’t cannibalize retail casinos, tribes aren’t willing to bet all they’ve built through gaming on it.
“Sports betting right now is in position to be the game that legalizes the framework for mobile gaming. After that, what’s next? Is the entire casino floor on my phone? I think that not enough of us are looking at that issue and asking that question, what are the impacts on our brick-and-mortar operations? Will customers still come? What works in New Jersey, does it work for tribes in California? I don’t know.”
But he acknowledges that voter opinions can change quickly, and tribes will continue to monitor where voters stand on mobile gaming.
“Voters were against legalizing marijuana and gay marriage, and then they weren’t,” Macarro said. “Is there messaging that can change that? What is the catalyst to change those things? What is it that will be the tipping point for voters and when will that be? We’re trying to monitor that.”
Tribes need to figure out online sports betting
With Prop 27 apparently headed to a lopsided defeat, tribes will get the time they want to discuss the details of mobile sports wagering amongst each other.
Online sports betting presents a unique problem in California. There are more than 100 federally recognized Indian tribes, all with their own needs and circumstances. And there are not enough sports betting operators to go around.
With the current challenge from online sportsbook operators ending and knowing another is on the horizon, tribes need to come together and decide how to do mobile sports betting or risk having it dictated to them again.
“Tribes, if they haven’t had those conversations on how to move forward on mobile gaming, they need to,” Macarro said. “And then we need to have a group discussion to coalesce around something we think works.”
About 40 tribes didn’t take any position on either of the competing initiatives. San Manuel put out a possible preliminary blueprint for tribal-led sports betting that includes limiting apps to tribal brands and requiring in-person registration. Macarro isn’t sure that will work.
“We need to have the brick-and-mortar legalization first for the tribes so we can have those conversations and say what do you think about that? Will this work for your tribe? Some may say well, up here in this Northern California county, no, it won’t because we don’t have very many people who can come to our doors anyway. So they might favor something that’s completely different. But the fact is we just haven’t been able to get to that point.”
Expect mobile sports betting to be a hot topic at tribal meetings for the next year.
“If tribes don’t align, I don’t know if anything happens,” Macarro said. “Or any number of things could happen, all of them not good.”
Tribes don’t plan to include sportsbooks in discussions
Macarro doesn’t welcome commercial sportsbooks to the table for these discussions on online sports betting.
“I don’t think that’s part of the strategy that we need to engage them,” Macarro said. “Tribes need to be the ones to decide what the framework for legalization looks like. I suppose there can be others in the car, but if the tribes aren’t in the driver’s seat, we’re going to be taken for a ride.”
The 2022 campaign has created some bad blood between California tribes and sportsbook operators. Victor Rocha, who owns Pechanga.net, recently said that commercial sportsbooks need to be subservient to the tribal vision on gaming to come to the table and work out a compromise with tribes.
But Macarro said tribes won’t work with the operators to come up with a solution for mobile sports betting. They might even try to lock them out of the market of treat them like mere platform providers.
“Inviting the DraftKings, the FanDuels, etc., as subservient partners — subservience isn’t the issue. It’s that they would be sitting essentially in parity with tribes in figuring out legalization. That’s not our goal, how do we bring these folks in so that we can legalize together? No.”
