California Sports Betting Bill Withdrawn Following Tribal Lawsuit, Legislative Impasses

It’ll be at least 2022 before California residents can vote on sports betting. On Monday, June 22, State Senator Bill Dodd announced he was pulling his bill, SCA 6, due to opposition from more than 25 tribes. 

Earlier this month, everyone appeared to be on the same page. The California Senate Committee on Government Organization approved SCA 6 on June 3. FanDuel and DraftKings came out in support. Lawmakers from both parties also praised the idea. But then conversations started about the content of the bill. Some venues would be allowed to offer sports betting on site and some wouldn’t.

At a time when the state is still dealing with the impact of COVID-19, that ignited conflict. And as the discussions got deeper into details, the anger kept rising. Then the native tribes filed a lawsuit, adding to the issues. As a result, lawmakers used a rule dating back to the 1980s to put things on hold: they placed the bill in the suspense file. 

What is The Suspense File? 

It sounds like something made for television. The suspense file was created in the 1980s to help California balance its budget. Once a bill’s cost reaches a certain point, politicians can flag it and ask that it be examined.  “Generally, if the cost of a bill is determined to be $50,000 or more to the General Fund or $150,000 or more to a special fund, the bill meets the criteria for referral,” the California Senate states on its website

The idea is to go through a series of hearings, determine where the money will come from and then hold a vote. At that point, the bill either goes to the Senate floor to be considered or it stays in committee. There’s no public testimony, nothing allowed at that final point except either a vote to move forward or a vote for it to remain. If it remains, a bill is basically dead, as it wouldn’t be re-examined until the next year. Due to the arguments surrounding the bill and a promise we’ll touch on, SCA 6 went to the suspense file on June 9.

A fiscal note said the reason was it would cost the state between $438,000 and $584,000 in printing costs to put it on the ballot. Before Dodd withdrew the bill on Monday, the plan had been to bring it up for a vote this week. Now the earliest it can be brought back is next year for the 2022 ballot. 

A Lawsuit Puts Things On Hold

But if everyone agrees that it’s needed, why did the bill get put on hold? The main reason involves a lawsuit. Currently, tribal casinos in California have exclusive rights to offer house-backed games like blackjack. Under SCA 6, non-tribal casinos in the state would have been given the same rights. As a tradeoff, the tribes would have been allowed to add roulette and craps. All groups were on board with that part of the deal. The problem came due to COVID-19. As part of the deal, tribes would be allowed to offer sports betting, but only if it got approved by vote.

In order to get on the 2022 state ballot, the tribes needed 997,139 signatures before July 20 of this year. They started collecting signatures in January, but stopped in March due to the pandemic. Concerned they wouldn’t get enough signatures by the deadline, tribal leaders filed a lawsuit June 9 to get a 90-day extension.  

In order to get SCA 6 out of committee, the bill needed nine votes. SCA 6 was stuck at 8-3 until State Sen. Steve Glazer agreed to vote yes, making it 9-3. But Glazer’s vote came with a price. In the meeting, he brought up the need to protect tribal casinos, which are in his district. He would only vote yes, Glazer said, if the members promised the bill wouldn’t go to the Senate floor without his approval. Due to the lawsuit, that approval wasn’t coming anytime soon and so Dodd went ahead and pulled the bill. 

Other Issues Rise Up 

But there was more blocking the bill than a single lawsuit. There was also a question of the money involved and where it was going. Senators representing rural areas had a unique request. They wanted sports betting allowed at county fairs with a temporary permit. This could include anything from betting on demolition derbies to picking a winner in any number of animal races.

A number of proposals called for fairs to apply for a one-time permit each year, valid only during the week it’s in operation. Those rural votes were needed to bring SCA 6 out of suspense. The only problem is with just a few days left in the session, there was no agreement on the county fair question.  

The final hurdle for sports betting in California dealt with money. The last proposal called for 1 percent of gross gaming revenues to go to gambling addiction programs, with a cap of $10 million. With estimates projecting sports betting would bring in $700 million when the market matures, some senators wanted the $10 million cap lifted. But again, there was no consensus with a looming deadline. With no answers to these questions and little time left in session, Dodd went ahead and pulled the plug.

About the Author

Brian Carlton

Brian Carlton is an award-winning journalist who has covered casinos, the gaming and finance industries for more than a decade. His work has been published by the BBC and a variety of newspapers across the U.S.