Risk & Reward
Tribal operators grapple with the ups and downs of iGaming and mobile sports betting
By Marjorie Preston
On Super Bowl Sunday , some 50 million Americans placed $ 16 billion worth of bets on the big game — an all-time high , more than double the $ 7.5 billion wagered in 2022 , according to the American Gaming Association .
But sports fans in California were out of luck . Though the state has 69 casinos , there are no sportsbooks , online or retail . That ’ s because the tribes who run those casinos don ’ t want sports betting — not without a guarantee that it ’ s theirs alone to offer .
The most populous state in the U . S ., home of 16 major league sports teams , is also the biggest untapped sports betting market . But for tribal operators , the promise of a new industry comes with considerable risk : the specter of competition from out-of-state commercial operators .
Last November , competing propositions — a retail sports betting bill from the tribes , and an online and mobile version from FanDuel , Draft Kings , BetMGM and others — failed at the polls , despite an onslaught of advertising ( the two sides spent a combined $ 460 million to push their proposals ).
Jacob Mejia , vice president of public affairs for the Pechanga Development Corporation , told CalMatters . com that tribes were less interested in introducing retail sportsbooks than they were in blocking mobile betting . The online measure , he said , was “ the biggest threat to Indian gaming in a generation .”
The issue is tabled for now , but it ’ s sure to be back . At G2E last fall , Mark Macarro , chairman of the Pechanga Band of Luiseño Indians , suggested mobile sports betting in California could be the first domino that kicks off full online casino gaming , which could become “ a disaster ,” he warned .
“ Thank goodness that ’ s not going to happen this cycle ,” Macarro said , in comments made weeks before voters cemented that decision at the polls . “ But it ’ s going to repeat in two years .”
Define ‘ Online ’
In California , online casino games are still prohibited by the state penal code , under the theory that online bets don ’ t exist only at the location of a casino server , but wherever the gambler is , and in the vast “ out-there ” of the internet .
In 2014 , when an enterprising California tribe asserted its right to offer online bingo , the Ninth District Court of Appeals stepped in . While the servers were located on tribal land , which presumably made the bets permissible , the court ruled that online bets placed by people not physically on the reservation would violate the Unlawful Internet Gaming Enforcement Act ( UIGEA ).
That decision meant the end of gaming by the Iipay Nation of Santa Ysabel , whose remote location and limited slot inventory made it hard to compete with larger , more centrally located venues . Shortly after the tribe ’ s online casino closed , the retail gaming hall followed ( it is now a marijuana dispensary ).
And then there ’ s Florida . In 2021 , Governor Ron DeSantis and the Seminole Tribe agreed to a “ hub-and-spoke ” sports betting model , whereby the tribe would offer mobile bets throughout the state via servers on Seminole lands . But Judge Dabney Friedrich called a halt to the launch .
“ Tribes need to speak with a unified voice when it comes to legislative matters , to maintain exclusivity around online gambling of all forms .”
— Brian Wyman , Senior Vice President of Operations and Data Analytics , The Innovation Group
16 TRIBAL GOVERNMENT GAMING 2023