Sports Wagering and Ongoing Issues Facing Tribes in California

The California Nations Indian Gaming Association (CNIGA) Update

The California Nations Indian Gaming Association (CNIGA), founded in 1988, is the largest regional Tribal gaming association in the United States.

CNIGA is comprised of 48 federally recognized Tribal governments and are soon to add a 49th. This is roughly 45% of the 110 federally recognized tribes in the state. We encompass a wide array of perspectives.

Currently, CNIGA and our member tribes are contending with various ongoing issues related to tribes and Tribal gaming. Sports Wagering has garnered immense coverage over the past year, and we expect no different over the next several years.

Tribes demonstrated their collective strength and united purpose last November with the defeat of Proposition 27, which tribes widely opposed. It suffered the 11th worst defeat of a California initiative going back over a century. An overwhelming 83% of voters rejected the misleading attempt by corporate operators to control the sports wagering market in California.

Proposition 27 would have given out-of-state commercial gaming interests control over online sports wagering in California. It was officially opposed not only by the majority of tribes and Tribal organizations in California, but also a stunningly large coalition from across the political spectrum. California voters were not tricked by misleading ads from corporate operators. Its lopsided defeat should serve as a cautionary tale to those that attempt to enter the California gaming market without working directly with tribes.

Tribes are far better entities to offer sports wagering in California than out-of-state commercial, for-profit corporations. We have a proven track record of operating well-run and well-regulated gaming establishments, and we are inherently rooted in California.

Speaking of well-regulated gaming, CNIGA backed state legislation, AB 341 by Assemblymember James Ramos, was recently signed into law by Governor Gavin Newsom. This law will reinstitute for the next 20 years a moratorium that existed for decades and expired at the end of last year on commercial card room expansion. This is both in terms of prohibiting licenses for new establishments and the number of tables at existing establishments, while allowing for a limited expansion of smaller commercial operators with fewer than 20 tables. Those operators can add up to two gaming tables within the first year after the law takes effect, and up to two more tables every four years thereafter.

The expiration of the moratorium happened at a time when many commercial card rooms have been skirting state gaming law by offering illegal, house-banked games. The introduction of these games has been a slow creep occurring over the last decade. The California Constitution has only bestowed the right to house-banked games to Tribal governments. The expiration of the moratorium threatened to create a dystopian world that would unleash unlimited commercial gaming expansion, including illegal games.

Though illegal games at commercial card rooms remains a serious issue that needs attention from the state, the crisis of unlimited commercial gaming expansion was averted when AB 341 became law. The thing about this legislation that was so remarkable was that despite vast differences, it was the result of hard-won negotiations between Tribal and card room interests.

To be clear, there was dissension on both the commercial card room and the Tribal sides. Those dissenters on the Tribal side were concerned that illegal gaming should be addressed first before any expansion is allowed, something we strongly agree with at CNIGA. Backing this legislation was in no way an endorsement of illegal cardroom practices and we are calling on all state officials to enforce existing law.

While the state of California has thus far used a light touch when dealing with illegal games at commercial establishments, the state itself has violated the law by taking a heavy hand in negotiating with tribes for gaming compacts. Don’t take my word for it, that was the judgments of the federal courts over the past two years.

In terms of gaming compacts, the Indian Gaming Regulatory Act (IGRA) spells out what is fair game for negotiations between sovereign tribes and the states in which they reside. For decades the state of California has made demands of tribes that violate IGRA. The federal courts have agreed.

In the 2021 case Chicken Ranch Band of Me-Wuk Indians vs. Newsom, a federal judge held that the state of California had overstepped its authority in forcing certain provisions onto tribes via the compacting process and, as a result, negotiated in bad faith.

Last year, that decision was upheld by the 9th U.S. Circuit Court of Appeals. The Appeals decision triggered a lengthy remedial process that is outlined in IGRA. CNIGA is watching this process closely and with great interest as its outcome will have a great effect on future Tribal/ state compact negotiations.

These are but a few of the various issues affecting the tribes in California. As history has proven, any time a Tribal government has something of value, outsiders try to take it. We expect nothing less in the coming years. With the strength of our leaders, we will face these issues head on and work to protect the inherent sovereign rights of Tribal governments.

Written by: James Siva, Chairman of the California Nations Indian Gaming Association

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