In October, the Sports Wagering Regulation and Tribal Gaming Protection Act was tabled, aiming to establish legal sports betting in California. If passed, the proposed measure would amend Article IV, section 19 of the California constitution, granting tribes exclusive rights to both retail and online betting.
The initial proposal outlined several requirements, including a stipulation for tribes to allocate 15% of their adjusted gross gaming revenue from sports betting into a tribal wagering revenue sharing trust fund. Additionally, tribes would be expected to contribute 10% of their adjusted sports wagering gross gaming revenue to a fund addressing homelessness and mental health in California. The measure also indicated that tribes would need to partner with sports betting operators, who would act as vendors, subject to the approval of both the Tribal Gaming Agency and the California gaming agency.
Although the first version garnered some support, concerns arose regarding certain provisions. In response to feedback from tribal leadership, state regulators, and other stakeholders, Eagle1 has amended the ballot.
Changes to the California sports betting ballot include a revised launch date for sports wagering, now set for July 1, 2025, moving it slightly earlier than the originally proposed September 1, 2025. The revenue share for tribes has also increased significantly; tribes that currently receive around $1 million annually could see that amount rise to an estimated 15 to 20 times more under the new measures.
Furthermore, the contribution to the tribal wagering revenue sharing trust fund from sports betting's gross gaming revenue has increased from 15% to 25%. The requirement for in-person online gambling registration for individuals located outside a 10-mile radius from a casino will be removed after two years.
Additional amendments make it easier for tribes to act as their own affiliates, and it was decided that promotional credits will be taxed after five years. Notably, tribes will not need to provide any financial support for the ballot's passage, as Eagle1 will handle all associated costs, estimated around $25 million for the signature campaign and potentially several hundred million dollars for the public vote campaign.
Eagle1 asserts that California has the potential to establish the largest legalized sports betting market in the country, predicting annual wagers could reach $60 billion with revenue potentially hitting $3 billion.
Eagle1 partner Kasey Thompson expressed optimism that these changes will attract further support from tribes, emphasizing that collaboration is crucial for the ballot's success. "We took a proposal that had the support of more than 70 tribes and was one of the most tribal-focused propositions ever, made amendments based on tribal and regulator feedback and updated it for today's legal landscape," said Thompson. "Tribal support is paramount to the success of this effort and we will not put it on the ballot without approval from a majority of the tribes."
Reeve Collins, co-founder and CEO of Pala Interactive, also endorsed the amendments, stating that they have tailored the proposal to better suit tribal interests. "This encompasses tribes, land-based casinos, regulators, out-of-state operators, and the people of California. This is a forward-thinking and tribal-centric proposition that finally paves the way for sports betting in California."
Looking ahead, when the initial ballot was published, it was indicated that Pala Interactive would have 180 days to collect the necessary signatures. This deadline is now extended to April 23, 2024. Supporters must gather 874,641 signatures for the ballot to go before voters, with election officials needing to verify a minimum of 500. The 2024 election is scheduled for November 5.
Since submitting a ballot to the attorney general necessitates a 65-day interval before collecting signatures, it is anticipated that signature collection will commence on January 1.
In November, California voters rejected proposals for legalized sports betting, raising doubts about the success of another attempt so soon after. The rejection followed a February 2022 poll indicating some support for legal sports betting, yet Democrats in California recommended opposing all betting proposals. Ultimately, both the Tribal Sports Wagering Act Initiative and another sports betting proposition were placed on the November 2023 ballot but were rejected by voters.
