A tribal initiative that would bring retail sportsbooks to California’s tribal casinos and racetracks has already qualified for the November ballot. A second initiative backed by commercial sports betting operators that would bring mobile betting to the Golden State is a safe bet to make the ballot.
Wagers.com sat down with Brandt Iden, Head of Government Affairs for Sportradar, to talk about California. A former state representative in Michigan, Iden spearheaded the state’s foray into sports betting and online gambling, including finding a compromise between commercial and tribal gambling operators.
Previous coverage of California sports betting at Wagers.com:
Competing sports betting initiatives spell trouble for California
California tribes shelve mobile sports betting initiative
Cardrooms enter California sports betting ballot battle
Initiatives Face an Uphill Battle
Steve Ruddock: California has a couple of sports betting initiatives, and it looks like both will end up making it on the November ballot. What are your thoughts on these proposals, and what is the industry impact should one or both initiatives pass?
Brandt Iden: Obviously, from a stakeholder industry perspective, all eyes are on California. It’s the big prize, it has the largest population, and everybody knows they have to be a part of it. And when I say everybody, I mean from a commercial standpoint. That’s why they’re willing to spend the money they have and will spend plenty more.
And then you’ve got the tribes saying, this is our market. This has been our market. We’ve got sovereignty here, and we want to control how it gets done. It’s a high-stakes poker game about how California will play out.
At this point, we’ve got a situation where you’re going to have a commercial proposal on the ballot, and then you’re going to have the retail proposal. Now, they could both pass and work in tandem, and they could both not pass.
And I say that because typically, what happens is that when you get one of these high-profile ballot initiatives like California, there will be a tremendous amount of spend from both sides, a lot of positive campaigning and a lot of negative campaigning.
That means a lot of potential misinformation as voters get inundated with so much information. They’re going to be overwhelmed by the time November rolls around. Unfortunately, I think you end up in a situation, as we’ve seen statistically when there are competing ballot proposals, voters tend to vote no. I’m not saying that will be the case here, but statistically speaking, it favors a no vote on both.
It’s a long way to go between now and November. We’ll see.
Sowing Division
Steve Ruddock: If the commercial proposal starts polling a bit better, is there a chance its backers will look to divide the tribes and form partnerships with specific tribes?
Brandt Iden: I think there was some hope within the stakeholder community that those conversations would’ve happened prior to where we are today, and we were going to get to some sort of resolution and compromise between the commercial providers and the tribal folks.
Now that doesn’t mean a deal still can’t be reached because I think that those conversations could continue, as you have so many tribes and differences of opinion in California. You have some tribes that support a more online model than the current retail-only tribal proposal.
So, you may see some division there. And I still think, where does this go at the end of the day? It’s quite possible that we see some model that looks maybe a bit more like Michigan. Is there a compromise to be reached where it’s tribal control, but they have the opportunity to partner with the big brand names in the industry?
I think that if you ask the commercial operators, that’s where they would like to see this go. Whether the tribes can get there, I’m not so sure. And I think it all depends on how it shakes out on election day in November.
What Happens if an Initiative Is Approved?
Steve Ruddock: One of the aspects people aren’t talking about is this isn’t a bill. This isn’t a law. It’s a framework. Assuming an initiative passes, what role does the legislature play?
Brandt Iden: I think we will have a flurry of activity after election day. There may be a court case. And you’re exactly right, this is just the framework. And so what happens is the legislature would have to go back and kind of fill in the blanks, as I like to call it. Okay, this is the framework for how we’re supposed to do it, but we’ve got to fill in many details here. Then you have the rule promulgation process and what that looks like and how it will be regulated by the tribes or potentially with the commercials involved. So, there’s a lot of work after election day as to how this thing goes.
And I think that means it probably gets pushed out in terms of when folks can actually place a wager in California, more like 2024ish, or maybe 2025. I think it all depends on whether there’s a court case, whether it’s retail-only (which would be a quicker process) or mobile.
So, unfortunately, I still think we’re a way out, although this is a good step in the right direction. In general, I believe the stakeholder community would like to see some movement in California one way or the other. I think it would be nice to say, now we know where the voters are on this issue because if you look at all the polling right now, both sides will tell you they’re going to pass overwhelmingly, and the other one isn’t. So, it’ll be interesting to see how it plays out.
Reaching a Compromise
Steve Ruddock: While not as contentious, you’ve dealt with this tribal-commercial dynamic firsthand. How do we get stakeholders on the same page? Michigan was rather creative with that. There was a lot of give-and-take, like licensing tribes as commercial operators to avoid stepping on their sovereignty. And policies like a one-for-one launch to prevent competitive advantages. What are some of the behind-the-scenes issues that California’s facing that people don’t realize?
Brandt Iden: There are many moving pieces to that, but I will tell you that what it comes down to is you’ve got all these separate sovereign tribal nations. They are very unique, and they are very different, and they all are looking for something unique when it comes to how they want to do gaming, whether it’s on their reservation or off-reservation. They all have their own ideas about how they would like it to be done.
So, I know people say, why can’t the tribes just come together and agree to something? It doesn’t really work like that, because they’re all looking for unique things that benefit their sovereign nations. And what makes sense for one doesn’t necessarily make sense for the tribe next door.
My guess would be one of the contentious behind-closed-doors points is you’ve got the smaller tribes and the larger tribes. And the smaller tribes are probably saying, we’ve got more of a desire to branch out statewide a bit more than maybe the larger tribes do.
And, it’s because of the player base, right? It’s because of location. It’s because of access to the casinos. And obviously, the larger tribes control the market a bit more than the smaller ones do. It’s those access points of entry that are the same, whether we’re talking about commercial operators or tribal operators. And just because they’re all tribes doesn’t mean they’re necessarily going to agree on it.
One of the interesting things about the retail initiative is, if you recall, this was out there prior to COVID and really got derailed because of the pandemic and COVID.
A couple of years ago, the tribes said, we’re interested in mobile, and we’re interested in statewide mobile. We just want to do this incrementally. And we want to start with retail first. I don’t think that position has changed at all with the tribes. I think they want to test the waters and make sure that they maintain their sovereignty with retail first, and then they ease into the market with mobile.
So even if the retail-only initiative passes, we will eventually see a mobile model in California. I’m not sure what that looks like, but I do believe that the tribes will move to a full mobile model at some point.
