Sen. Bill Dodd drops bill to legalize sports gambling

State Sen. Bill Dodd announced Monday that he was dropping a bill he co-sponsored that sought to legalize sports betting in California, suspending efforts to open up a potentially lucrative gambling market worth an estimated $500 million annually for the state treasury.

The bill was supported by all the major sports leagues. But California’s powerful tribal casinos stood in staunch opposition, along with other allied gaming venues and some law enforcement agencies and cities, among them the Sonoma County Sheriff’s Office and city of Rohnert Park.

Dodd’s move came on the eve of a closely watched vote Tuesday on the proposed constitutional amendment by the Senate Appropriations Committee.

“When it comes to gaming in the state of California, there are so many different interests,” Dodd, D-Napa, said Monday. “Probably well over 100 different small tribes, large tribes, big horseracing venues, small horseracing venues, big card clubs, small card clubs. Trying to balance all the needs, it just became clear to me more work is needed to get it right.”

The bill would have had to pass through the state Legislature with two-thirds approval by June 25 to make the Nov. 3 ballot.

Dodd said he and co-sponsor Assemblyman Adam Gray, D-Merced, will now figure out whether to reintroduce the bill this summer, or return with a different bill. Either would aim at the 2022 election, rather than this November’s.

“It’s too early, too fresh,” Dodd said. “We were still trying to make the bill work as recently as last weekend.”

Dodd said the proposal had the support of every professional sports league and team in California, and close to all of the state’s cardrooms. But his bill was contentious from the start, primarily because of overwhelming opposition from California’s Indian casinos.

At an Appropriations committee hearing on June 9, two prominent Indian gaming leaders — Edwin Romero, chairman of the Barona Band of Mission Indians, and James Siva, chairman of the California Nations Indian Gaming Association — told legislators that the measure, Senate Constitutional Amendment 6, would devastate tribal economies and provide cover for what they consider to be legally questionable activities by cardrooms, a longtime nemesis of tribal casinos.

Tribes are pushing a narrower legalization of sports betting, pouring $8.5 million into a ballot measure that would limit the activity to their casinos and racetracks.

“While we appreciate that the state was trying to find additional revenues during this time, this bill was simply bad policy,” the California Nations Indian Gaming Association said 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.”

The tribal gaming industry carries huge clout in California. That was evident even at a June 16 special meeting of the Rohnert Park City Council, conducted via video. The final order of business that night involved a request by the Graton Rancheria, which asked the council to voice opposition to SCA 6 in a letter to the Senate Appropriations Committee. Councilmembers voted 5-0 to approve the letter, signed by Mayor Joe Callinan.

The Federated Indians of Graton Rancheria own the Bay Area’s largest casino just outside Rohnert Park, and the tribe was part of the coalition opposing the legislation.

“I don’t think it’s right that little kids can have a chance to bet online,” Callinan said Monday. “I have 14 grandkids. Online gaming concerns me.”

Dodd, responding generally to that line of argument, said, “That is so ridiculous. I am positive that Chairman (of the Federated Indians of Graton Rancheria Greg) Sarris has everything he needs to make sure that underage gamblers do not come to Graton Casino. I have the same confidence technology exists to make sure online gamers are not underage. And today, there are no safeguards against underage online gamblers.”

Representatives of Graton Resort & Casino did not respond Monday to requests for comment. The Graton tribe has paid out more than $60 million to Rohnert Park, plus more than $10 million in donations to local nonprofits and to support open space protection.

Callinan added that though the Graton casino wasn’t obligated to pay anything to the city while it was shut down for weeks by the coronavirus, Sarris agreed to keep that revenue stream flowing. “That’s why I introduced the letter of support, and I stand behind that move,” Callinan said.

But Dodd insists SCA 6 would bring sports gambling out of the shadows while infusing vital tax revenues into state coffers. He said previously he expected SCA 6 to generate $500-$700 million annually for California in gambling taxes and licensing fees, once the market “matured.” New Jersey, one of 20 states to have legalized sports wagering thus far, made $279.2 million in tax revenue from the industry in 2019, and California has almost 4½ times its population.

SCA 6 would allow tribal casinos to open their own sports books to collect bets on NFL games and other forms of pro competition. The crux of the debate over Dodd’s bill concerns online wagering, which the senator said makes up 85% of the overall handle. (SCA 6 would place a 10% tax on bets placed in person and a 15% tax on online bets.) The tribes believe that shift will gut their gambling revenue.

For that reason, a coalition of Indian casinos are attempting to place a competing sports betting bill on the ballot this year. That effort also appears to be in jeopardy. The tribes say the stay-at-home orders have made it difficult to collect the necessary signatures in time for November.

An amendment to SCA 6 in late May attempted to strike a compromise. It gave tribes the ability to offer craps and roulette at their casinos, and tightened up the rules for cardrooms. But it left the online provision in place. Ultimately, that made it hard for Dodd and Gray to find a path forward in 2020.

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