California sports betting drive begins anew with double-ballot initiative filing

Hopes for legal sports betting in California have been rekindled with the filing of two new tribal-gaming-centric ballot initiatives in the Golden State.

The pair of legislative petitions were filed late on Friday (October 27) with the California Attorney General’s office and comprise ‘The Tribal Gaming Protection Act’ and ‘The Sports Wagering Regulation and Tribal Gaming Protection Act’. While similar in title, the second initiative deals with the regulation of the market legalized through the first.

Both proposals would give tribal operators exclusivity over both online and in-person sports betting in California, with a proviso that this will commence no earlier than September 1, 2025.

Under the new initiatives, sports betting would operate in the state under the ‘hub and spoke’ model, in which all sports betting transactions made online would be funneled through servers located on tribal lands, thus avoiding the contravention of the Indian Gaming Regulatory Act (IGRA).

This validity of this model and whether it breaches IGRA has provoked controversy since it was initially proposed in Florida in 2021 as part of the Seminole Tribe’s 30-year gaming compact with the state.

Separate court cases in the Florida Supreme Court and the wider US Supreme Court are currently considering petitions over the compact and its constitutional validity, which are ongoing.

Under the legislative initiatives proposed in California, all sportsbook operations would be required to be branded with a tribe’s federally recognized name, and any co-branding with another operator is expressly prohibited.

However, the initiatives allow for commercial sportsbook services to be provided if the entity offering those services is registered as a sports wagering vendor, with tiered levels of registration based on the services provided.

A major sports wagering vendor is classified as providing services including bookmaking and risk management, while mid-level sports wagering vendors include those providing B2B, security, and integrity-based services to tribal operators.

Lastly, ancillary sports wagering vendors include any entity that provides necessary support services to sports wagering, with the proviso they be licensed and certified to do so.

If a tribe seeking to offer sports betting enters into an agreement with a vendor, the vendor’s share of net revenue from the agreement cannot exceed 40%, with the contract limited to a seven-year timeframe.

Under the new model to open an online sports betting account, an individual must register in person with a sportsbook before they can access their online account, with the legal sports betting age set at 21.

Betting on professional and college events would be allowed, however, betting on high school or lower level athletic events would be prohibited.

Tribal operators would be required to pay 15% of their adjusted sports wagering gross gaming revenue (GGR) into a Tribal Sports Wagering Revenue Trust Fund, to be established jointly with the state.

In addition, tribal operators would be required to contribute 10% of adjusted sports wagering GGR to a new California Homeless and Mental Health Fund.

The pair of initiatives were filed by Ryan Tyler Walz, an individual with no clear links to the industry, and lists former Pala Interactive co-founder and chief executive Reeve Collins as a point of contact. However, it is understood the petitions have no links with Pala Interactive, which became a Boyd Gaming division in 2021.

Despite concerning tribal gaming, the legislative petitions are understood to not be directly authored by the tribes themselves, with the filing provoking a bitter response from tribal operators, in the form of a statement from the California Nations Indian Gaming Association (CNIGA).

“The California Nations Indian Gaming Association is deeply disappointed that the sponsors of the two recently filed initiatives did not first reach out to the State’s largest tribal gaming association for consultation and input,” CNIGA said.

“Instead, CNIGA and our member tribes were alerted to their existence when they were filed with the Attorney General today [October 27].

“Decisions driving the future of tribal governments should be made by tribal governments. While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate,” the statement concluded.

These latest measures come almost a year after similar ballot initiatives in California, one backed by a coalition of tribal operators and the other backed by major online sportsbook operators, spectacularly failed to garner enough signatures from Californians, despite multi-million-dollars being spent on both sides.

The new petitions are currently listed on the California Attorney General’s ‘active measures’ webpage, with comments accepted on both until November 27.