California tribal members say their opposition to online sports betting initiative Proposition 27 has a lot to do with not wanting to open the door for operators to offer CA online casino.
Comments made by DraftKings CEO Jason Robins earlier this month show why tribes have those concerns.
Speaking at the National Council of Legislators from Gaming States in Boston, Robins mentioned the ballot measure for the November 2022 election that dedicates 85% of mobile California sports betting revenue to homelessness and mental health support.
“We’re incredibly excited about the prospect of responsibly bringing online sports betting to the state while protecting minors and other vulnerable populations, and providing much-needed funding for critical issues like homelessness and mental health. It is creative solutions to societal problems like the aforementioned proposal that make me most excited for the possibilities in the gaming industry’s future.”
Robins then moved on to online casinos for the remainder of the short speech to state lawmakers from around the country.
“This just confirms what tribes have long suspected: Prop 27 is not about online sports, it’s about online casinos,” said Jacob Mejia, spokesperson for the tribal coalition backing the in-person tribal sports betting initiative Prop 26 and opposing Prop 27. “The out-of-state operators won’t stop at sports wagering. Their real goal is to turn every Californian’s cell phone, tablet and laptop into a full-blown casino.”
Roberts pitches iGaming as an additive to tribal casinos
Roberts noted that online casino is now legal in six states — Pennsylvania, Michigan, New Jersey, West Virginia, Delaware and Connecticut. And he contended that existing retail gaming operators in these states haven’t experienced the “hyperbolic doomsday scenario component recklessly predicted.”
He wasn’t specifically talking about California in regards to iGaming. But Roberts seemed to speak directly to California tribes when he then name-dropped a tribal partner.
He said he recently spoke with Chairman Rodney Butler of the Mashantucket Pequot Tribal Nation in Connecticut. Butler told him iGaming made a positive impact on the tribe’s overall gaming operations. DraftKings partners with the Mashantucket Pequot to offer sports betting and online casino.
“Other fears and stigmas emerge from certain brick-and-mortar gaming entities that think that the introduction of mobile sports betting and iGaming will take away customers and profits from the brick-and-mortar casinos or video gaming terminals. Nothing could be further from the truth. iGaming bolsters brick-and-mortar gaming businesses by allowing operators to engage with loyal customers outside the facilities and attract new customers from different backgrounds and demographics who have not previously been drawn to retail. And promotions from the online product can incentivize new and existing customers to visit the land-based facilities as well.”
Roberts finished by telling lawmakers they should consider the revenue potential from online casino. Especially with their states seeing rapid inflation and the potential for a prolonged economic recession.
“With the technology and industry proven, it is time for your states to add iGaming,” Roberts said. “Not in the future but now.”
Tribal members see CA online casino as real threat
At the Indian Gaming Association (IGA) conference in April, tribal members pointed to iGaming as the real intent of operators behind Prop 27.
“The commercial entities are coming for online sports betting now, but what they are really coming after is full iGaming in the future,” said James Siva, chairman of the California Nations Indian Gaming Association. “And that’s really the threat.”
IGA conference chairman Victor Rocha added:
“It’s not about sports betting. It’s about the next generation of gambling and online gaming. The tribes have exclusivity and they’re not going to give it up, and that’s that. We’ll take that one to the mat.”
Cody Martinez, chairman of the Sycuan Band of the Kumeyaay Nation, agreed. He said that operators don’t just want to partner with tribes on sports betting.
“We should be very cautious because once they’re in, they’re never going to leave,” Martinez said. “The golden goose is California. Why would they leave? Why would they want a narrow approach when they can just try to expand and expand and expand.”
Operators couldn’t make easy transition to online casino
In 2000, tribes won a ballot victory when voters approved a constitutional amendment granting them exclusivity for slot machines and house-banked card games. Since then, tribes have vehemently defended that exclusivity.
In Prop. 27, operators such as DraftKings seek voter approval to change the state constitution to authorize online sports betting. They would need to go through voters for another constitutional amendment in the future to approve California online casino.
Operators also would have to partner with tribes to offer iGaming due to their exclusivity over such activities. They already offer to do this for online sports betting in Prop. 27.
But the difference for tribes is that sports betting is a potential amenity to their brick-and-mortar properties. While casino games are the backbone by which tribal economies operate, providing income and services such as healthcare and education to their tribal members.