City Officials Say Tribal Sports Betting Initiative Threatens Local Services And Programs

Written By Matthew Kredell on May 24, 2022 - Last Updated on September 22, 2022

Brenda Villa got her start in water polo at Commerce Aquatics as a youth. After she team captained the US women’s water polo team to its first gold medal at the 2012 Summer Olympics, the Commerce facility became the Brenda Villa Aquatics Center.

“The opportunities and the access that I had at that aquatics center opened many doors for me,” Villa said. “Now, as an adult looking back, I know it was partners like the Commerce Casino that supplemented and helped support that program.”

The gold medalist is concerned a California sports betting measure on November’s ballot could threaten the possibility that others could follow her lead.

Villa: Prop 26 could close card rooms

Villa joined several local elected officials speaking outside the Commerce Senior Citizens Center on May 19. They sought to provide faces and personal stories about the impact of California cardrooms on their communities.

They contend the tribal sports betting initiative would threaten the future of community programs throughout the Los Angeles region. This includes local government’s ability to fund public health, homelessness services, senior and after-school programs, and other vital public services.

“Pure and simple, the qualified tribal gaming initiative is a direct attack on Los Angeles communities,” said Compton Mayor Emma Sharif. “It has a specific provision that would allow for limitless lawsuits against cardrooms. This provision will severely harm our communities unfairly as we rely on their good-paying jobs and economic benefits, including revenues generated to fund programs and services serving homeless, housing and senior citizens.”

According to a campaign spokesperson, it’s the first in a series of regional press conferences offered by Taxpayers Against Special Interest Monopolies. The ‘No’ campaign sponsored by California cardrooms will hold more around the state against the tribal sports betting initiative.

The impact of California cardrooms on communities

Officials contend the LA region could lose $71 million in tax revenue if the tribal gaming measure becomes law. This is assuming the measure results in closures of all California cardrooms.

Across the state, the campaign claims that passage puts at risk more than 32,000 jobs, $1.6 billion in wages and $5.5 billion in economic impact.

Villa said her parents love coming to the Sunday breakfast paid for by Commerce Casino at the press conference location. But that and many more city services could come to an end if the initiative passes.

“The pandemic closure gave us such a devastating hint of how hard our community would be hit if the tribal gaming measure on the ballot were to pass,” said Commerce Mayor Oralia Rebollo. “When Commerce Casino was forced to close, programs such as the senior breakfast provided by the casino had to close. Further, it was difficult to make ends meet as the gaming tax revenue equals nearly half of our city’s entire budget revenue.”

The benefits of cardroom revenue

Rebollo credited a college scholarship she received through funding from Commerce Casino for her success. And she wasn’t the only one.

Bell Gardens Council Member Alejandra Cortez said two scholarships from the Bicycle Hotel and Casino funded her way to UCLA. Cortez added that 46% of general fund revenue for the city comes from the Bicycle Hotel and Casino.

In Hawaiian Gardens, council member Jesse Alvarado said that total reaches more than 68%.

“When our cardroom was shut down, so was our city,” Cortez said. “We had to rely on pay reductions for our employees, on cancelling vital services for our community, on closing every extra-curricular program in our city. And that highlighted what will happen to our cities if this tribal initiative goes through.”

Reason for opposition to tribal sports betting initiative

The reason the city officials oppose the tribal initiative has nothing to do with California sports betting.

The initiative allows in-person sports wagering at tribal casinos and horse racetracks, leaving out cardrooms. But that’s not their concern. They’re fine with the tribes having exclusivity over sports betting.

Their opposition centers around additional language to the initiative involving the Private Attorneys General Act (PAGA). For years, tribes filed lawsuits against the state to force the attorney general to stop cardrooms from offering blackjack. Tribes have exclusivity over house-banked games, but card rooms use third-party bankers to represent the house.

California regulates the games, but tribes want them shut down. The change in the state constitution allows tribal casinos to directly sue their commercial competitors.

Operators say lawsuits could be devastating

Cardroom representatives argue this process could be the end of them.

“There are definitely better ways that the state can achieve sports betting than directly harming our residents and our cities that rely on the jobs, the public safety and the quality of life,” Cortez said.

Two city officials alleged that the changes even open up the possibility for tribes to sue cardroom customers.

“Tribal casinos have a history of unsuccessfully challenging the legality of local cardrooms,” Alvarado said. “Now they’ve taken it a step too far by exploiting the Private Attorneys General Act in expanding it to new territory by allowing tribal casinos to sue their competitors and their customers, forcing cardrooms out of business with unlimited frivolous lawsuits.”

Tribal sports betting campaign responds

The qualified tribal initiative is one of two sports betting measures expected to be on the November ballot. The other is an online sports betting initiative backed by sportsbook operators that is currently having signatures verified.

Another coalition of tribes offered an initiative including in-person and online sports betting run by the tribes. That campaign also is collecting signatures, but opted to submit for 2024.

Kathy Fairbanks, spokeswoman for the Coalition for Safe, Responsible Gaming that backs the qualified tribal initiative, responded to the assertions made by the city officials:

“Our measure simply ensures existing laws preventing illegal gambling are being followed. Cardrooms following the law have nothing to worry about. Nor do their employees. Our measure will not shut down a single cardroom casino that’s operating legitimately. The only cardroom casinos at risk of legal enforcement are those that repeatedly violate California gaming laws. Unfortunately, this myth is being pushed by a handful of cardroom casinos who have a well-documented track record of flouting the law.”

Photo by AP Photo / Julie Jacobson
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