Tribal Leaders Prepared to Play Hardball in 2023 California Sports Betting Negotiations

It feels like forever ago that legal sports betting in California were considered a formality. In reality, only a couple of months have passed since that. As recently as October, California sports betting has been deemed a lock. Voters would approve it in November, and it would be rolled out by the end of 2023, if not the start of 2024.

Fast forward to now, and everything has changed. If you're a sports betting fanatic, this change has worsened. And it doesn't seem to be getting any better.

California's sports betting bills that made the 2022 ballot were thoroughly rejected by voters this past November. There were many reasons why–and we've covered them all. But the defining flaw that spelled the downfall of California sports betting was the complete absence of a working relationship between tribal operators and retail sportsbooks.

Tribes wanted exclusive rights to the state's gambling business. Retail sportsbooks, naturally, wanted to enter what many believe might be a $30 billion per year sports betting market. Their inability to negotiate a middle ground ultimately left California on the outside looking in of the United States legal sports betting clique.

Glass-half-full thinkers argued this wasn't a big deal. "Surely tribal operators and retail sportsbooks would put their heads together in 2023 and remedy this dichotomy rather than risk another failed bid in 2024?" they said. Never mind that the tribes still insist they don't want retail sportsbooks independently operating throughout the state. Money talks, and both tribal operators and retail sportsbooks stand to make a fortune if they find common ground.

Yet, California tribes don't appear to care. In fact, as of early 2023, they're prepared to play hardball in sports betting negotiations for the next year—and beyond.

Tribes Don't Sound Ready to Compromise on California Sports Betting

Retail sportsbooks have tried various ways to forge a working relationship with tribal casinos. Their most recent California sports betting bill, Prop 27, called for all online odds providers to partner with brick-and-mortar establishments operated by tribes.

This overture was inevitably rejected. And once they realized the tribes weren't going to budge, retail sportsbooks tried appealing to voters with a clever, if misleading, name for their proposal. They essentially turned Prop 27 into the "California Homelessness Act." Their selling point: Much of the tax revenue generated from legal California online sports betting would be earmarked specifically to fight homelessness. But as the state’s tribes pointed out in their counter-advertising against Prop 27, this wasn’t entirely accurate. Retail sportsbooks weren’t committing to running or creating programs that actively fought homelessness. They were only throwing money at the problem, and funding, as the tribes also noted, has never been the primary setback when combating homelessness. 

This opened up a whole new can of worms. Tribes seemed even less likely to work in tandem with retail sportsbooks after using underhanded messaging to sway voters. Instead, the state’s tribes devoted hundreds of millions of dollars to fighting Prop 27, a maneuver that was ultimately successful.

Their tune hasn’t changed, either. Tribes have made it clear they have no interest in working with retail sportsbooks as equal partners. They have even gone insinuated that they no longer care about legal sports betting. As Frank Sizemore, the chief operating officer of the San Manuel Tribe of Mission Indians, recently told Gaming Today: “Sports wagering is No. 752 on people’s agenda. No one cares. It’s just not that big of a deal to most people.”

Will California Tribes Really Derail Sports Betting Efforts in 2023?

Don’t get any of this twisted. California tribes are still in favor of sports betting. They want to have most of the control over how it is offered.

As they have explained, this doesn’t even mean prohibiting retail sportsbooks from entering the market altogether. California tribes are prepared to allow some of the most highly reviewed online sportsbooks to act as their IT support; they want retail sportsbooks to help them run online operations, but only under their tribal umbrellas.

All the bigwig sportsbooks have so far rejected this idea. They insist on a certain level of an independent agency. But they won’t get it unless more members of the House and Senate are prepared to support them and propagate their messaging to California constituents. And we're well past thinking the tribes are bluffing. They still get to run their casinos. They don't need legal sports betting if they're not forced to compete with out-of-state operators.

The current state of affairs for California sports betting is a big deal—in a bad way. This year’s legislative sessions are already underway, and we’ve yet to even hear about the introduction of a new sports betting proposal. There is still time for one to circulate, but the relative silence suggests that California tribes and online retail sportsbooks remain at a fundamental impasse.

And unless this changes—and fast—the state can kiss its chance to legalize sports betting before 2026 goodbye. 

Take a look at this list of the top online sportsbooks so you can decide which one to use for all of your sports betting needs in 2023: