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Local tribes on opposing sides in fight over sports betting

Graton Rancheria is one of Prop 26’s big sponsors, while Middletown and Big Valley rancherias have broken away to support Prop 27.|

California’s sports wagering initiatives

PROPOSITION 26

What it would do: Legalize sports betting at American Indian casinos and licensed racetracks, tax 10% of profits, legalize roulette and dice games at casinos.

Who supports it: At least 28 California tribes. Top donors are five profitable tribes, including Federated Indians of Graton Rancheria.

How much has this side spent: $114 million

PROPOSITION 27

What it would do: Authorize online sports betting platforms to partner with gaming tribes to offer that type of wagering in California. Also tax revenue at 10%, along with large licensing fees.

Who supports it: Online betting companies like DraftKings and FanDuel, plus card rooms.

How much has this side spent: $142 million

Jose “Moke” Simon’s beard is more salt than pepper these days, but Simon, chairperson of the Middletown Rancheria of Pomo Indians since 1997, still cuts an imposing figure.

On Wednesday, the former college football lineman looked resolute as he sat before a microphone in a joint gathering of the California State Senate and Assembly organization committees in Sacramento.

The purpose of the hearing was to present information on state ballot propositions 26 and 27, competing initiatives that would legalize sports wagering in California, in different ways, if passed in November.

Around half of California’s 109 federally recognized tribes support Proposition 26, which would legalize sports betting, but only in Indian casinos and a handful of year-round horse racing tracks.

But Simon spoke in favor of the competing measure, Prop 27, which would pave the way for virtually unlimited online sports wagering in this state.

Simon’s stance puts him in stark opposition to his fellow tribes, though he downplayed it Wednesday.

“I heard that today: ‘division.’ There is no division,” Simon told the senators and assembly members. “This is just an opportunity for one tribe to make a decision — a sovereign decision — on how they’re going to move their people forward. … You know, it’s not always easy to do the right thing for your people. But when your people ask you to act, then you go to war, or you give your life if that’s what is needed.”

Watching recent advertisements on either side of the issue, the word “division” seems accurate.

“Who’s attacking Prop 27? Wealthy casino tribes who want all the money for themselves,” a narrator says in a Yes on 27 commercial released in early August.

Within hours of that salvo, the powerful tribes that form the backbone of No on 27 — including the Federated Indians of Graton Rancheria, who own the resort and casino in Rohnert Park — were calling the ad “shameful and despicable.”

The rancor goes well beyond words. The competing campaigns together raised more than $255 million as of June 30, according to Ballotpedia, a nonprofit, nonpartisan online “political encyclopedia.” That makes sports wagering the most expensive ballot issue in California history, eclipsing the nearly $225 million raised in the fight over Prop 22, which passed in 2020 and exempted app-based ride companies like Uber and Lyft from providing drivers with employee benefits.

The Prop 27 campaign is funded largely by online gambling companies like DraftKings, FanDuel and BetMGM, which would be allowed to sign an agreement with a recognized tribe to offer those services in California, an arrangement used in other states, like Washington. The gaming companies are aligned with the state’s 83 card rooms, which are unaffiliated with tribal casinos and would be iced out of the Prop 26 framework.

It isn’t hard to understand why the spending has spiraled. The financial stakes are huge.

Bettors wagered more than $143 billion on sports in the 25 states, plus the District of Columbia, where that wagering was legal in 2021, according to the website sportshandle.com.

“There’s so much as stake,” said State Sen. Bill Dodd, a Democrat based in Napa and chairperson of the Senate Governmental Organization Committee.

Dodd proposed legislation in 2020 that would legalize sports wagering in California. He ultimately removed it from consideration, partly in response to resistance from gaming tribes, but said he considers it superior to either of this year’s propositions.

The profits from sports wagering are potentially huge, and a percentage of that money would pour into state coffers.

California state revenues could reach “the tens of millions of dollars annually” if Prop 26, the casino sports wagering measure, passes, Anita Lee, principal fiscal and policy analyst for the Legislative Analyst’s Office, told the joint committee Wednesday.

Prop 27, the online measure, would bring in “possibly in the hundreds of millions of dollars,” Lee said. It would also require tribes to pay a $10 million fee for a five-year license, then another $1 million each time it’s renewed. A licensed company such as FanDuel would have to fork over $100 million when approved and $10 million for each renewal.

“In my proposal, we knew the tax revenue would have meant close the three-quarters of a billion dollars for the state,” Dodd said in a phone interview.

