California Legislature Won’t Pursue Sports Betting Referendum

Written By Matthew Kredell on April 13, 2022 - Last Updated on August 22, 2022

Don’t expect the California legislature to involve itself in sports betting efforts this year.

A spokesman for state Sen. Bill Dodd tells PlayCA that he has no plans to introduce a legislative referendum for sports betting in California this session.

It was about this time in 2020 when Dodd attempted to pass a sports wagering constitutional amendment. But his efforts to forge a compromise between industry stakeholders failed.

Late last year, after filing four differing sports betting ballot initiatives, stakeholders speaking on background seemed to think a legislative path could be the best way to find a compromise.

If a compromise were reached through the legislature by the June 30 deadline, stakeholders could drop their competing initiatives to have one unified sports betting referendum on the ballot.

It’s now apparent that won’t happen. PlayCA spoke with Sacramento insiders involved in gaming about why a legislative solution won’t work in 2022.

Dodd doesn’t want to take up fight again

Any legislative attempt with sports wagering would have to start with Dodd, as it did in 2020. He chairs the Senate Governmental Organization Committee that handles gaming issues.

And, unlike two years ago, he doesn’t have a counterpart experienced in these matters. Previous Chairman Adam Gray, who dealt extensively on gaming issues dating back to the online poker legalization efforts, was removed from the GO chair by Assembly leadership last year.

Former Assemblyman Jim Frazier replaced him. After Frazier resigned midterm, in came Assemblyman Miguel Santiago, who represents an area of central Los Angeles.

In 2020, Dodd received backlash from Native American tribes who felt he didn’t involve them from the beginning.

He vowed then to come back and work on a constitutional amendment for 2022. But if he did at this point, there’s no reason to believe it wouldn’t get ugly again.

The Dodd spokesman told PlayCA that Dodd doesn’t think the legislature could come up with a solution this year because the various factions have never been able to agree on an approach.

There’s no legislative will for sports betting

This is a complicated election year in California. As a result of redistricting, there’s more election turmoil than usual.

More than 25 current California legislators are retiring or running for a different elected office outside the legislature.

Others are moving to unfamiliar new districts to avoid facing off against fellow incumbents.

One Sacramento insider explained:

“There’s a lot of musical chairs going on. When people run for reelection, they tend not to want to stick their neck out. Reaching grand, big deals becomes more difficult because people are worried opponents use it against them.”

It takes a two-thirds vote for lawmakers to put a constitutional amendment in front of voters. That’s always difficult on a gambling issue.

With politicians watching some heavyweights throw around a bunch of money on initiatives, they have no desire to get in the middle of that fight during an election year.

“If legislators are in a tough position, it’s easier to say you’ve got your ballot measures so I’m going to let the voters decide,” another Sacramento insider said. “You guys have your path, so let’s go down that path.”

Stakeholders too entrenched in sports betting positions

All parties are too committed down their paths to reach a compromise at this point.

Two coalitions of Indian tribes already are running negative sports betting campaigns against the operator-backed initiative. California cardrooms launched a “no” campaign on the already-qualified, brick-and-mortar tribal initiative.

Any possible deal would have to center around tribes giving up the Private Attorneys General Act (PAGA) provisions that open up the possibility to file civil lawsuits against card rooms for alleged violations of California gaming laws.

But tribes have shown no willingness to drop their attempt to shut down card rooms. Even more so than craps, roulette and sports betting, the PAGA provisions probably are the most appealing part of the initiative for tribes.

The operators, led by DraftKings, FanDuel and BetMGM, have nearly finished the expensive signature-gathering process to qualify their initiative for the ballot.

“To take something off the ballot, every stakeholder would have to be OK with it,” said a third Sacramento insider. “You can just see the landscape of where stakeholders are at this point.”

What the November 2022 ballot will look like

Without intervention from the legislature, sports wagering’s place on the November 2022 ballot is taking shape.

There likely will be two sports betting measures on the ballot:

  1. The qualified tribal brick-and-mortar initiative.
  2. An operator-backed online initiative.

The qualified tribal initiative still needs to survive a legal challenge from two card rooms in Los Angeles Superior Court. Card rooms contend that the measure violates California’s single-subject rule for ballot initiatives.

The operator-backed initiative still needs to qualify with 997,139 valid signatures. The California Secretary of State recommends that signatures be submitted to local counties for review by April 26.

However, there’s some leeway. A spokesman for the initiative tells PlayCA that the campaign is aiming to submit signatures in the first week of May and is in a strong position to qualify.

Two additional sports wagering measures filed aren’t trying to make the 2022 ballot.

The online tribal sports betting measure backed by the San Manuel, Rincon and Wilton Rancheria tribes is aiming for the 2024 ballot. Given that the San Manuel initiative is gathering signatures and eclipsed the 25% mark more than a month ago, it’s possible but unlikely that petitioners pivot back to 2022.

The initiative backed by card room interests never began collecting signatures. The card room backers instead opted to focus on their “no” campaign and legal challenges.

Dodd’s spokesman said the GO Committee will hold informational hearings this summer on the sports betting measures that qualify for the ballot. This comparison of their benefits to the general public could influence voters.

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