California Tribal Leaders Challenge Daily Fantasy Sports and Sweepstakes Operations
As California continues to grapple with the evolving landscape of gaming, tribal leaders are raising significant concerns about the increasing presence of daily fantasy sports (DFS) and sweepstakes companies in the state. In a recent podcast episode, key figures from the California Nations Indian Gaming Association (CNIGA) emphasized that these operations may be infringing upon tribal gaming exclusivity—a cornerstone of the state’s gaming landscape.
A Call to Action
Victor Rocha, the conference chairman of the Indian Gaming Association, and Jason Giles, the executive director, hosted James Siva, the chairman of CNIGA, to discuss the growing pressures from DFS and sweepstakes companies. Rocha sounded the alarm, stating, “When we’re talking about cannibalization, this is what we’re talking about. They’re taking money out of California. It’s unregulated and it’s untaxed.” This raises crucial questions about both the legality and ethical implications of these gaming formats.
The Threat to Tribal Exclusivity
The discussion on the podcast marked the first of several planned episodes addressing this pressing concern within California. Rocha characterized the operation of DFS and sweepstakes as existing in a legal gray area, with these companies failing to contribute financially to the state’s gaming system. The involvement of these firms appears to defy the established tribal gaming exclusivity, a principle based on both the California constitution and federal law.
California Attorney General Rob Bonta is currently reviewing the legality of DFS, following a request from Senator Scott Wilk. However, Siva, a leading voice in the tribal gaming community, made it clear that he believes DFS is unequivocally illegal in California. “The fact is, according to the California constitution, DFS is illegal in every way,” he asserted, underscoring the tribes’ concerns with these operations.
Sovereignty at Stake
For Siva and the CNIGA, the presence of DFS and sweepstakes companies threatens to undermine tribal sovereignty, as these entities operate without entering into any agreements or partnerships with local tribes. According to Siva, there is a troubling tendency among external gaming operators to disregard tribal gaming laws and sovereignty. “They’re trying to find their way around it, flat out ignore it, and I’m sure they’d like it to go away. They know what they’re doing; they just don’t care,” he stated emphatically.
The CNIGA has taken proactive steps to assert its position on the legality of these games. Siva confirmed that correspondence has been sent to the Attorney General’s office and to major technology companies like Google and Apple, notifying them about the illegal nature of the sweepstakes apps available in their stores.
The Future of Gaming in California
While the possibility of regulated sweepstakes and DFS operations does exist, it hinges on collaboration with California tribes. Rocha pointed out that any future handheld gaming services aspiring to offer their products in the state must obtain consent and form partnerships with tribal entities. As of now, no such arrangements have been finalized. He emphasized that “if tribes are not ready to get involved in their type of gaming, they’ll have to wait on the sidelines until they are.”
Legal Ambiguities Surrounding Sweepstakes
Sweepstakes companies have faced regulatory scrutiny in various states. In recent months, several jurisdictions have issued cease-and-desist orders, including Michigan and Connecticut, reflecting the ongoing regulatory challenges they encounter. It’s noteworthy that VGW, a prominent player in the sweepstakes market, has acknowledged some of these rulings and agreed to exit specific states but has thus far resisted leaving Delaware.
The methodology employed by these companies often rests on the argument that their games are legal due to the presence of a free-to-play element, allowing customers to engage without a purchase requirement. Nonetheless, skepticism about their legality persists within the tribal gaming community, as they question whether these operations can genuinely function legally given California’s stringent gaming laws and the established framework of tribal exclusive rights.
The Role of Industry Organizations
Recently, a coalition of ten sweepstakes companies formed the Social and Promotional Gaming Association (SPGA), aimed at representing interests and promoting responsible practices within the industry. They advocate for clear regulations but face an uphill battle, especially in states like California where tribal leaders staunchly defend their gaming sovereignty.
As Siva aptly noted, any introduction of new gaming options in California must comply with tribal sovereignty. “Tribes are the operators in California. Any new entry of gaming into California begins and ends with the tribes. That’s it. That’s the reality of gaming in California,” he stated, emphasizing the unwavering position of California tribes on the matter.
Conclusion
The discussion surrounding the legality and operations of daily fantasy sports and sweepstakes games in California reveals a complex battleground of interests. With tribal sovereignty, legality, and the future of gaming all in question, California stands at a pivotal crossroads. The voices of tribal leaders serve as a reminder of the critical role they play in shaping the future of gaming in the state, reinforcing the principle that any development within this sphere must respect and adhere to tribal rights. As both state and tribal entities navigate this evolving landscape, the outcome will likely have lasting implications for the gaming industry in California.
