Unregulated social gaming sweepstakes companies are operating unfettered in California, and that has caused an uproar with US online gambling operators and the state’s tribal gaming nations.
United Front
Former adversaries are now crafting a united front against unregulated sweepstakes companies operating in California’s digital space. The social gaming sites allow people to use their product for free but subsequently permit them to purchase tokens that can then be exchanged for cash. Two of the primary culprits are reported to be High 5 Casino and Fliff.
Victor Rocha, Conference Chair at the National Indian Gaming Association, recently hosted a webcast and invited one of his former foes on the panel.
Jeremy Kudon, President of the Sports Betting Alliance, a coalition of legal sports betting platforms, said, “These sweepstakes sites are taking billions of dollars in revenue. I think it’s supposed to be right now $2 billion in revenue for these sweepstakes’ sites. And they’re predicting they’re going to get up to $4 billion by the end of 2025. That’s money that could be going to the states. That’s money that could be going to the tribes.”
As to if and when the two former rivals will combine to bring sports betting to California, Kudon said that the time and place would be determined by the tribes.
“When you guys are ready to do it, we’re going to be there to help you in any way, shape, or form that you think is best. I think there’s a great future there,” Kudon said.
Both the gaming tribes and national sports betting operators are calling for state intervention to shut down the sweepstakes sites in anticipation of regulated sports betting at some point in the future.
Foes Become Friends
Business and politics can make strange bedfellows, as the old aphorism goes. And that case can certainly be made when it comes to former rivals in California’s sports betting wars of only a few years ago. Industry powerhouses FanDuel and DraftKings attempted to sway Golden State voters with a blizzard of advertising to approve mobile sports betting at the ballot boxes while the tribal nations spent hundreds of millions to gain retail exclusivity with their own referendum question.
In the end, Proposition 26, backed by the tribes that would have allowed retail sports betting, and Proposition 27, which would have permitted mobile sports betting and were supported by the gaming companies, were both voted down. North of $450 million was spent on the ballot initiatives, and it was a clear sign to the FanDuels and DraftKings of the world that sports betting in California would not manifest without working with the tribes.
Since that time, the national sports betting operators have struck a conciliatory tone, and that has brought them into the good graces of the gaming tribes. Although no deal has been struck, it appears the tribes are willing to work with the national sports betting platforms in a limited way that would pave the way for retail and the much more lucrative mobile sports betting sites in the Golden State.
FanDuel CEO Amy Howe has been public about her company’s many missteps and failure to respect the tribe’s sovereignty and their domain over gaming in California. She said her company’s efforts were “well-intended but misguided and ill-informed.”
FanDuel has subsequently hired several tribal gaming officials to work toward fostering a cooperative effort in bringing sports betting to California.
James Siva, chairman of the California Nations Indian Gaming Association (CNIGA), said, “Expansion of gaming is going to happen. It’s a matter of when, not if. But when that does happen, tribes are going to remain in control. We will partner with companies; we will utilize products. But tribes are the operators in California, period. That’s it.”
