Eagle 1 Acquisitions Corp. LLC has nothing to do with the NFL team. Two of the principals in the organization, Kasey Thompson and Reeve Collins, are behind the effort to put legal sports betting on the ballot in 2024. The original submission of the Sports Wagering Regulation and Tribal Gaming Protection Act to the state’s Attorney General Rob Bonta fell like a dead weight for tribes.
In response to feedback from tribes and other opponents, Eagle 1 amended their submission to make it more engaging to the tribes, operators and others. The changes did nothing to garner support from members of the California Nations Indian Gaming Association.
Victor Rocha, a member of the Pechanga Band of Indians in southern California and conference chairman of the Indian Gaming Association, said support is not backed by voters based on polling. He doesn’t think it will make the ballot.
“These guys only hear what they want to hear,” Rocha said, as reported by CDC Gaming Reports. “They’re looking to divide the tribes and give more money to the non-gaming tribes and parade them in front of the camera and say, ‘Look how we’re helping these poor Indians.’ We’ve seen that before, and it doesn’t work.”
The only question is when it will fail, Rocha said,
In a news release, the group said their initiatives will regulate the unregulated gaming market, put 100 percent control of online and in-person California sports betting in the hands of tribes, and “provide a fair and competitive sports betting environment for Californians.”
The state has the potential to be the largest legalized sports betting market in the country with an estimated $60 billion in wagers and revenue of $3 billion annually, the group said.
“We took a proposal that had the support of more than 70 tribes and was one of the most tribal-focused propositions ever, made amendments based on feedback, and updated it for today’s legal landscape,” Thompson said, per CDC. “What we’re trying to do is create something that works for everyone. Tribal support is paramount to the success of this effort, and we will not put it on the ballot without approval from a majority of the tribes.”
Collins said they removed language they were told didn’t work for the tribes and have created something inclusive for everyone: the tribes, land-based casinos, regulators, out-of-state operators and Californians.
“This is a forward-thinking and tribal-centric proposition that finally paves the way for sports betting in California,” Collins said in a statement.
The tribes won’t have to provide any financial backing to support the passage of the proposition with Eagle 1 bearing the cost, including the signature campaign at a cost of approximately $25 million and the public vote campaign, which will cost hundreds of millions of dollars, the group said.
Under the proposal, the group said tribes receiving about $1 million annually under current conditions can receive an estimated 15-20 times more annually under the proposition. An in-person registration for those outside of a 10-mile radius from a casino requirement for online gaming removed after two years.
Thompson amended his organization’s initiative December 4 in hope of getting the support from reluctant tribes.
Changes increased in revenue sharing to limited- and non-gaming tribes while scratching segments larger tribes opposed. Thompson told PlayUSA the final language incorporates changes put forth by tribes, regulators and out-of-state operators.
“This is now the best California sports betting initiative ever because of the way it benefits all tribes,” said Thompson. “I think we’ve got a bill that works for every stakeholder, every out-of-state operator, every land-based casino, and a majority of the tribes right now.”
The original submission relied on the same language filed by three California Indian tribes in 2021, but with two controversial additions.
The San Manuel Band of Mission Indians, Rincon Band of Luiseno Indians and Wilton Rancheria wrote to the attorney general complaining about the impact on the agenda of offshore online gaming operations to monetize illicit assets.
The latest language removed those claims. Other key changes include:
- Increase the percentage for the Revenue Sharing Trust Fund tribes to 25 percent.
- The allocation of 10 percent for homelessness and mental health was stricken.
- Promotional credits begin at 15 percent and decline to 3 percent until reaching zero.
- Changing the start date for California online sports betting to no earlier than July 1, 2025.
“This is a life-changing amount for many rural California tribes,” Thompson said. “We’re talking about tribal reservations that often face third-world conditions. This initiative gives them a shot to make real money from gaming, potentially 15 times what they are making right now.”
The proponents transfer California operations of a significant portion of offshore online gaming away from operators.
The language proposed to go in front of voters is the same as many tribes supported previously, with the above changes.
“We’re working with tribal leaders to distribute assets if and when regulated by the stringent California regulatory bodies and IGRA law,” Thompson told PlayUSA. “What will go in front of voters is the option to legalize online sports betting to benefit the state’s Indian tribes.”
Coming procedural steps for the initiative include the state producing a fiscal estimate by December 18 and the attorney general releasing a circulating title and summary by January 2. Once completed, supporters can seek qualifying ballots totaling 874,641 valid signatures.
Thompson reasserted that, if the initiative has enough tribal support to move forward, Eagle 1 will fund the initiative from signature collection through the ballot campaign.
“This will remain a zero-cost initiative to the tribes,” Thompson told PlayUSA. “We will carry the burden of passing this initiative, beginning with the $25 million signature campaign through the ballot campaign, which could cost hundreds of millions.”
In another, but related issue, California produces $200 million in annual daily fantasy sports (DFS) entry fees. The state, which has no legal revenue-producing sports betting, doesn’t get a dime from the daily fantasy sports either. Nor is it regulated.
There is some talk that the state will crack down. The tipping point depends on whether the state sees DFS contests as games of skill as proponents claim or games of chance.
Lawmakers across the country face the same dilemma.
California Attorney General Rob Bonta said his office is analyzing the issue. Bonta did not venture a guess on how long such an investigation would take.
The source behind jumping in for a legal opinion comes from State Senator Scott Wilk, who posed the question in October. Rulings from other attorneys general have done little to clarify the central question.
“Although the participant may utilize their knowledge of a particular sport in choosing their ‘team’ of players, how well those players perform during a game is completely out of the participant’s control. As such, daily fantasy sports appears to be a game of chance not otherwise permitted by the laws of California,” Wilk said, according to Legal Sports Report.
Without regulations, fantasy leaders FanDuel and DraftKings—which rank one and two in sports betting in the U.S.— continue to function as a fantasy sports leader in California. The recent rise of “pick’em” games around the country by PrizePicks and Underdog have added to the confusion. Michigan and New York recently banned “pick’em” games, unless the companies possessed a sports betting license.
The request by Wilk comes at a time when tribal entities voice opinions over sports betting proposals for 2024 after a costly debacle that ended in defeat for each side of the sports betting divide in 2022. “I wanted to see if our new Attorney General has an opinion,” he said.
Wilk told LSR his district has no stake as none of the tribes who fought legalization of sports betting operate in his jurisdiction.
Most of the business for DraftKings and FanDuel emanates from sports betting as does the future source of income.
Through three months of the NFL season, DraftKings fantasy app downloads fell 24 percent year-over-year to 461,000, while FanDuel’s slipped 15 percent, says JMP Securities. Over the same period PrizePicks rose 111 percent and Underdog jumped 178 percent, ranking one and two.
