Supreme Court Decline Sparks Speculation on California’s Tribal-Led Sports Betting Future

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In a surprising move last week, the United States Supreme Court declined to hear an appeal that was seen as a challenge to Florida’s decision to permit the Seminole Tribe exclusive rights to oversee online sports wagering in the state. The high court’s lack of intervention in the state’s ruling could have profound implications for other regions throughout the country, specifically those like California, where Tribal authority goes unchallenged when it comes to controlling the gaming industry. This event sparked a host of speculation over whether these states could follow suit, establishing internet sports betting systems circumventing the need for voter approval.

Although the Supreme Court verdict was deemed positive news by some Californian Tribal leaders, it wasn’t necessarily interpreted as a roadmap for introducing online sports betting within their territories. This perspective was at odds with Deutsche Bank analyst Carlo Santarelli’s interpretation of the verdict. He opined that the ruling “provides a blueprint for California and other states with tribal gaming.”

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Despite their support for the Supreme Court ruling, Californian gaming Tribes were clear about not making hasty forays into sports betting. James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), in his appearance on the “New Normal” podcast of the Indian Gaming Association (IGA), unequivocally stated that there are no current plans to implement sports betting in California.

Siva revealed, “Though the decision was celebrated and the right one, we are unlikely to see an immediate push for a new initiative in California. In an upcoming CNIGA meeting this week, we are aware that our pace will remain measured and careful, continuing down the same path for the past few years. Despite the verdict opening up new avenues, our timeline remains unaffected.”

The podcast’s host, IGA Chairman Victor Rocha, also hails from the Pechanga Band of Luiseño Indians, the organization that operates the Pechanga Casino Resort in Temecula, California.

Commercial sportsbook operators in California, who had backed an unsuccessful 2022 ballot proposal to introduce online sports betting, might find their business prospects in jeopardy. Under the Indian Gaming Regulatory Act (IGRA), should online sports betting be introduced in California, a lion’s share of the related revenue, around 60%, would need to be directed towards Tribal governments. Companies such as DraftKings and FanDuel may balk at such revenue allocations, but Siva was firm that the Californian Tribes must not be left with mere “crumbs on the table.”

Scott Crowell, an attorney specializing in tribal-gaming matters with the Crowell Law Office Tribal Advocacy Group, echoed Siva’s sentiments on the podcast. He emphasized that the Supreme Court’s decision to overlook the West Flagler appeal sends a clear message against exploitative practices. Crowell warned commercial gaming giants that manipulative models they have employed in Tribal-heavy states like Arizona won’t be accepted in California.

Rocha envisaged a scenario where Tribes would monopolize iGaming, granting commercial entities the chance to collaborate with them on sports betting projects, albeit being subject to a tax rate possibly soaring up to 45%. It would place California second only to New York and a few smaller states that impose the highest sports wagering taxes in the nation.

While the matter of sports betting is significant to Californian Tribal casino leaders, they would ideally prefer to have the public’s verdict. However, it is unclear when that might happen. The single foreseeable certainty, according to Siva, is that it won’t occur this year. He believes that after the contentious ballot initiatives related to sports betting in 2022, Californian voters are unlikely to revisit the issue this year. The prospect of having the matter pushed to 2028 or 2030 is not unsettling for the Tribes, who seem comfortable biding their time.