The California Nations Indian Gaming Association (CNIGA) in June formally reached out to members of the commercial online sports betting industry seeking “input from prospective Vendors and Partners” as it works toward shaping a 2028 ballot initiative.
Per the calendar in the Request for Information (RFI), obtained by InGame late last week, CNIGA should now be in the process of meeting with “selected respondents” for further discussion. The RFI is dated June 3, industry submissions were due July 1, and a CNIGA working group reviewed submissions in July and August before inviting some companies to offer more information.
It is not clear which or how many commercial sports betting entities or vendors CNIGA invited to reply.
An RFI, often a precursor to Request for Proposal, is a key step in the stakeholders’ quest to bring legal online sports betting to the biggest state in the nation. The confidential document reveals seven key principles that CNIGA — comprised of more than 50 of the state’s 109 tribes — will use to develop its initiative. Among the members are the state’s biggest gaming tribes, including Graton Rancheria in Northern California and the Morongo Band of Mission Indians, Pechanga Band of Luiseno Indians, and Yuhaaviatam of San Manuel Nation in Southern California.
The seven key principles from the document:
- Tribally-Led, Tribally-Driven, Tribally-Owned
- Protect Tribal Sovereignty
- Preserve Tribal Gaming Exclusivity
- Benefit all California Tribes
- Prioritize Funding for Revenue Sharing Trust Fund (RSTF) Eligible Tribes (non-game and limited gaming)
- Indian Gaming Regulatory Act Governed
- Protect Against iGaming
What about iGaming?
The final item on the list likely piqued operators’ interest, as it is widely accepted within the industry that online sports betting is considered the opening act where online casino is main event — in states that have both, online casino tax revenue can be more than 10 times greater than online sports betting tax payments.
While the phrase “protect against iGaming” may at first seem to indicate that California’s tribes don’t want online casino, it is possible they do want it — someday — just not run by potential commercial partners. It’s conceivable that when or if California’s Indian Country is ready to legalize online casino, it will do so with white-label platforms rather than front-facing commercial brands. Tribal casinos own their own casino customer lists, and may choose to capitalize on those in the future.
In California, under the Indian Gaming Regulatory Act (IGRA) and via compacts with the state, the tribes have exclusivity for Class III gaming. A coalition of commercial operators ran an online sports betting initiative in 2022 that suffered the worst initiative loss in state history. Indian Country opposed the measure and spent $250 million to kill it.
Since then, some commercial operators have taken a step back and apologized for overstepping. Conversations between the industry and Indian Country have been ongoing, but nothing as direct as CNIGA reaching out for suggestions.
Throughout the nine-page document, CNIGA makes it clear that tribes “presume” an IGRA model, which means that tribes own the betting licenses and that operating partners must pay the tribes 60% of revenue (per IGRA). The setup has only been approved in two states — Florida and Wisconsin. In Florida, where online sports betting has been consistently live since November 2023, the only operator is Hard Rock Bet, which is owned by the Seminole Tribe. In Wisconsin, an IGRA model for online sports betting was approved in April, but is not yet live.
The RFI clearly states that CNIGA intends to include in its initiative what’s been called the “magic language” — “the jurisdictional location of the bet shall be defined to be the physical location of the server,” which must be on Indian land. Similar language is in the Seminole-state of Florida compact and ultimately gave the tribe a monopoly on statewide legal sports betting. The more colloquial phrase is that a “bet is considered placed where received.”
Any partnership made under IGRA is required to be approved by the National Indian Gaming Commission.
What are the possibilities?
CNIGA provides three potential scenarios it is considering for online sports betting. None apply to in-person wagering, which any gaming tribe would be able to offer on its own under its compact.
All three potential market structures have a single tribal “consortium” at the top. The entity would be wholly owned and governed by “all California tribes,” and “profit-share-based distributions” would be made to tribes. The potential frameworks:
- Consortium with a single exclusive operator: A single white-label platform — for example, CaliforniaBets.com — that is licensed and operated by a “single tribal nation,” which would be the consortium.
- Consortium with multiple operators — Tribal brands: Multiple platforms would be allowed, but any market entrants would have to be “brands that are owned and operated by tribal nations.” (Examples: [Tribal Name]Wagering.com or [Tribal Name]Bets.com.) Commercial operators or vendors could or would partner with a tribe to provide back-end services, but their brand would not be front facing.
- Consortium with multiple operators — Tribal brands, commercial brands, co-brands: Like the second option, Californians would have access to multiple online sports betting platforms. Commercial operators could negotiate with partner tribes to be the front-facing brand or co-brand. (Think something similar to the Rose Bowl, sponsored by AT&T.)
Other details
The RFI also includes a “basic definitions” section, and it calls for Indian Country to pay the state a revenue share of 10%-25% of net gaming revenue. In addition, tribes would retain ownership of “their own data, even if collected by third parties,” though respondents were invited to explain what data they would need to own and why.
RFI respondents were instructed to offer commercial terms for any of the three scenarios they are willing to consider, including what revenue or profit sharing they are offering and what deductions they would implement (i.e., operations costs as a line item that might be deducted from revenue). In the answers, the respondents were asked to include a length of contract, including the minimum term; describe what technology or platforms would be used and if they are in-house or outsourced; what kinds of retail options, including kiosks, are available; and what staffing would look like.
The document also has a relatively sizable section dedicated to responsible gaming. Respondents were asked to outline player protection tools, problem gambling “detection” programs and ways to “intervene” should a player be deemed at-risk, self-exclusion options, affordability checks, and more. They were instructed to describe how responsible gaming tools work with state and national resources, marketing and advertising restrictions, and what “problem gambling research, prevention, and treatment programs in California” that they would be willing to contribute to.
Getting an online sports betting initiative onto the ballot and eventually up and running is costly. To that end, CNIGA asked operators and vendors to indicate their willingness to contribute to ballot initiative costs as well as what they would be willing to pay for licensing or contract fees and marketing in Year 1-Year 5.
