Supporters of Sports Gambling Legalization Halt Effort for 2020 Ballot Measure

A push to legalize sports wagering in California through a November 2020 ballot measure has been abandoned, supporters announced on Monday.

The sports gambling proposal, or Senate Constitutional Amendment 6 (SCA 6), could have added California to the growing list of states that permit gambling on sporting events. But provisions in the measure that tackled thorny issues around state gaming laws drew fierce opposition from many of the state's Indian tribes, which own and operate lucrative casinos throughout the state.

"We were running out of time," said Sen. Bill Dodd (D-Napa), the bill's author, in an interview. "The reality is there’s a lot of players involved when you talk about gambling in the state of California. We just couldn’t get all the interests aligned and the votes that we needed in both houses in a timely manner."

Dodd and Assemblyman Adam Gray (D-Merced) worked on the sports wagering proposal for more than a year, after a 2018 U.S. Supreme Court decision opened the door for states to legalize and regulate sports gaming.

The framework they introduced last month would have accomplished that through a November ballot measure. SCA 6 would have created a 10% tax on wagers placed in-person at tribal casinos and horse race tracks, and a 15% tax on bets placed online — where the vast majority of betting action takes place across the country.

Supporters believed the state's bleak budget picture could win broad backing for the taxes on sports betting, which some estimates projected could raise up to $700 million a year for the state's general fund.

But getting the idea through the legislature (where the bill required two-thirds support) was complicated by provisions that tried to resolve California's existing gaming structure — and the contentious relationship between tribal governments and competing cardrooms.

SCA 6 would have allowed cardrooms to continue offering controversial games, such as a version of blackjack played with a rotating dealer. California Indian tribes have said that the game, known as 21st Century Blackjack, impinges on their exclusive right over casino games.

In return, Dodd and Gray's proposal would have allowed tribes to introduce craps and roulette at their casinos.

Those provisions were not enough to win over many of the state's politically powerful tribal governments, which viewed the cardroom provisions as a direct attack on their sovereign rights.

"While we appreciate that the state was trying to find additional revenues during this time, this bill was simply bad policy," said James Siva, chairman of the California Nations Indian Gaming Association, in a statement. "It unjustly rewards the commercial, for-profit gaming industry for their practice of conducting Nevada-style games in flagrant violation of California law. This bill would have also threatened brick-and-mortar establishments by legalizing online gaming, which would reward out-of-state commercial business entities and raise regulatory challenges.”

In a Thursday letter to Dodd and Gray, dozens of tribal leaders said the proposal was another "broken promise" to California Indian tribes, a year after Gov. Gavin Newsom issued a formal apology for the state's history of violence against Native Americans.

"As written, and as amended, SCA-6 would repeal constitutional rights Californians granted as a measure of recompense, however inadequate, for the State’s mistreatment of Native people," the tribal leaders wrote.

There are 63 tribal casinos in California generating some $8 billion in net revenue each year.

Dodd said the complexity of their proposal, along with the fast-approaching June 25th deadline to place measures on the November ballot, made it difficult to reach a compromise — some senators were hesitant to back a controversial bill that may not have made it through the Assembly by Thursday.

"If we’d come out without the card room thing in there, yes, it would have been easier. Two, had we come out earlier ... I think it would have been easier," Dodd said. "I think the COVID-19 situation really ended up being the third factor that made this very, very difficult. It’s pretty hard to [negotiate] on phone calls, even on Zoom calls. With face-to-face meetings, in a different environment without COVID-19, I really think this could have been different.”

While SCA 6 is shelved for the year, Dodd said negotiations will continue around a future sports gaming initiative.

A group of tribes are pursuing their own sports gambling measure, which could appear before voters in 2022. The COVID-19 lockdown halted signature gathering for the proposal this spring, and dashed hopes that the measure could qualify for the November ballot.

Unlike SCA 6, that ballot proposal would only authorize in-person wagering on sporting events, and it includes a provision that would make it easier to bring civil lawsuits against cardrooms over their gaming offerings.

Many cardrooms viewed SCA 6 as a needed protection against attacks from tribal governments. And cities that rely on tax revenue from cardrooms, such as Commerce, Hawaiian Gardens and Inglewood in Los Angeles County, and the town of Colma in the Bay Area, lined up behind the bill.

"The failure to pass this legislation is the loss of the opportunity for the state to generate billions in revenues that are desperately needed for housing, homeless, health care and emergency services," said Kyle Kirkland, president of the California Gaming Association, which represents dozens of cardrooms in the state.