Two Online Sports Betting Initiatives Filed In California

Two proposed ballot initiatives filed with the attorney general Friday give California Indian tribes exclusivity for in-person and online California sports betting.

Although no tribe is listed in the filing, individuals involved in the filing had prior business dealings with the Pala Band of Mission Indians. And as previously reported by PlayUSA, Pala Chairman Robert Smith had been in contact with some tribal leaders this month about filing a sports betting initiative.

It is not a widespread tribal effort, and multiple representatives of key California gaming tribes tell PlayUSA that they were not consulted prior to the filing.

Jacob Mejia, VP of Public and External Affairs for the Pechanga Development Corporation and spokesperson for the Coalition for Safe and Responsible Sports Wagering that opposed online sports betting initiative Prop 27 last election cycle, dismissed the filing:

“As far as we are concerned, this is a tribal measure in name only. We are not aware of any tribes having drafted this initiative. It sounds an awful lot like the ballot measure that was crushed by 82% of voters less than a year ago.”

Reeve Collins, co-founder and CEO of Pala Interactive, an online gaming platform created by the tribe and sold to Boyd Gaming in 2022, is listed as the contact for the initiative filings. The filings were signed by Ryan Tyler Walz, whose relationship to Collins is unclear.

One filing provides a full framework for California sports betting under Indian tribes. The other merely amends the state constitution to ensure that the state legislature may not authorize in-person or online sports betting for any person or entity other than an Indian tribe.

The state legislature could then set up the framework for sports betting with Indian tribes, who would enter compacts with the state, at a later date.

Pala Interactive founder sends letter to tribes after filing

Kasey Thompson, another Pala Interactive co-founder, sent tribal leaders a letter following the initiative filing. Thompson lists himself as president and CEO of Eagle 1 Acquisition Company, for which Collins also is involved.

“Our proposal permits only California tribes to control in-person and on-line sports betting in California,” Thompson wrote in the letter, acquired by PlayUSA. “Our proposal enables all California tribes to control their own destiny, and participate in sports betting however and whenever they see fit. Most importantly, our proposal prohibits all offshore and out-of-State operators from controlling sports betting in California.”

Thompson described Eagle One as founded to bring sports betting to California tribes. He pledged that Eagle One would entirely fund the initiative at no cost to tribes. He asked to meet with tribal leaders to discuss the proposal:

“We have met with a number of California tribes, and we would like to meet with you and all other tribes over the next 30 days so that we can ensure that our initiative represents your interests and reflects your input. We do not plan to proceed unless we have the full support of the California tribes.”

At a time when it appeared no California tribes or commercial operators were interested in filing a sports betting initiative for 2024 following the 2022 election failures, Thompson explained why he believes now is the time for a filing:

“We do not believe that waiting another two years is in the best interests of the California tribes or the people of California. The California tribes and the State itself are leaving significant revenue on the table, and we want to help reverse that situation now. The impact of the recent rulings in the Florida Seminole case have yet to be felt in California but could be significant. The time to submit a sports wagering proposal in California is now.”

Lack of tribal involvement in filing curious

When tribes filed what became Prop 26 in 2019, tribal leaders put their signatures on the proposed initiative.

Although he previously discussed the initiative with tribal leaders, it is noteworthy that Smith did not file the initiative. And tribal sources tell PlayUSA that Smith was invited to Thursday’s California Nations Indian Gaming Association (CNIGA) meeting to discuss the proposal and did not show.

CNIGA Chairman James Siva released a statement:

“The California Nations Indian Gaming Association is deeply disappointed that the sponsors of the two recently filed initiatives did not first reach out to the State’s largest tribal gaming association for consultation and input. Instead, CNIGA and our member tribes were alerted to their existence when they were filed with the Attorney General today.

“Decisions driving the future of tribal governments should be made by tribal governments. While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate.”

Other tribal representatives reached by PlayUSA described the filers as commercial interests that lack established relationships with California Indian tribes, outside of Pala. And they didn’t take kindly to Thompson’s letter, calling it “patronizing.”

Details of California sports betting initiative

Titled the Sports Wagering Regulation and Tribal Gaming Protection Act, the fully formed initiative seems similar to the framework introduced last election cycle by tribes led by the San Manuel Band of Mission Indians.

Details include:

  • Tribes enter compacts with the state and contract with sportsbook operators as vendors.
  • Requires all California sports betting sites and mobile apps to be branded exclusively under the tribe’s federally recognized name.
  • Requires in-person registration for online sports betting accounts.
  • Only permits sports wagering by people 21 and older. This is relevant because some California Indian tribes allow gambling at 18 and older in their casinos.
  • Permits sports wagering only on professional, college, or amateur sports or athletic events. Excludes high school and lower-level school sports or athletic events.
  • Provides new sources of revenue to tribes and California communities to help address
    homelessness and mental health throughout California by the establishment of the California Homelessness and Mental Health Fund.
  • Suggests a model form sports wagering compact in which sport wagering tribes contribute 10% of adjusted sports wagering gross revenue into the California Homelessness and Mental Health Fund and 15% to revenue sharing with limited and non-gaming tribes.
  • Caps management service providers partnering with tribes to operate online sports betting to 40% of net revenues. It also limits such partnership agreements to seven years.

Petitioners won’t have much time to qualify for ballot

This is late for a California initiative filing, making qualifying difficult for the November 2024 election.

To have the full 180 days to collect signatures for a random count, the secretary of state recommends submitting an initiative by Aug. 22. After filing the initiative with the attorney general, the petitioner must wait 65 days to circulate the petition for signatures.

So the petitioners wouldn’t be able to begin collecting signatures until January, giving them about four months to collect the 874,641 valid signatures required to make the ballot.

The secretary of state recommends petitioners submit signatures to counties for verification by April 23. But there can be a one-to-two-week leeway.

Initiatives must be qualified by the secretary of state by June 27, 2024, at least 131 days prior to the Nov. 5 election.

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