A legal sports betting initiative is coming to California in 2028. This is not news. Tribal leaders have promised another go-round at bringing online sports betting to the biggest state in the nation.
Sometime in late 2027 or early 2028, I’ll go the grocery store in my home state, a signature gatherer will ask me to sign on to the proposal, and I will. It will pass, if Indian Country wants it to.
Six years ago, California’s tribes circulated a legal retail sports betting proposal. It did not pass, marking the first time in history that a tribal gambling proposal failed at the ballot box in California. Proposition 26 failed because, ironically, that’s what Indian Country wanted.
Between the time the initiative was proposed and the election, commercial operators had qualified their own initiative, and Indian Country did not want it to pass. So tribal leaders across the state made a stunning decision — kill their own proposal in order to kill another one. The whole endeavor cost tribes about a quarter of a billion dollars.
At that time, I wasn’t so sure that Californians trusted Indian Country enough to make this happen. I wondered if tribal leaders were banking on hope. But in the 16 years that I have lived in Southern California, I have come to learn that the Indian lobby isn’t just powerful, it’s made and delivered on numerous promises to the state and its citizens.
Indian Country is … everywhere
What is Indian Country? In my world, Indian Country is, well, just part of the fabric of everyday life.
I buy gas and see performances on the Pala or Pechanga reservations, use the car wash at the Valley View Casino (San Pasqual Band of Mission Indians), or stay a few nights at the Morongo Casino and Resort. When my daughter was in elementary school, she played at Luiseno Park, named for the Luiseno Band of Mission Indians, whose descendants are now members of several Southern California tribes. The park has pictographs and is designed as a replica of a Luiseno village.
When my daughter was in middle school, the Pala Band of Mission Indians opened its performance center for choir performances. I’ve seen Pechanga partner with the Semper Fi Fund and the Yuhaaviatam of San Manuel Nation foster a century-long partnership with Loma Linda University Health. (The collaboration dates to the early 1900s when doctors at what is now Loma Linda rode on horseback to give medical care and deliver babies at the Serrano Tribe’s reservation. Descendants of that tribe are now part of the Yuhaaviatam of San Manuel Nation and the Morongo Band of Mission Indians.)
Tribes make billions of dollars at their casinos across the U.S., and they share the wealth. Just last week, I was at the ASU Los Angeles campus in a conference room permanently sponsored by the Yuhaaviatam of San Manuel Nation. On my drive home, I passed countless billboards advertising comedians and cover bands, all at tribal event centers.
Trust us, tribal leaders say. And Californians do. So whenever the tribes roll out their next initiative, I have no doubt it will pass.
Anecdotally, tribal leaders have said that the timing may not be quite right for yet another gambling initiative. The plan is to move forward anyway.
Why? Even though online gambling isn’t legal in the Golden State, tribal leaders say prediction markets are siphoning revenue from their brick-and-mortar operations. Three tribes in California have sued Kalshi to keep them off their lands, and Indian Country across the U.S. has mobilized and partnered with states in the fight against prediction markets.
Indian leaders from coast to coast are calling the rise of prediction markets the biggest existential threat to tribal sovereignty and exclusivity in history. California’s tribes are promised exclusivity for gaming via compacts with the state. Prediction market Kalshi continues to argue that since it is not party to the compacts, it can’t be sued or be in violation, but if that were truly the case, why haven’t online sports betting operators launched their traditional platforms?
Siva wants ‘kill shot’ for predictions
Some of those traditional wagering companies — including DraftKings, Fanatics Betting & Gaming, and FanDuel — have prediction products that include sports event contracts and are live in the state. Crypto.com, Kalshi, Polymarket, and Underdog’s prediction product are also available. In my opinion, no matter the legal back-and-forth about whether or not sports event contracts are “swaps,” they are de facto sports betting. And in California, that makes them illegal.
As states across the U.S. struggle with how to manage these platforms and as gaming tax revenue declines (for states and tribes) in part due to their existence, California’s tribes would be wise to move forward with online sports betting legalization sooner rather than later.
While I am not privy to the details of what an initiative might say, I’d posit that the most effective way to keep prediction markets out of California is to ban them — something that could be done via an online sports betting initiative. California Nations Indian Gaming Association Chair James Siva said earlier this summer that the tribes are looking for a “kill shot,” which he defines as a complete, total, no-loophole prohibition on prediction markets. Anything less, he said, could give some level of credibility to the platforms.
To ensure that Indian Country gets exactly what it is seeking, it would make sense for it to include this language in an initiative rather than hope the state legislature will get it right.
