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Executives from FanDuel and DraftKings, two of the most prominent sportsbooks in the market, attended the Indian Gaming Association's tradeshow and convention on March 31, attempting to smooth things over with California tribes, hoping to open a path to legalizing sports betting in the state. There are more than 60 tribal casinos in California, but voters already struck down two proposed measures that would have allowed sports betting at these casinos as well as online.

Christian Genetski, president of the FanDuel Group, spoke about the value sports betting could have to the California tribes and the importance of understanding their needs when it comes to legalization.

"We've said that we still believe that a solution for California creates winners across the board and, most importantly, creates a real generational opportunity for tribes in California," Genetski said. "We know that conversation needs to be driven and led by the tribes. We continue to say that we're available to share any and all of our information to be helpful in finding a framework that starts on a principle of tribal sovereignty, ownership, and wealth creation.

DraftKings CEO Jason Robins acknowledged previous mistakes when approaching sports betting in California and understanding the tribes was key to making sure a partnership would eventually be reached. 

"No other state out there has more ability to impact our long-term growth than California," Robins said. "If California were a country, it would be the third or fourth largest economy in the world. Tribal relationships are absolutely essential and it's the only way to do it here. There's no chance for online sports betting in California without tribes feeling like their sovereignty is respected. We learned early that we didn't understand this was different. 

"We thought that as long as it works in a way where everyone is doing well and the opportunity to make money and tribal sovereignty are respected, that's fine. How the tribes wanted to do it was totally different than with other tribal partners around the country. That was the big lesson for us: California is its own place and every place is unique. You have to understand the people, communities, and situations. No solution will be exactly the same."

Previous sports betting measures in California

California voters had the opportunity to legalize sports betting at the state's tribal casinos and online on Nov. 22, 2024, with Prop 26 and Prop 27. However, the tribes spent money pushing against both measures and even got support from Governor Gavin Newsom. Prop 26 received support from just 33% of voters, while Prop 27 saw 17% support. The tribes voted against sports betting measures in Dec. 2023 as well.

California Nations Indian Gaming Association Chairman James Siva said sports betting could return to the ballot as soon as 2026, but the sportsbooks and tribes needed to come together to develop a better plan to put before voters. That starts with FanDuel, DraftKings and other sportsbooks collaborating with the tribes and understanding their vision. The tribes remain the biggest hurdle to sports betting becoming a reality in California. With more than 100 tribes in the state, a compromise where everyone benefits will take time.

Impact of sports betting in California

As Robins highlighted, California is a massive market with close to 40 million residents. Most projections show $3-4 billion in annual revenue from sports betting for the state, a portion of which would go to the tribes. According to the Santa Monica Mirror, the state is losing close to $500 million in projected tax revenue with sports betting not being available. Legalizing sports betting could have secondary effects, such as more business for restaurants and sports bars during games. There could also be scenarios where California sees more tourists who travel for events integrated with sportsbook rewards experiences, leading to additional spending in the state.

Newsom mentioned the risks of underage gambling when speaking out against Prop 26 in 2022. Even though sportsbooks provide plenty of responsible gaming resources and the state already has regulations for casinos, it's hard to forecast the impact of online sports betting across a population of this magnitude. California could have additional regulations surrounding mobile sports betting that make it harder for fans to place wagers, potentially curtailing some revenue projections.

Future of sports betting in California

On Tuesday, April 1, the Sports Betting Alliance (FanDuel, DraftKings, BetMGM and Fanatics) compiled a plan to form a "mega tribe" in California, which would work directly with SBA to bring sports betting to the state. The tribe can choose which sportsbooks to work with, which could exclude secondary platforms such as Hard Rock, BetRivers and ESPN Bet. According to Covers reporter Ryan Butler, the earliest possible launch for sports betting under this proposal would be 2027. Siva previously said 2028 was a more realistic timeline, but it does seem the tribes and sportsbooks are coming together to make sports betting a reality in California.

It's unclear how much of an impact Genetski and Robins' comments had with this proposal being welcomed, but there's certainly a more promising feeling around this initiative compared to the measures on the 2022 ballot. Voters would still have to approve any measure put forward by the tribes and sportsbooks, which likely won't take place until 2026.