California Tribes Take Aim At Multiple Competing Platforms

We’ve written recently about the Native American tribes in California gearing up for a lawsuit against cardrooms. That’s still on (more details later on).

However, there’s related news that just dropped. The Native Americans wants other types of betting in California removed from the state too. In other words, they’re launching an all-out blitz to preserve their exclusive right to legal betting inside the state. You got to read what’s going on in the Golden State — things could get messy in a hurry!

Tribes Want DFS And Sweepstakes Betting Gone

The headline is accurate, the latest betting formats to enter the crosshairs of the California tribes are daily fantasy sports (DFS) and sweepstakes. The tribes believe this infringes on their exclusive gambling rights in California, which they earned with a landmark 2000 vote.

“They’re unregulated. They’re untaxed,” said Victor Rocha, the Indian Gaming Association (IGA) conference chairman. “This is gambling on training wheels. It’s a bunch of lawyers who are spitting in our face and looking at gray areas thinking that we’re not going to act.”

Rocha mentioned he saw the threat of sweepstakes while attending the Global Gaming Expo in Las Vegas earlier this month. At the conference, sweepstakes gaming was discussed heavily.

Tribes Are Ready To “Fight On”

Fight on, that’s a popular saying popularized by the USC Trojans — one of the premier teams in the state that draws football betting in droves. It’s the fan base’s rallying cry, and the tribes too cause they’re bringing the fight.

“It’s baffling how far [sweepstakes and DFS operators] have gotten already without any big pushback from the state,” said James Siva, CNIGA chairman. “If they want, I hate to use the word, another fight, we’re always ready.”

DFS has indeed carved out a big niche for itself, not only in-state but across the country. If you remember, DraftKings and FanDuel began as pure DFS platforms before expanding to sports wagering when betting was legalized in 2018. Today, pure DFS plays like PrizePicks are leaders in the industry.

Of course, this comes down to money — as it always does with these types of things. The tribes likely feel the California consumer only has so much disposable money to bet with. Thus, some of those bettors are resorting to options like DFS or sweepstakes, which are more accessible than in-person native casinos.

Though, they’ll spin it a different reason. It’s not about them missing out on revenue windfall, it’s about the state and its taxes. It’s a tale as old as time in this game of political theater. Here’s the fit exact words:

“These guys don’t pay money into the system,” Rocha said. “When we’re talking about cannibalization, this is what we’re talking about. It’s companies like this that take money out of California.”

What The Tribes Could Do

So what’s the next steps for the tribes then? Sue em? Send a cease and desist letter? Those are plausible, but it’s believed they’ll go through the app stores — Apple and Google Play — first. Silva outright said they’ll be contacting the app stores about what they perceive as illegal gaming these platforms are doing.

Many DFS mobile betting apps work perfectly fine across the country — even in states where sports betting isn’t legal, which California falls under. In fact, these non-legal states is where their biggest markets are.

Sweepstakes is legal in 40 states too, slightly more than the 38 states with legal sports betting. But we’ve seen states where it’s not legal — Connecticut, Delaware, and Michigan, as an example — send cease-and-desist letters to sweepstakes companies.

“Any new entry of gaming into California begins and ends with tribes,” Siva said. “That’s the reality of how gaming operates in California. You may not like it, but you will respect it in the end.”

Lawsuit In The Works Against Card Rooms

The tribes are going “easy” on DFS and sweepstakes compared to card rooms. This issue is on the door step of the courts.

A few weeks ago, California governor signed Senate Bill 549, also known as The Tribal Nations Access to Justice Act. At long last, the bill allows tribes to request judges to review whether California’s cardrooms — which there are about 80 are — are illegally offering card games such as blackjack, poker and baccarat.

This issue also goes back to the tribe’s exclusivity agreement with the state. However, card rooms used a loophole to skirt around the law. Technically speaking, the card rooms are operating because they are not “house” banked. Instead, they have “players” operate as the dealers.

It’s a dicey situation, and one the California courts will soon be deciding. The last we heard, California’s 67 gaming tribes were formulating a plan to bring a lawsuit forward — the signed bill says they can only do so once. Therefore, it has to be well executed and agreee upon by all the casino stakeholders.

One thing is for sure: the California tribes will be busy through 2025 fighting these three battles. Question is, are they spreading themselves too thin by fighting all three? Or are they creating the perfect storm to keep their exclusivity in tact? Well soon find out!