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Who’s the mystery player behind new bid to legalize sports betting in California?

California voters last year dealt a crushing bust to a pair of competing ballot initiatives to legalize sports wagering, but the Golden State is too big of a prize for gaming interests to just fold and walk away. Now, a mystery player has anted up for another round at the ballot box.

Proponents have filed with the state Attorney General’s Office to launch a pair of proposed measures for the November 2024 ballot that would allow on-site and online sports betting in California through the state’s recognized Indian tribes. But California’s gaming tribes aren’t on board, and it’s unclear who’s bankrolling the effort.

“That seems to be the million dollar question: Who are these people?” said Robert Linnehan, regulatory writer and editor at XLMedia, which specializes in online gambling and sports betting. “Why did they take it upon themselves to submit two ballot measures on behalf of the tribes who say they want nothing to do with this?”

Turns out the why is a bit easier to answer, industry experts say.

“The why is just a constant — (it’s) the potential that the California market has for sports wagering,” said analyst Geoff Zochodne at the sports betting information hub Covers. “It’s the biggest of the crown jewels for that type of betting. So while it seems crazy to try again to unlock the market after such a resounding defeat, the upside is just so significant that maybe people can’t help themselves.”

And if anyone has the wherewithal to bankroll an expensive initiative effort in California, it’s the gaming industry, which pumped a record of more than $360 million into last year’s competing propositions 26 and 27. Voters in November 2022 rejected Prop 26 to allow sports betting at California’s American Indian gaming casinos and licensed racetracks 2 to 1. They panned Prop 27 to allow online sports betting four to one.

Documents filed late last week with the Attorney General’s Office for the proposed “Tribal Gaming Protection Act” and “Sports Wagering Regulation and Tribal Gaming Protection Act” were signed by Ryan Tyler Walz and listed online entrepreneur Reeve Collins as the principal contact. Walz didn’t answer a listed phone.

It was unclear to experts why proponents filed two separate initiatives rather than bundling them into one. Zochodne said both authorize sports betting only through the tribes, but one also includes a proposed framework.

Collins didn’t respond to the messages to his listed Los Angeles area phone and email. His phone voicemail says “these acts are designed to protect California tribes and California taxpayers who are seeing their dollars go to offshore unregulated gaming sites. There will be a lot more information coming out soon and we’re really looking forward to the process.”

Collins’ LinkedIn account says he had raised $70 million to launch “a legal, real-money gambling site based in the U.S. called Pala Interactive,” and industry reports and sources indicate Walz was involved with him in that. Pala is an American Indian reservation in San Diego County. But a spokesman for the Pala Band of Mission Indians said it “is not involved in either of the initiatives that were filed with the attorney general.”

Nevada casino giant Boyd Gaming Corp., a 5% equity owner of FanDuel Group, the nation’s leading sports-betting operator, bought Pala Interactive in November 2022 for $172 million. But Boyd spokesman David Strow said the family-owned company isn’t behind the recent California initiative filings or affiliated in any way with Walz and Collins.

Whoever is behind the initiative effort notably didn’t include the California Nations Indian Gaming Association, which represents 52 federally recognized tribal governments and associate members dedicated to the tribal gaming industry.

The group said in a news statement, the day the proposed initiatives were submitted, that it “is deeply disappointed that the sponsors of the two recently filed initiatives did not first reach out to the State’s largest tribal gaming association for consultation and input.”

“While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate,” said the statement from the Indian Gaming Association, which said it would have no further comment.

In social media posts, Victor Rocha, of the Pechanga Band of Indians, conference chairman of the Indian Gaming Association, called the initiative’s proponents “morons,” “fools” and “idiots” who had “sent a letter to California tribal leaders asking them not to talk to the press until they had a chance to talk to leadership.”

Rocha posted Tuesday that he was “still digging around” to learn more about the proponents and their backers and in an earlier post said “this thing is so dead.”

Most California Indian tribes backed last year’s Prop 26, including the California Nations Indian Gaming Association and the Pechanga and Pala bands. Several tribes and the American Indian Chamber of Commerce of California lined up against Prop 27, but it drew support from some others.

Filing for an initiative costs $2,000 and sets in motion a request to the Attorney General’s Office to issue a ballot title and summary. After a 30-day public comment period and financial impact review, the attorney general notifies the secretary of state that proponents may circulate petitions to qualify the proposed initiative.

Then it gets expensive. Because both proposed measures would amend the state constitution, proponents must submit at least 874,641 valid voter signatures, representing 8% of the votes cast in the last election for governor, to qualify each for the ballot. Proponents have 180 days from the official summary date to collect signatures. If they meet the threshold, the initiative would appear on the next statewide special or general election ballot 131 days after it qualifies.

Linnehan said 35 states plus the District of Columbia have some form of legalized sports betting, and 25 states allow online sports wagering. Three others — North Carolina, Vermont and Maine — have legalized but not yet launched online sports betting. But he said California would be the largest sports betting market in America.

“The state will likely legalize sports betting at some point,” Linnehan said. “How that happens is the million-dollar question.”

Source: Orange County Register

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