FanDuel Iffy On Future of California Sports Betting

The future of California sports betting remains shrouded in mystery. Nobody is quite sure when or if it will be legalized. The uncertainty really starts to resonate when taking stock of industry stakeholders perspectives.

Taking FanDuel CEO, Amy Howe, as one example. She has publicly portrayed both optimism and ambiguity over the future of sports betting in California.

“California, as many of you know, we were unsuccessful in the November [20]22 initiative,” Howe explained at an investor event (via PlayCA). “We have completely regrouped coming out of that. We feel optimistic that at some point it will happen, but we are doing that with and through the tribes. It is obviously a very different approach than we took in ’22. So we feel that at some point it will happen, but we’re not gonna try to put a date on it, whether it’s ’26 or ’28.”

Both 2026 and 2028 have been thrown around as prospective timelines for California sports betting legalization. But the House of Representatives and Senate approve a bill first. And even if they do, there is no guarantee voters pass any measure on the ballot when the time comes.

Still, the collaboration with tribes in California from FanDuel, and presumably others, is a good start. There will be no legalization of sports betting without them. The Golden State features over 100 tribes. Brokering individual gaming compacts is out the window. More importantly, online sportsbooks in the United States will be hard-pressed to out-influence them if they try proposing their own bill. That is, after all, effectively what happened in 2022.

Will the latest efforts from FanDuel and others be more productive? And is there any sort of timeline for when those efforts might begin?

FanDuel is Attempting to Remedy Their Missteps from 2022 California Sports Betting Attempt

Howe mentioned that FanDuel is doing things differently compared to 2022. While she did not get into ultra-specifics, this recalibration seems focused on communication. As Cheryl Coward writes for PlayCA;

“[FanDuel’s] previous efforts were a lobbying and engagement flop. The company, along with DraftKings and other out-of-state operators, made the error of trying to enter California without the support of the state’s powerful casino-owning Native American tribes who have pioneered legal gambling in the state over the past 25 years. FanDuel quickly saw the error in its ways. With contrition, FanDuel CEO Amy Howe publicly admitted that its efforts in 2022 to pass a measure to legalize online sports betting were ‘a spectacular fail.’ Now, FanDuel is trying to build bridges with the tribes.”

The construction of these bridges has included strategic hires. Earlier this year, FanDuel tapped former National Indian Gaming Commission Chairman E. Sequoyah Simermeyer as vice president for strategic partnerships. Before that, they named former Chief Operating Officer for the California-based San Manuel Band of Mission Indians, Rikki Tanenbaum, as a senior vice president for strategic partnerships.

Whether these strides amount to anything remains to be seen. But the relationship between online sportsbooks in the United States and California tribes does appear to be improving.

Previously, tribal leaders were more inclined to reject the inclusion of California online sports betting in any proposal. That much was clear in their own 2022 initiative (which also failed). Now, however, multiple public statements suggest that they are open to California sports betting eventually including online operators like FanDuel and DraftKings.

“Eventually” is the operative word. Recent speculation has the next California sports betting bill allowing tribal-only gaming for the first couple of years. After that, online sportsbooks in the USA would be able to enter the market.

Will Online Sportsbooks like FanDuel and DraftKings be Willing to Wait for Entry into California?

A potential proposal that legalizes California sports betting in 2026 for tribes and then permits online operators to join the game in 2028 or 2029 seems like a reasonable compromise. Then again, companies like FanDuel clearly don’t want to wait that long. California has the potential to be the most lucrative sports betting market in the country. They have the USA’s highest population, with around 39 million residents, and a buffet of sports teams to act as major draws. The sooner online sportsbooks gain access to California, the sooner they will turn lucrative profits.

Of course, this is the exact reason online operators may be willing to wait. Playing the long game is better, for them, than playing no game at all. Plus, they tried to go against the tribes in 2022. While both sides failed to get an initiative approved, prospective California online sportsbooks came off looking worse for wear. Many policymakers, remember, voiced their support for the tribal gaming bill over its counterpart.

Pursuing immediate legalization might leave FanDuel, DraftKings and others on the outside looking in. By supporting a bill that delays their entry by two or three years, they stand a better chance of winning over tribal approval.

Granted, this all remains speculation. Though many anticipate a California sports betting push in 2025, we do not yet have specific details on a proposal. We should know more about that in early 2025, when the California legislature convenes. For now, though, there is a duality to the outlook on California sports betting. Its trajectory seems positive. At the same time, it is also a massive unknown.

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