Tribal Casinos Remain Divided on California Sports Betting Issue

Plenty of factors must still align for sports betting in California to become a reality. More than anything, though, the state needs buy-in from tribal casinos. Without their support, or at least acceptance, there is no chance California sports betting will get legalized. Not just now, but ever.

That last line may be a smidge hyperbolic. We should never say "never," after all. But the regression on this issue is undeniable. Last year's attempt to legalize sports gambling went from a perceived lock to absolutely imploding. Now, as we round into the middle of 2023, the future of California sports betting is more tenuous than ever. It's difficult to get a read on what happens next.

None of which changes anything about the long game. For sports wagering to arrive, in any form, the state will need cooperation from every single one of the 64 tribes currently operating casinos within the state. We know they don't have that support or alignment right now. The real question: How far away is California from getting uniform buy-in among their federally recognized tribes?

Not All Tribes Have the Same Agenda When It Comes to California Sports Betting

There is a misconception that the California sports betting issue boils down to tribal casinos vs. online operators. In some ways, this is absolutely true. Many of the state's tribes, along with lobbyists on their behalf, have traveled great lengths to prevent top online sportsbooks from entering the marketplace as part of any gambling reform. This divide is at the core of sports gambling debates. It was also the primary force driving two separate pieces of legislation that cracked the 2022 electoral ballot.

Somewhat lost amid this narrative, however, is that tribal casinos aren't just battling online operators. They are competing against one another. There were actually a number of tribes who supported Proposition 27, which would have legalized online sports betting throughout California. These tribes wanted the opportunity to create their own online operations or partner with major and established mobile operators to do so.

Many others fell on the other side of the fence—the vast majority, in fact. Most of California's tribal casinos see online sports betting as an existential threat to their on-site business. They may have some interest in branching out to the online sector if given the opportunity, but they generally don't want corporations to be part of that process, either. Competing against industry heavyweights, in their minds, will only eat into their revenue. The chairman for the Pechanga Band of Indians, Mark Macarro, cut to the heart of this dilemma during a recent interview with PlayUSA:

"The only way this is going to work in California is if all the tribes feel like there is a win for them. I don’t know exactly what that means. It means different things to different tribes based on how they are situated, based on their individual tribe’s circumstances. For some tribes, mobile gaming is the great equalizer. … For most tribes with gaming operations in the state, preserving brick-and-mortar while transitioning and making preparations for the legalization of sports betting in a digital format between the next two to I’ll just say eight years maybe on the time horizon, is probably what makes more sense. But the opportunity for all tribes has to involve all tribes.”

These warring agendas and preferences add an incredibly complicated wrinkle to the outlook of sports betting in California. If they can't come to an understanding as a (rather large) coalition, it rules out the possibility of ever reaching an agreement with out-of-state betting operators.

The Outlook of Sports Gambling in California is All Kinds of Hazy

Without a consensus among California tribes, the expectation among legal gambling supporters remains on the lower end. Some don't even think online sportsbooks will attempt to enter California before 2026 at this rate.

Select tribal leaders have chalked this up to the will of the people. Jacob Mejia, vice president of public and external affairs for the Pechanga Development Corporation, recently said post-election polls show that 65 percent of Californians oppose the legalization of online sports betting. That certainly matters.

Still, post-election polls have also shown that most Californians would be okay with some form of legal sports betting. They may be against online wagering but open to brick-and-mortar operations. But even introducing on-site gambling feels like a long shot. It will still require a constitutional amendment, which will still require the state's tribes to collectively support any measure. It isn't clear whether tribes who want online sports betting will advocate or accept in-person restrictions.

Ultimately, it all comes down to messaging. If the state's tribes are presenting a united front, it gets easier to sell lawmakers and constituents on rewriting longstanding policies. From there, it gets easier to negotiate with online sportsbooks. But the tribes need to reach that point of alignment first. And it's clear they're not currently close. Not only do online operators need to smooth over their relationship with certain tribes, but many of the state tribes have to hash things out with one another.

If and when that happens, the outlook for sports gambling in California will dramatically improve. Whether this alignment can materialize in the near future is a separate matter. You'll know the tide is starting to change when the discussions turns to distributing online sports betting revenue. For now, though, the safe money is on California sports betting remaining in lurch—not just for 2023, but the foreseeable future.

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