Sports betting measure may be defeated due to voter apathy and targeted ads

By Nicole Nixon and Guy Marzorati, KQED

A ballot measure to legalize online sports betting in California appears headed to defeat, crushed under the weight of voter apathy toward sports betting and a flood of opposition ads funded by some of the state's Native American tribal governments.

Proposition 27 is backed by sports-betting companies such as DraftKings and FanDuel. The measure would require each company launching an app in California to partner with a tribal government.

At least three California tribes have come out in support of Prop. 27. They hope that affiliation with leading sports-betting companies would provide an economic lifeline to their members. But opponents of the measure warn that language tucked in Proposition 27 would make those tribes pay a high price for their partnership: the surrender of some tribal sovereignty.

"The idea would be that this is such a great opportunity for a select number of tribes to do this, and the market is so potentially lucrative that [the tribes] will set aside our sovereign authority … in order to partner with one of these commercial operators," said Steven Light, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota.

Tribal governments are not taxed like businesses for their casino operations on tribal lands. Instead, they negotiate compacts with the state of California laying out rules for gaming regulation and how much casino revenue will be shared with the state.

Proposition 27 "would sort of be a carve-out outside of the compact framework," Light said. "Tribes, in partnering with these commercial operators, would be subject to the same rules and regulations and so forth as those commercial operators."

One of the tribes who appears willing to make that trade-off is the Middletown Rancheria of Pomo Indians in Lake County. The tribe's chairman, Jose "Moke" Simon III, was featured heavily in ads supporting Proposition 27 over the summer, sporting a bright red shirt and speaking to the camera about the economic benefits that could accompany the legalization of online betting.

"Prop. 27 supports financially disadvantaged tribes that don't own big casinos," he said in one.

Simon, who did not respond to requests for an interview, has served as tribal chairman since 1997 and also is a county supervisor. Middletown Rancheria operates the Twin Pine Casino and Hotel with more than 500 slot machines, a modest number compared to those of the larger tribes in the state.

In a state legislative hearing on Proposition 27 held in August, Simon told state legislators that his 250-member tribe is searching for new revenue streams to build housing, fund tribal programs and buy back ancestral lands.

"Middletown Rancheria has looked at the opportunities for us to grow for the next seven generations, and we're limited," said Simon. "This is just an opportunity for one tribe to make a decision, a sovereign decision on how they're going to move their people forward."

But the dozens of California tribes opposing Proposition 27 argue that the concept of sovereignty goes beyond economic self-sufficiency.

What is tribal sovereignty?

Tribal sovereignty refers to the right of tribal nations — as sovereign governments — to make laws and decisions governing their own lands and people.

Generations of genocidal policies from European colonizers, including the federal government, resulted in the deaths of hundreds of thousands of Natives, stolen lands and fractured tribal identities. The ability for tribes to govern themselves is crucial to their cultures, said Joely Proudfit, director of the California Indian Culture and Sovereignty Center at California State University, San Marcos.

"What makes a tribe is its people," said Proudfit, a descendent of the Payómkawichum people, who lived on land that makes up portions of what is now Los Angeles, Orange and San Diego counties.

"The tribe having the wherewithal and the resources to govern its people and its lands and its waters is critical. So, to lose that and just have the people blend into society as simply another racialized group is really harmful to tribal peoples," she said.

Tribal sovereignty and gaming exclusivity

Many tribes also see Prop. 27 as a threat to their gaming exclusivity. In California and many other states, tribes are the only entities legally allowed to operate casino-style games such as slot machines and card games where the house acts as the dealer.

"Proposition 27 is a massive expansion of online gaming, threatening our sovereign right to operate gaming in this state," Sara Dutschke, chairperson of the Ione Band of Miwok Indians, said at a legislative hearing in August. The tribe signed a gaming compact earlier this year and is currently building a casino on its land in Amador County.

"This assault is sadly not surprising," Dutschke said. "Historically, when Indian tribes have exercised our sovereignty and worked to secure greater self-determination, our efforts have been stymied and our means to self-reliance taken from us."

Casinos are a major economic driver for tribes that operate them. Revenue from gaming can help fund emergency services, health care, education and more.

Proudfit said that, in that way, gaming exclusivity helps tribes achieve sovereignty: "Tribal sovereignty is wonderful, but having the resources to enact tribal sovereignty are critical."

Not all tribes can afford to build big casinos. Gaming operations require land, money and detailed compacts negotiated between tribes and the state. Those compacts sometimes include revenue contribution requirements or payments to local governments to fund infrastructure.

Tribes say Prop. 27 threatens sovereignty and gaming exclusivity

Of particular concern for some tribes, Prop. 27 would require them to sign agreements with big companies like FanDuel or DraftKings in order to participate in online sports betting, a "nonstarter" for many tribes, according to one tribal lawyer.

By signing such agreements, "the tribe expressly must waive its sovereign immunity. It's got to allow itself to be sued, and that is a nonstarter with respect to tribes," said Jeff Butler, general counsel for the Yocha Dehe Wintun Nation, which operates the Cache Creek Casino Resort in Yolo County.

At the hearing this summer, Simon, of the Middletown Rancheria, acknowledged that his support of Proposition 27 left him to "stand alone" among the many tribal representatives in the room who gathered to voice their opposition.

But he hinted at the fact that the debates over mobile betting, and the accompanying dispute over sovereignty, is likely to persist beyond this campaign.

"There's something coming in '24 if it don't pass now," said Simon. "Getting ourselves positioned to move forward here in California is a very important thing that we need to really look at hard."