The fight over control of California sports betting is between tribes and sportsbook operators. But other interested parties, like California’s cardrooms, are putting their thumb on the scale.
Both initiativess’ chances of passing are on shaky ground, making the cardrooms’ thumb a potential gamechanger, even if its impact is at the margins.
Recommended reading for those unfamiliar with the two initiatives: Comparing and contrasting California’s sports betting initiatives
Cardrooms Present a Worst-Case Scenario
A coalition of Southern California cities has launched a campaign claiming the tribal ballot initiative would decimate the commercial cardroom industry and threaten 32,000 jobs and $1.6 billion in annual wages.
Per local reporting, “The anti-initiative coalition — including representatives from Commerce, Compton, Hawaiian Gardens, and Bell Gardens — held a press conference Thursday, May 19, outside the Commerce Senior Citizens Center to voice their concerns.”
The initiative’s primary aim is to legalize retail sports betting at tribal casinos and the following racetracks: Santa Anita Park, Los Alamitos Race Course, Del Mar and Golden Gate Fields.
It also authorizes tribal casinos to add craps and roulette games and opens the door to lawsuits against cardrooms.
The opposition coalition noted the initiative extends a tribal monopoly on gaming. Still, the biggest concern is a provision in the tribal initiative that allows individuals or entities to initiate costly litigation against cardrooms.
Of note, the cardrooms do not support the alternative initiative that would legalize online sports betting, which also excludes commercial cardrooms. The possibility of lawsuits is central to the cardroom opposition to the tribal initiative.
The Potential Fallout
The coalition warns that if the initiative passes and the expected lawsuits become a reality, it could be a death knell for the commercial cardroom industry.
Hawaiian Gardens City Councilman Jesse Alvarado said his city’s budget would suffer a massive hit if the Gardens Casino were to close its doors.
“The Gardens Casino, which has operated in the city of Hawaiian Gardens for the past 22 years, is a critical partner to our entire community – providing more than 68% of our city’s total general fund revenues,” Alvarado said in a statement.
Bell Gardens Councilwoman Alejandra Cortez also painted a bleak picture of life without the Bicycle Hotel & Casino. According to Cortez, “The Bike” is responsible for 46%, or $15 million, of the city’s general-fund revenue.
‘Only the Guilty Need Worry’
The tribes see it differently.
“Our measure simply ensures existing laws preventing illegal gambling are being followed,” said Kathy Fairbanks, a spokeswoman for the Coalition for Safe, Responsible Gaming. “Cardrooms following the law have nothing to worry about — nor do their employees.
“The only cardroom casinos at risk of legal enforcement are those that repeatedly violate California gaming laws.”
However, tribes have long sought to stop player-banked card games at commercial cardrooms and have raised numerous complaints about the use of third-party dealers to keep these rotational deal games (blackjack and pai gow poker) going.
You can find a deeper explanation of this dispute here:
- California Card Rooms Will Face Stricter Rules For Player-Banked Games Following AG Review
- Tribes And Card Rooms Waging War Over Table Games
No Margin for Error
The competing sports betting initiatives will almost certainly cannibalize one another, leaving a very slim margin for either to pass.
The likely result is a costly campaign for all sides involved, with a very low likelihood of success. Based on what we’ve seen thus far, going negative and painting the other side in a bad light appears to be the strategy.
Success will require two things:
- The coalitions will need to convince voters uninterested in sports betting that legalization will be good for California, and they should vote “Yes” on one or both of the initiatives.
- Sports betting supporters will need to be convinced to vote for both initiatives, which is less likely to occur among the tribe’s base of support.
Neither is likely to happen in a climate of negative political ads.
As noted in a previous column:
“Assuming 30% of voters are against gambling, and each initiative has a base of 20%, neither initiative is likely to hit 50% if the remaining vote is split.”
