- By Chez Oxendine
In an unusual moment of alignment, a coalition of private sports betting companies stands in agreement with California tribes about sports betting in the Golden State.
A group of private sports betting operators called the Sports Betting Alliance (SBA) — including industry leaders FanDuel, DraftKings, BetMGM, and Fanatics — have spoken out against a pair of proposed sports betting initiatives in California.
The ballot initiatives would amend the California constitution and grant tribes exclusive rights to offer retail and online betting. To date, though, there has been little tribal support for the proposals, with the statewide tribal gaming association calling on the sponsors of the ballot initiatives to “do the honorable thing” and withdraw them.
The proposals are destined to fail, according to SBA spokesperson Nathan Click.
“We recently learned that the authors of two sports wagering initiatives in California are trying to find financial support for signature gathering from sports betting operators,” Click said in a statement. “In the interest of clarity, and consistent with our previously stated opposition to these measures, we can commit that SBA won’t be funding or otherwise supporting either of these sports wagering initiatives.”
The initiatives were filed last October by a company affiliated with tech entrepreneurs Kasey Thompson and Reeve Collin, the co-founders of an online gaming platform they started with the Pala Tribe Band of Mission Indians Andre CC’d m sold to Boyd Gaming for $170 million in 2022. In December, the pair’s Eagle1 Acquisition Company announced several amendments to the proposed ballot initiatives in an attempt to gain more tribal support.
Collins and Thompson’s initiatives advocate for taking over existing illegal operations and handing them over to tribal operators as a way to both combat unregulated gambling in California and kickstart sports betting in the state, where it has faced a brutal uphill battle.
Thompson told trade publication PlayUSA that the initiatives propose three ways to offer sports betting operations to tribes:providing tribes what they need to launch their own digital operations, partnering with regulated sportsbooks, and finally a tribal sports development fund, which offers to bring in “the bulk” of California’s small tribes in sharing new ownership of previously unregulated, illegal operations.
“Those assets today are collectively worth $3 billion in California alone,” Thompson told PlayUSA. “After legalization and regulation, their value will increase to $5 billion. If 80 tribes participate in the fund with 100% ownership of these assets, that’s about $50 million in equity value for each tribe.”
Thompson responded to the statement issued by the SBA, calling Eagle 1’s proposition “the most tribal initiative ever.”
Tribes, though, don’t seem to be having any of it. The California Nations Indian Gaming Association (CNIGA), representing 52 tribes, sent a letter in December to Collins and Thompson that called the proposals “offensive.”
In a news release, CNIGA said its members voted unanimously to oppose the sports wagering initiatives, including the amendments filed in December with the California Attorney General’s office.
“The disingenuous nature of these initiatives should be a red flag to every tribal government as well as every voter in California,” CNIGA Chairman James Siva said in a statement. “The proponents of the measures are attempting to divide and conquer tribes by pushing an initiative that attempts to legitimize illicit off-shore operators and putting our governments at risk.”
Siva called on the proponents of the ballot initiatives “to do the honorable thing and withdraw these flawed initiatives.”
The shared dissent regarding the Eagle 1 initiatives represent a distinct change in tone between the CNIGA and the Sports Betting Alliance, which battled for control of a potential sports betting market in the 2022 elections through opposing propositions.
CNIGA and other tribes were part of a massive spend to oppose Proposition 27, which would have brought private sports and mobile betting to California - to the point where said tribes abandoned their own sports betting proposition and simply focused on bringing down Prop 27.
Sports and mobile betting remain illegal in California, while markets in states across the country have exploded amid the advent of the industry where it’s been legalized.