California Tribes will Maintain Sports Betting Monopoly for Foreseeable Future

The legalization of online sports betting in California, America’s most populous state, remains unclear. Currently, residents are unable to access the top sports betting sites.

However, experts at the SBC Summit North America made it clear that the state’s Tribes will have control over the implementation of a legal California sports betting platform, should it become operational.

This comes after tribes identified existential threats posed by gambling providers and other groups to their sovereignty in California through efforts to legalize online sports betting without their involvement.

Nevertheless, as per the expert panel, legal sports betting providers looking to establish a presence in California will need to work on rebuilding trust with the tribes and forming the necessary relationships to be seen as partners by the tribes holding the monopoly.

The expert panel at the SBC Summit North America has reaffirmed that California tribes have complete control and authority.

Bad blood?

In 2022, FanDuel and DraftKings tried to bypass California tribes’ control over the gambling industry by pushing Proposition 27, which sought to expand legal sports betting and was put to a vote on the election ballot against the desires of tribal entities in the state.

It seems that the bitterness from that incident has not completely faded.

The provider plan initially won in 2022, but was subsequently defeated when voters overwhelmingly opposed the proposal for a legal sports betting platform in their state.

Since that time, several top sportsbooks have invested millions of dollars in efforts to expedite the legalization of sports betting, while tribes have also spent millions to resist any threats to their authority in the state’s gambling sector.

According to Andrew Alejandre, the tribal chairman of the Pasketna Band of Nomlaki, FanDuel and DraftKings must rebuild trust and mend wounds before progress can be made. The initial approach by these companies was damaging and will require effort to repair. Building relationships with tribes takes time, and trust cannot be instantly granted.

He continued by emphasizing the significance of sovereignty and vowed to protect it at all costs. He made it clear that any attempts to encroach on their territory would be swiftly dealt with.

Making it right?

DraftKings and FanDuel have issued apologies for their actions in California, admitting that they may have overstepped by bypassing tribal leaders. Both companies have recognized that they may have upset the tribes, who are the true stakeholders in the California gaming industry.

Frank Sizemore, Vice President of Strategic Partnerships at FanDuel, offered a somewhat apologetic statement and recognized that sports betting will be predominantly handled by the tribes in the future.

He stated on Thursday that if the crowd decides to legalize sports wagering, it will be led by the tribal community. He also mentioned that they have no desire to lead another initiative, as they have learned from past experiences that did not end well.

He continued by stating that it is important to demonstrate to the tribes that we can be a reliable ally, and they are inviting us to collaborate with them in this effort.

What is at stake

California is considered the most coveted market in the U.S. legal sports betting industry that has not yet been tapped into. Chris Grove, managing director for Eilers and Krejcik Gaming, described California as the largest prize in the U.S. sports betting market. BetMGM’s management team also emphasized the importance of the Golden State as one of the most significant betting markets globally.

The state is home to more than 40 million residents, has one of the largest tourism industries in the nation, and boasts 15 professional sports teams.

According to PlayCA.com, the legalization of sports betting could generate $300 million in annual tax revenue for the state. A legal sports betting industry in California could see a yearly handle of $30 billion and generate up to $2 billion in operator revenue.

Where does it leave California?

The legal disputes have delayed the potential implementation of a legal sports betting platform in California. Although no official timeline has been established, launching in 2024 seems unlikely and 2025 is not possible due to the lack of an election that year.

2026 is the next opportunity for Californians to vote on the potential legalization of sports betting apps in their state.

There are still obstacles to overcome, such as the California tribes’ hesitance to broaden the state’s legal sports betting system and collaborate with providers who have previously challenged their authority.