The Steps to Launch Tribal Sportsbooks If Prop 26 Passes in California
Voters will have a chance to legalize California sports betting when they go to the polls next Tuesday. But it would be some time next year — maybe late next year — before sportsbooks linked to California tribes even have a chance to launch.
There is no projected launch date in Prop 26, unlike Prop 27, which stipulates online sports betting would launch by September 2023.
So, California Casinos talked with the Yes on 26 spokesperson to learn more about a potential retail launch timeline.
The issue is tribal-state gaming compacts. Both sports betting ballot measures appearing on the Nov. 8 ballot would require federally recognized tribes to amend their gaming compacts, or agreements, with the state before they could take any bets.
Tribes that already offer certain casino-style games would need to add sports betting to their compacts by amendment — not a full renegotiation of their compacts. Compact amendments would then need to be reviewed and approved, or otherwise left to go into effect, by the federal government.
So, still, it’s a process that would take several months at least.
Prop 26 spokesperson Kathy Fairbanks told California Casinos last week that it would be “well into 2023” before the amendment process would be complete under that initiative. Prop 26 would allow in-person sports betting at tribal casinos and four licensed private horse racetracks in California.
Tracks would likely launch before tribes because of the lengthy compact process that tribes must go through, she said. But even that would still take time.
“Sports betting won’t launch until 2023, at the earliest,” Fairbanks said.
Fairbanks said she doesn’t know how many tribes would pursue sports betting under Prop 26, or rival Prop 27 (which would allow tribes or sports betting companies partnered with tribes to offer online sports betting). But the process of getting an amended tribal gaming compact signed, ratified, and approved would be the same if either measure passes.
California State Law and Tribal-State Gaming Compacts
Tribal-state gaming compacts are required by law before any tribe can offer casino-style gaming including slots, blackjack, and other Vegas-style games at their casinos. These games fall under the heading of Class III games in NIGC (National Indian Gaming Commission) regulations. So does sports betting.
But before a tribe can sign a compact or amend its compact to offer sports betting in California, the state must legalize sports betting.
That’s basically what Prop 26 and Prop 27 would do — change California law to allow sports betting, which could then be offered by tribes with a gaming compact or others as specified by law. Sportsbooks would either be in-person on tribal land or at tracks (Prop 26) or through licensed tribes/via tribal partnerships with online sportsbooks (Prop 27).
Once election results are certified by the middle of next month, Fairbanks said, compact amendment negotiations between tribes and the state could begin.
“It would be an amendment to the current compacts, not negotiations of the entire compact. And those amendment discussions would begin fairly quickly after (the ballot measure) is certified,” at least in the case of Prop 26, she said.
Tribal-State Gaming Compact Amendment Process, Step-By-Step
A few dozen of California’s 75 gaming tribes only recently renegotiated their compacts, which typically last for 20 years. Before tribes could offer sports betting under either ballot measure, those compacts would need to be amended again.
Gov. Gavin Newsom would be the first stop for tribes that want to enter the sports betting market in California. Tribes involved in any type of Class III gaming are required to negotiate their compacts with the governor in office.
Once compacts are signed by tribes and Newsom, they would require state legislative approval some time next year. Compacts ratified by the legislature would then go to the Office of Indian Gaming of the US Department of the Interior (DOI) for review and approval.
Here’s a quick rundown of that process:
- Once ratified by the legislature, each tribal compact (every tribe has its own) is submitted to the Office of Indian Gaming at the Department of the Interior (DOI) in Washington, D.C.
- The Secretary of the Interior must approve or deny the compact within 45 days after it is received.
- Both the tribe and the state are notified in writing of the decision to approve or deny the compact or amendment.
- A compact or amendment that is neither approved or denied within the 45-day period is considered approved by law.
- A compact or compact amendment takes effect on the date that notice of approval is published in the Federal Register, which is the official journal of the US government.
- Notice of approval must be published within 90 days from the date the compact or amendment is received by DOI.
If each step takes the maximum possible length of time, an amended compact could take up to 135 days — or roughly 4 1/2 months — to get published approval after the DOI receives it.
Tribes could potentially launch their sportsbooks as soon as federal notice of approval is published. In-person sportsbooks under Prop 26 might be able to launch ahead of online sports betting under Prop 27 from a regulatory perspective. That’s assuming either ballot measure passes next week. It’s a big assumption.
Ahead of the retail launches, tribal casinos may start getting pre-launch information out about their California sportsbook bonuses.
Chance of 2023 California Sports Betting Is Slim
The chance of there being any legal sports betting in California next year appears slim at best.
Numbers from a recent Public Policy Institute of California poll make that clear. Only 34% of likely California voters polled were in support of Prop 26. That’s quite a bit less than the 50% plus one vote needed to pass. The numbers were worse for Prop 27 (which the poll showed at just 26% support).
If neither passes, legal sports betting in California would be left up to the state legislature or the initiative process again. State lawmakers have seemed content to leave the issue to the voters in statewide elections.
The next shot for legalization of California sports betting at the polls is in 2024, when a tribal measure that failed to qualify for the 2022 ballot could reappear. That initiative would allow tribes to offer both in-person and online sports betting — a detour from the Prop 26 message of in-person sports betting being the best bet for the Golden State.
Considering that online sports betting generates the most revenue, a 2024 initiative might be the best option for tribes — should they lose at the polls next week.