How much money would the California Tribal Betting Initiative bring to the state?
A california legislative analysis dated Monday revealed that a statewide mobile sports betting proposal put forward by a coalition of tribes may not be as profitable for the state as another proposed initiative.
The proposal of the tribes, called The Law on Online and In-Person Sports Betting Solutions and Age-Verified Tribal Homelessness, calls for 10% of gross gaming revenue to be allocated to the California Homelessness and Mental Health Fund (CHMHF). According to the legislative analysis, it could range from “tens of millions of dollars to hundreds of millions of dollars” if tribes could be forced to make payments.
“It is not clear whether tribes could be required by tribal-state pacts (including the model pact agreement) to make payments (excluding funds used to reimburse the costs of the Status) in the CHMHF “indicates the analysis. “This is because a federal court previously determined that the payments required by certain tribal state covenants into the general state fund for use at the discretion of the state was generally an illegal tax prohibited by the federal law. “
Tribal gaming is federally regulated by India’s Gaming Regulation Act, which over the past year has seen multiple interpretations in various states. In Arizona and Connecticut, reservation sports betting and other gambling is regulated by the IGRA and the state tribes, while off-reserve gambling is regulated by the state.
Compact Florida Ripples
In Florida, the Seminole Tribe and state officials attempted to expand the law by allowing only tribal regulation, both on and off reserve for mobile betting, believing that any bet placed anywhere in the state was considered to be on reserve if it sank. via a server on tribal lands. That pact – which was also approved by the US Department of the Interior – was overturned by a federal court judge in November, and the tribe withdrew its Hard Rock Digital platform 34 days after its launch.
Tribes that already have – or are considering legal sports betting – have paid particular attention to Florida. Those backing the California initiative changed their original proposal in mid-December in hopes of being able to offer reservationless mobile betting statewide, regardless of the courts’ finding in the Florida case.
California tribes are changing mobile sports betting initiative; Seminole’s compact decision looms large in tribal measurement; California Tribes Regulators Consider Updated Proposal @GamblingComp https://t.co/86vOPIIIGf pic.twitter.com/MnL7z4I5uO
– Chris Sieroty (@sierotyfeatures) 20 December 2021
The California Tribal Proposal is one of several sports betting related proposals that could land in the November 2022 poll. A sports betting initiative that would allow retail betting only at tribal casinos and racetracks has already qualified for voting. Two more – one proposed by a coalition of commercial operators led by DraftKings and FanDuel and the other supported by local card rooms – are in the process of collecting signatures. The two would allow mobile betting statewide, but under very different circumstances.
Supporters of the operators’ initiative, entitled California Solutions to Homelessness and Mental Health Act, were the first to link sports betting revenues to homelessness and mental health issues, both of which could affect voters in the state. If the initiative is passed, 85% of tax revenue less regulatory spending – the total potentially rising to half a billion dollars a year, according to the tax note – would be routed to the CHMHF. For the Tribal Mobile Initiative, 10% of “sports betting revenue,” which is defined as gross revenue less player earnings, promotional discounts, and federal gaming taxes, would not be affected in the same way as if âRequired by contract or regulationsâ.
The other proposal, backed by the card rooms, does not allocate money to the CHMHF. All the proposals call for revenue to be paid to the state to cover expenses.
Sports betting would go live on September 1, 2023
The San Manuel Band of Mission Indians, a powerful tribe of gamers in California, are among those who support the latest proposal, which also allows games to expand. Tribes would be allowed to offer roulette and dice games in their stores, and live sports betting could not begin until September 1, 2023.
The proposal describes three ways for tribes to offer wagers, and the route chosen by each tribe ultimately affects the amount, if any, of income that could go to the CHMHF or the tribal fund. The budget note refers to an increase in “state revenues which could range from tens of millions of dollars to hundreds of millions of dollars per year, depending on how the measure is implemented and interpreted legally.”
The proposal would amend the state’s constitution to allow betting – which should at least be a step in the right direction to address the issue of IGRA involvement – but also allow tribes to legalize via a “model pact.” Or by renegotiating an individual tribal state. compact.
In most scenarios, the proposal calls for 15% of gross gaming revenue to go to a tribal fund and 10% to the CHMHF. In all scenarios, the tribes would retain most of the regulatory power, although a gaming commission comprising two representatives from each tribe, the US Department of Justice and the California Gambling Control Commission would be created.