The public beneficiaries are worthy causes. The fund established by Prop 26 would target K-12 educational funding. Prop 27’s fund would focus on gambling addiction and homelessness.

Dodd is not officially endorsing either proposition. But he makes no secret of his support for legalized sports betting.

“Literally hundreds of thousands of people are betting online, in this state, in the shadows,” Dodd said. “I think it’s appropriate to bring that out of the shadows, regulate it, tax it. It’s a safe place to do the betting. There’s help for those who can’t handle it well. And at the same time, the people of the state of California get tax revenue from it.”

Clearly, this is also an important issue for California tribes, which have generally suffered from high rates of poverty since being forced off of their native lands in the late 19th and early 20th centuries.

It’s no shock the majority of those Native American groups have sided with Prop 26, which would give them a bigger slice of the state’s gambling pie.

More surprising were the decisions of three smaller tribes to break away and endorse Prop 27. Two of them — Middletown Rancheria and the Big Valley Rancheria of Pomo Indians — are in Lake County. The third is the Tachi Yokut Tribe, based on the Santa Rosa Rancheria in Lemoore.

Analysts say the in-person wagering of Prop 26 is likely to favor larger tribes with high-revenue casinos, while the three breakaway tribes could have an inside track to signing contracts with the national online gambling companies.

Neither Moke Simon nor Big Valley chair Phillip Gomez returned phone calls from The Press Democrat.

In fact, of the 10 North Bay gaming-pact tribes surveyed for this story, only two replied on the record. One, the Koi Nation, which has begun the arduous process of getting a casino built in the Shiloh neighborhood near Windsor, declined to comment, saying its sole focus was bringing that land into federal trust.

The only local tribe to speak to propositions 26 and 27 was the Federated Indians of Graton Rancheria, whose members have emerged as a leading voice in the Yes on 26 campaign, along with the Pechanga Band of Luiseño Mission Indians (Riverside County) and Yocha Dehe Wintun Nation (Yolo).

Graton Rancheria chair Greg Sarris framed his support as a moral issue, raising the notion that online gambling platforms can’t effectively prevent people younger than 21 from wagering.

“Prop. 26 will guarantee that children do not have access to gambling by limiting sports betting to Indian casinos and racetracks,” Graton wrote in a statement. “Prop. 26 will raise money for tribes that don’t have gaming and for tribes with smaller casinos. Prop. 26 will protect Indian Nation sovereignty.”

Sarris sounded disdainful of Prop 27, calling it “a threat to online gaming.”

“Prop. 27 pretends to help tribes by requiring businesses to partner with a tribe to offer sports betting, but this means a handful of tribes will be used by big companies (i.e., MGM, Draft Kings), while keeping customers of Indian casinos away by offering betting wherever the customer happens to be,” he wrote. “The funding promised by this proposition for homelessness and mental health will be a drop in the bucket, while the harm to Indian tribes will be immense.”

As of yet, there has been no open hostility among tribes on opposite sides of the sports-wagering rift. But Simon, who is also a Lake County supervisor, has certainly placed himself in an awkward position by breaking ranks.

He suggested to the state legislature that his small, marginalized tribe, which numbers about 250 members and resides on 80 acres of waterless land, simply doesn’t have many options for financial viability beyond the gambling industry. And that the future of that industry is on the computer.

“Being separated from your land is the most horrible thing you can do to an Indian person,” Simon told the committee this week. “And we were all separated here in California from our ancestral lands. And now it’s our opportunity as leaders to look at ways we can build our economies — not only strengthen for our economies’ sake, but also to look at purchasing back our land, to build housing, tribal programs. … This is just one more step in that growth.”

After Simon’s 10 minutes, representatives from eight different tribes and two Native American alliances approached the microphone to count themselves in opposition to Prop 27. None stood to offer Simon support.

You can reach Phil Barber at 707-521-5263 or phil.barber@pressdemocrat.com. On Twitter @Skinny_Post.

California’s sports wagering initiatives

PROPOSITION 26

What it would do: Legalize sports betting at American Indian casinos and licensed racetracks, tax 10% of profits, legalize roulette and dice games at casinos.

Who supports it: At least 28 California tribes. Top donors are five profitable tribes, including Federated Indians of Graton Rancheria.

How much has this side spent: $114 million

PROPOSITION 27

What it would do: Authorize online sports betting platforms to partner with gaming tribes to offer that type of wagering in California. Also tax revenue at 10%, along with large licensing fees.

Who supports it: Online betting companies like DraftKings and FanDuel, plus card rooms.

How much has this side spent: $142 million

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