Last week a major proposal for online gambling in California received enough signatures (1.6 million, according to Ballotpedia) to guarantee its place on the state’s ballot in November. 

It means that Californians will vote on at least two competing proposals for legalised sports betting in the state later this year. Another proposal calling for in-person wagering at tribal properties and racetracks was submitted by 18 Native American tribes in 2019. 

A separate tribal proposal that includes online gambling and one from three Californian cities that host cardrooms are yet to receive the requisite number of signatures to proceed to the ballot, but there remains every chance that they and other proposals could be up for referendum by November, or in 2024. 

The state is a game-changer in terms of the U.S. igaming landscape. According to research firm Eilers & Krejcik Gaming LLC, California represents a potential $3.57bn per year in net revenue for operators in the state, more than Texas, New York or Florida.  

No wonder then that the latest proposal to be cleared for the ballot proposes an eye-watering initial licensing fee of $100m, plus a $10m renewal fee every five years. With so much at stake, the industry’s behemoths are willing to fork out massive sums of money to access this huge new market. 

The initiative, titled California Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative, is backed by BetMGM, FanDuel, DraftKings, Bally’s and Penn National, among others. It is supported by Fresno Mayor Jerry Dyer, Long Beach Mayor Robert Garcia, Oakland Mayor Libby Schaaf and Sacramento Mayor Darrell Steinberg. 

With such massive backers, the tribal community are not the only dissenting voices against the proposal. Business analysts and academics have argued that it will eliminate competition from smaller businesses, although that is arguably the case in other competitive U.S. markets already. 

Speaking to the Cal Matters website at the end of April, Oklahoma State University professor and sports gambling policy expert John Holden dubbed the proposal “absolute nonsense,” adding “what’s effectively happening is, basically, the 5 to 10 frontrunners in the market have decided ‘Alright, let’s ensure that there’s no one else who can compete by agreeing to pay these exorbitant license fees’.” 

However, the California tribes present the greatest opposition. According to Sports Handle, tribal leaders would prefer to see legalised gaming fail completely at the November ballot rather than see a proposal from the commercial giants succeed. 

The tribes differ on their approach to online gambling, with only one of two tribal proposals including mobile wagering, but they are united in their opposition of the market falling under the control of the major national gambling operators. 

Speaking at the Indian Gaming Trade Show & Conference in April, Sycuan Band of the Kumeyaay Nation chairman Cody Martinez summarised why such proposals so deeply threaten tribal sovereignty in the state. 

“The more we continue to look and act like corporate entities instead of tribal governments, it’s a detriment to us and our gaming that we built with so much hard work. We can draw a fine line between a FanDuel and the Sycuan Band of the Kumeyaay Nation. That’s our name on that building. That’s our reputation. … We’re not a corporate entity and the tribes should be very careful. The more you can’t differentiate between a tribal government and corporate entity, that’s a scary road to go down”, he said. 

While the operators’ initiative enables tribes to offer online sports betting under their name and branding, via a one-time $10m licensing fee and $1m renewal fee every five years, it is clearly set up with commercial entities in control. Just to apply for a license as a non-tribal operator, applicants need to be licensed to operate in 10 states. 

The Sycuan Band is just one tribe of course; those behind the California Tribal Government Mobile and Retail Sports Betting Initiative, such as the Rincon Band of Luiseño Indians and the San Manuel Band of Mission Indians, will have alternative priorities.  

While the commercial drive to acquire market share is strong, the cultural drive to retain sovereignty is likely to be far stronger. It wouldn’t be the first time the tribes had opted to flat out oppose gambling legislation, rather than enable it to pass under conditions that are not entirely favourable.  

However, with two proposals now on the ballot and time for others to receive enough backing to be put to voters too, it maybe be that more than one measure comes into effect, with tribal operators able to offer retail betting and both tribal and commercial licensed operators able to offer wagering online. 

Whatever the outcome in California, as consultant and former California gambling commissioner Richard Schuetz told SBC’s Summit North America in December: “Anything up to that point in time is going to be dwarfed by California, if it goes legal.”