Tabled in October, the Sports Wagering Regulation and Tribal Gaming Protection Act, would allow for legal betting. If approved, the ballot would amend Article IV, section 19 of the California constitution. This will grant tribes exclusive rights to offer retail and online betting.
The initial version of the ballot set out several measures. These included tribes submitting 15% of adjusted sports betting gross gaming revenue into a tribal wagering revenue sharing trust fund.
Tribes would also contribute 10% of their adjusted sports wagering GGR into the California homelessness and mental health fund. It was also stated that tribes would need to partner sports betting operators, which would operate as vendors. These will require approval from both the Tribal Gaming Agency and California gaming agency.
The first version of the ballot drew some support, but questions remained over some of its measures. Eagle1 has now amended the ballot after feedback from tribal leadership, out-of-state operators, regulators and other stakeholders.
What has changed in the California sports betting ballot?
Amendments include that sports wagering could not be offered until 1 July 2025. This is slightly earlier than the originally proposed date of 1 September 2025.
There is a rise in income to revenue share for tribes. Those tribes receiving approximately $1.0m (£793,496/€926,803) annually under current conditions would receive an estimated 15-20 times more under the proposed measures.
Sports betting GGR contributions to the tribal wagering revenue sharing trust fund has also increased from 15% to 25%. Meanwhile, a requirement for in-person online gambling registration for those outside of a 10-mile radius from a casino would be removed after two years.
As for other changes, the ballot now makes it easier for tribes to become their own affiliates. It was also agreed that any promotional credits would be taxed after five years.
In addition, it was stated that tribes will not have to provide any financial backing to support the passage of the proposition. Eagle1 will bear the entire burden, including the signature campaign at a cost of approximately $25.0m and a public vote campaign that will likely cost several hundred million dollars.
The ballot maintains that California has the potential to become the largest legalised sports betting market in the US. It estimates annual wagers could reach $60.00bn and revenue $3.00bn.
Tribal support “paramount” to ballot success
Eagle1 partner Kasey Thompson says it is hoped the changes will secure more support from tribes. Thompson, also an architect of the proposition, added that without this backing, the ballot will not pass.
“We took a proposal that had the support of more than 70 tribes and was one of the most tribal-focused propositions ever, made amendments based on tribal and regulator feedback and updated it for today’s legal landscape,” Thompson said.
“What we are trying to do is create something that works for everyone. Tribal support is paramount to the success of this effort and we will not put it on the ballot without approval from a majority of the tribes.”
Reeve Collins, co-founder and CEO of Pala Interactive, also backed the amendments. Collins said: “We removed language we were told did not work for the tribes and for the first time have created something inclusive for all. This includes tribes, land-based casinos, regulators, out-of-state operators and the people of California.
“This is a forward-thinking and tribal-centric proposition that finally paves the way for sports betting in California.”
Additionally, the tribes will not have to provide any financial backing to support the passage of the proposition with Eagle1 bearing the entire burden, including the signature campaign at a cost of approximately $25 million and the public vote campaign which will cost several hundred million dollars.
Eagle1 added that it will continue to work with tribal leaders to secure support for the proposition. This is with the aim of getting it on the ballot for the 2024 California election and ultimately pass it into law.
What happens next?
When the initial ballot was published, it was stated Pala Interactive had 180 days to gather the required signatures through random sample. This, however, would push its deadline to 23 April 2024, late in the season.
Backers would need 874,641 in order for the ballot to be put forward for consideration with voters. Election officials would also need to verify a minimum of 500 signatures. The 2024 election will take place on 5 November.
Those submitting a ballot to the attorney-general must leave 65 days between submission and collecting signatures. This suggests signature collection would begin on 1 January.
Could California finally legalise sports betting?
Only last November, voters in California rejected sports betting proposals. There are doubts over whether trying again so soon after will be successful.
The rejection came despite a poll in February 2022 revealing some support for legal sports betting. In May 2022, it was confirmed a proposition would feature on the ballot. This was to sit alongside another sports betting initiative backed by tribal gaming groups entitled the Tribal Sports Wagering Act Initiative.
However, Democrats in California recommended voters vote against betting proposals. Both proposals eventually appeared on the November 2023 ballot but were ultimately rejected by voters.
Original article: https://igamingbusiness.com/legal-compliance/legal/amendments-submitted-california-sports-betting-ballot/
