California Tribes Remain at Odds Over Legal Sports Betting Proposals

As the fight for the soul of legal sports betting in California continues to rage on like an inferno, the issue has created a clear and extensive divide among California tribes. Not only that, but as we head for the November 2022 elections, when the future of California sports betting will be decided, the rift and contention appears to be growing.

At present, most of the tribes in California find themselves supporting one of two sports betting measures. And the lengths they're prepared to go when combating one another are expanding by the day. Most recently, according to Bloomberg.com, a total of $364 million has been spent by both sides in an attempt to thwart the other.

Why has this disagreement turned so lucratively hostile? What is each side supporting exactly? And above all, what are all of the potential outcomes as we gear up for an intense November ballot?

How the California Tribes Got Here

The two proposals that have created this huge divide among California tribes are Prop 26 and Prop 27. Both are set to appear on the November ballot—and are the only two options voters will choose from, as of now.

Proposition 26 only permits sports betting on-site at tribal casinos and horse-racing tracks. Proposition 27, meanwhile, allows online operators to offer their services anywhere while also stipulating they partner with tribes. The latter has been the most common route states have gone when they legalize sports betting; it is very rare that places have chosen to only allow in-person wagering.

Most assume that the vast majority of tribes support Proposition 26, since it demands business take place on the premises of tribal-owned casinos, which currently have a monopoly on the state's gaming market. However, there are a bunch of smaller tribes who have teamed up with larger commercial sportsbooks like FanDuel and FanDuel, who have helped bankroll Proposition 27. 

The concern for smaller tribes is that they won't have the resources to compete with the bigger casinos for foot traffic if Proposition 26 gets passed. A certain number of the smaller tribes are also left out of the Proposition 26 bill altogether. 

And finally, there are just certain tribal-operated casinos worried about the shift to digital gaming. The vast majority of the hundreds of billions of dollars in bets placed throughout the United States every year come from online transactions. Bigger sportsbooks already dominating the industry are more in tune with how to advertise and reel-in business than the physical casinos, which continue to struggle with maintaining and drawing in new customers since the coronavirus pandemic.

Which Sports Betting Bill Currently Has the Edge in California?

Informal polls have so far been inclusive when it comes to pinning down a favorite between Proposition 26 and Proposition 27. Most California residents have said they approve of legal sports betting in some form, but the exact manner in which they want it is considered a coin toss.

To that end, even certain experts are having trouble trying to understand why so many California tribes oppose legal online sports betting. In reality, though, it all comes down to control. Tribes have a gaming compact with the state that needs to be amended as part of sports betting legalization. They have thus far been unwilling to endorse any changes, because they don't want to deal with the competition.

Lobbyists for Proposition 26 have also argued that Proposition 27 inherently drives money outside of the state. Places like DraftKings and FanDuel won't create many jobs within California or funnel any of that money back into the economy. Tribal casinos are physical locations with hundreds of employees, and they have also proposed a rolling tax rate that can be divvied up among a ton of different programs.

The early read suggests Proposition 26 might have the edge, in large part thanks to the aforementioned argument. It also helps that other commercial sportsbooks, such as Caesars Entertainment, have been reluctant to take any sides at all for fear of missing out on future partnerships with California's tribal casinos.

Could More California Tribes Approve Proposition 27?

In an effort to sway supporters of Proposition 26 to the side of Proposition 27, the backers of the latter are now proposing massive licensing fees and parameters for out-of-state sportsbooks. If you're a commercial operator, you must be licensed in at least 10 other states and foot the $100 million buy-in as part of the process.

This licensing fee would be the most aggressive in legal sports betting history. And it isn't just meant to convince more California tribes to join the side of Proposition 27. It's also meant to coax government officials in power to promote the bill, knowing that this additional money means a boatload of extra tax revenue for the state.

Still, even after all this, we can't be sure what happens in November. The prevailing sentiment is that at least one of these two propositions will receive a 50 percent or greater approval rate. But if both eclipse that mark, the state could be looking at litigation that lasts months, if not years. And the recent uptick in spending from both sides, as reported by Bloomberg, suggests they'll dig in their heels if there's not a clean resolution.

Fortunately, California residents are not without options. As many of our reviews for the top online sportsbooks explain, there are scores of reputable sites that allow Californians to set up accounts and immediately begin placing bets.

And as far as we're concerned, that's the most sensible route to go. After all, as it stands, the state could still technically find itself in a standoff driven by two different subsets of California tribes for longer than anyone thought.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: