With the introduction of a constitutional amendment to allow sports wagering legislation in California, some California tribal representatives have asserted that doing so would violate their tribal-state gambling compacts: even threatening to withhold compact mandated payments to California if sports wagering is adopted. But this argument is not credible.1
First, the California Constitution authorizes compacts with tribes to operate slot machines, lottery games, and banked and percentage card games.2 The Constitution does not provide a tribal monopoly on all forms of wagering against the house, and sports wagering is not a card game, lottery or slot machine. There also is more than one form of sports wagering: exchange wagering matches buyers and sellers like a stock exchange usually without the exchange participating in the wagers. Consequently the State is free to amend the Constitution to authorize sports wagering.3
Second, given the California Constitution’s authorization for “banked” “card games,” it is unlikely that any compacts provide more broadly for exclusivity over all forms of “banked wagering.” Notably, none of the tribal proponents or unnamed tribal lawyers cite any specific compact or compact language to evidence their argument, and that burden should be theirs. Typical compact language is limited to slot machines, lottery games and banked and percentage card games, consistent with the Constitution’s limits on what can be included in a compact. The compacts specifically exclude any other form of Class III gaming.4
So the compacts do not authorize the tribes to conduct sports wagering let alone provide the tribes any exclusive right over sports wagering.
Public discussion would be helped if the tribal advocates would cite a specific compact and provision that provides substantiation for their argument. But given the California Constitution’s language that may not be possible, in which case the implausible arguments should stop. Plainly the compacts would have to be renegotiated to include sports wagering or the tribes would need state licenses if the tribes want to participate, but that is not an impediment to legalizing sports wagering in California. The State would also need to adopt sports wagering legislation, which could protect tribes from re-opening other issues in their existing compacts.
1 “Not So Fast On Sports Betting: Legislation Will Need Approval Of Tribes In Many States” July 31, 2017 https://www.legalsportsreport.com/14809/sports-betting-legislation-tribes-states/
2 California Constitution, Article IV, Section 19(f): “Notwithstanding subdivisions (a) and (e), and any other provision of state law, the Governor is authorized to negotiate and conclude compacts, subject to ratification by the Legislature, for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. Accordingly, slot machines, lottery games, and banking and percentage card games are hereby permitted to be conducted and operated on tribal lands subject to those compacts.” (emphasis added)
3 The tribes’ right to conduct lottery games is not exclusive: a different amendment authorized a state lottery. The State also could amend the Constitution to authorize other persons to offer slot machines or the same banked or percentage card games, even if various tribal payments to the State may be impacted. Section 19(f) of Article IV of the Constitution simply authorizes tribal compacts that include these games and gaming devices, but it does not refer to any exclusivity.
4 For example, the United Auburn Compact dated August 14, 2015:
4.1 (d) Nothing herein shall be construed to authorize or permit the operation of any Class III Gaming, including but not limited to banking and percentage games prohibited by state law, that is not authorized or permitted under, or otherwise exceeds the authority granted by, article IV, section 19, subdivision (f), of the California Constitution.
See also for example the recently completed Agua Caliente Amended Compact dated August 4, 2016:
Sec. 2.9. “Gaming Activity” or “Gaming Activities” means the Class III Gaming activities authorized under this Compact.
Sec. 2.10. “Gaming Device” means any slot machine within the meaning of article IV, section 19, subdivision (f) of the California Constitution. …
Sec. 3.1. Authorized Class III Gaming.
(a) The Tribe is hereby authorized and permitted to operate only the following Gaming Activities under the terms and conditions set forth in the Compact:
(1) Gaming Devices.
(2) Any banking or percentage card games.
(3) Any devices or games that are authorized under state law to the California State Lottery, provided that the Tribe will not offer such games through use of the Internet unless others in the state are permitted to do so under state and federal law.
(4) Off-track wagering on horse races pursuant to the requirements in the document attached hereto as Appendix D. …
(d) The Tribe shall not engage in Class III Gaming that is not expressly authorized in this section 3.0 of this Compact.
This article was originally published at www.calgaminglaw.com.
About the author
David M. Fried graduated from the law school at the University of California at Berkeley in 1988. Following law school he clerked for two years for the Honorable Gerald W. Heaney of the United States Court of Appeals for the Eighth Circuit, which decides legal questions emanating from the federal courts. He practiced business litigation with a San Francisco firm before starting his own practice in 1996. He returned to U.C. Berkeley in 2011 to study finance, economics, accounting and marketing.
David has represented gaming suppliers and operators since 1994. He has obtained gambling licenses in more than 15 jurisdictions. He drafted the 2009 revision to the California Gambling Control Act and has been actively involved in legislation and local ballot campaigns involving gaming issues. He also has advocated for gaming companies in licensing and regulatory hearings before the California Gambling Control Commission and the California Bureau of Gambling Control.
David is a member of the International Masters of Gaming Law, past President of the Barristers Club of The Bar Association of San Francisco and the recipient of the Bar Association’s Barrister of the Year Award. This post is from his blog at www.calgaminglaw.com. David is also found on Twitter at @calgaminglaw.