Political climate favors Indian Country
That said, the state has had Indian Country’s back over the last several years. First, lawmakers gave the tribes a one-time opportunity to sue the state’s cardrooms. Tribes have long contended that the cardrooms are in violation of the law because they are offering what amounts to house-backed games, the very kind of Class III gambling exclusively awarded to tribes via the Indian Gaming Regulatory Act.
As federally recognized entities, tribes are generally not allowed to file suits in state court. Attorney General Rob Bonta — and his predecessors — have been loathe to come down with clarity on the issue, and the legislature stepped in to give the tribes a shot. Their lawsuit was dismissed by Sacramento Superior Court Judge Lauri A. Damrell, who said she might be wrong but believed that federal law preempts state law in this case. The tribes are appealing.
As the lawsuit was playing out, Bonta’s office issued a revised set of regulations that would change the paradigm and ultimately make many cardroom offerings illegal. But a Superior Court judge in San Francisco struck down those new regulations, prompting a prominent tribal attorney to say that Bonta needs to pick a side because he was trying to play the middle. What is happening with the cardrooms is what Siva fears will happen with prediction markets — Bonta proposed making a game similar to blackjack legal for the cardrooms, the cardrooms pounced on that idea, and they then went to court.
But when it comes to sweepstakes operators, Siva got just the “kill shot” he was looking for. Late last year, lawmakers passed a comprehensive prohibition, and as of Jan. 1 sweepstakes companies exited the state rather than face consequences.
This year, the California legislature and lawmakers have nibbled at the edges of prediction markets. Gov. Gavin Newsom banned by executive order the use of insider information by state officials or appointees, their staff and their families, to trade on prediction markets. There are also bills that pick at prediction markets — one setting a payout limit and another that aims to keep kids out of the crosshairs.
But what is to stop tribal leaders from putting their “kill shot” against prediction markets into an initiative, and letting the voters have their say?
History of success at ballot box
An initiative is, at its core, a chance for any group to write a new law. In this case, that group would be Indian Country, which has traditionally had much success with initiatives. In 1998, Proposition 5, which allowed for gaming compacts and ultimately tribal casinos, passed 62%-37%, though it was struck down in the courts. The tribes followed with a second initiative in 2000, Prop 1A, which explicitly amended the constitution to allow for Las Vegas-style gambling on reservations. That proposal passed with 64% of the vote.
In both cases, the tribes carefully and comprehensively detailed everything from where casinos could be located to what games would be allowed to how tribal gaming would be regulated. In 2022, the tribes were similarly detailed in Proposition 26, which would have allowed in-person sports betting, but they opted to kill that proposal while defeating the commercial-led effort to legalize online sports betting.
“Prop 27 had 83% no,” Siva said during a New Normal webinar July 29. “But in a lot of ways tribes take pride in that number. We’re the ones who opposed that corporate bill. We had to sacrifice our tribal bill to make sure the corporate bill went down. While people say we have a big hurdle to overcome, we actually put that number together. If tribes reach out to Californians and say we don’t believe in this, they believe us.”
In fact, the 2022 defeat of Proposition 27 was the most lopsided initiative defeat in California history. And it was the result of a targeted tribal campaign that essentially said, “Trust us.”
Indian Country will leverage that phrase again.
Tribal unity and equity key
This time around, I expect a comprehensive initiative that will be the result of nearly a decade of intertribal negotiation. I don’t know for sure what will be in it, but the goal isn’t just to bring legal sports betting to California, it’s to continue to elevate tribes. Siva and other tribal leaders have spent years visiting their tribal brothers everywhere from the Mexican border to the San Joaquin Valley to the shadow of Mount Shasta. The sell to the non-gaming tribes is that the biggest tribes will take care of them, and that every tribe will have access to gaming dollars.
I feel certain that what won’t be in the proposal is any kind of place for operators of prediction markets, whether that be Kalshi and Polymarket or DraftKings and FanDuel. The tribes have had more than a year now to understand that the very businesses that want to partner with them for sports betting are currently siphoning gaming dollars away from Indian Country via prediction markets. Those decisions may well mean that California won’t have the biggest sports betting brands, and that the tribes name their platforms for themselves.
“So the word you gave to tribes and told tribal leaders you said you would not do … they are now saying ‘market conditions changed,’” Siva said in April. “It is purely about the money, and their money does not mean anything. For us, how we operate here, is our word is everything.” Siva later challenged tribal leaders not to forget.
What’s coming in 2028? Only a select group of tribal leaders knows for sure. But rest assured, California’s tribes will leave no room for those whom they believe have wronged them.
