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California cardrooms file lawsuit against tribal sports betting initiative


Two cardrooms, Hollywood Park Casino and Cal-Pac Rancho Cordova, have filed a lawsuit challenging an initiative that would legalize sports betting in California and allow tribal owned casinos to sue cardrooms.

The suit was filed at the Los Angeles Superior Court.

It aims to halt the California Sports Wagering Regulation and Unlawful Gambling Enforcement Act, which could appear on the November ballot. A referendum on sports betting legalization in California will take place in November if enough signatures are gathered in support of the ballot.

The measure would also give exclusive rights to tribal casinos to offer roulette and dice games such as craps, while California cardrooms will not be allowed to offer these games. Tribal casinos and cardrooms have long been embroiled in disputes over the legitimacy of cardrooms offering casino games.

The suit claims that the measure violates California’s constitutional law regarding ballot initiatives, which states that each initiative can only contain one subject.

If passed, the initiative will allow tribal casinos to file suits against any cardroom competitors in California.

California has 85 cardrooms, and the suit noted that these pay close to $500m in local taxes per year.

The ballot initiative is backed by nine tribes, including the San Manuel Band of Mission Indians, the Sycuan Bank of the Kumeyaay Nation and the Yocha Dehe Wintun Nation. Funding to back the initiative has reached $12.5m.

“What this sports-wagering ballot initiative really does is to surreptitiously destroy competition with California’s cardrooms by granting more rights to Tribal casinos, including the right to file a stream of lawsuits against card rooms,” said Deven Kumar, general manager of Hollywood Park.

“This is not what the initiative process was designed to do, and certainly not what this initiative is advertised to do.”

Other initiatives are also being proposed in California, that suggest a variety of sports betting rates and regulations. The Age-Verified Tribal Online and In-Person Sports Wagering & Homelessness Solutions Act, which was introduced by four tribal operators, proposes that tribes contribute 10% of its adjusted sports wagering gross gaming revenue to the California Homelessness and Mental Fund.

Another proposal, supported by seven sports betting operators, was filed in September 2021. It proposes that tribal operators offer sports betting in conjunction with commercial partners.

A third proposal has also been suggested by three cities that have cardrooms- Colma, Gardena and San Jose. It is currently looking for signatures.

Last month the Berkley Institute of Governmental Studies released results of a survey that indicated that voters in California have “some” support for sports betting in the state, but concluded that this was “not overwhelming”.