Odds getting better for legalized sports betting in California

In the clearest sign yet that tensions are thawing on sports gambling in California, leaders of DraftKings and FanDuel spoke at an Indian gaming conference Monday about their desire to partner – not compete – with tribes to bring sports betting to the state.

“There is no other way to do it,” said Jason Robins, CEO and co-founder of DraftKings, reflecting the industry’s hard-earned lessons from the 2022 election.

Robins was joined on stage by Christian Genetski, president of FanDuel, and Victor Rocha, a high-profile leader of California tribes who serves as the conference chair of the annual tradeshow and also founded the tribal gaming news site Pechanga.net. It was a friendly conversation about the intersection of sports betting and tribal operations across the country.

“We want to understand what tribal sovereignty means to the tribes,” Genetski said before a packed crowd at the San Diego Convention Center, the site of this year’s Indian Gaming Tradeshow & Convention.

The panel discussion, titled “The Power of Partnerships: Aligning with Established Gaming Brands,” was promoted as an exploration of “collaborative models that leverage brand recognition, shared resources, and industry expertise to drive growth while preserving tribal sovereignty.” And indeed, Rocha asked Genetski and Robins about their companies’ partnerships with tribes in other states, which gave the executives a chance to expound on their corporate efforts to attend powwows and get to know tribal communities.

“We understand we’re going to be in a relationship for decades” when FanDuel partners with a tribe, Genetski said.

But you could argue the panel really served as a public show of the ongoing reconciliation between the sports betting giants and California’s gaming tribes, a development that could ultimately unlock access to the state’s highly valuable sports betting market, which at the moment remains legally off limits.

“California is the one [state] that can have the biggest impact on our growth long term,” Robins said.

California’s sports gaming market is universally regarded as a gold mine, with annual revenues conservatively projected at $3 billion if it can ever be legalized in the state. Even after the state’s bruising ballot box battle over sports gaming in 2022, the global gaming industry has long understood that sports gaming would eventually be legalized in California simply because the potential profits are too great.

But first, the two factions in that bitter fight, which reportedly was the most expensive ballot campaign in U.S. history, need to come together. Monday’s panel discussion suggests they’re on their way, with Rocha, a vocal defender of tribes and tribal sovereignty, repeatedly thanking and complimenting the executives for their respectful work with tribes.

“You have to walk it like you talk it, because we pay attention,” Rocha said.

The November 2022 election pitted sports gaming companies like DraftKings and FanDuel against California tribes in overlapping campaigns for competing ballot measures.

Proposition 26, supported by gaming tribes, would have legalized in-person sports betting at tribal casinos and horse racing tracks. Proposition 27, backed by large online gambling companies, including DraftKings and FanDuel, would have legalized online sports betting.

Both measures failed, with about $460 million in campaign dollars being wasted on the effort. But the outcome was an unambiguous win for California’s powerful gaming tribes, who through their ability to essentially skuttle both measures showed they hold all the keys to the Golden State’s gaming market.

At the Indian gaming conference last year, tribal leaders openly declared that they will decide when sports gaming will come to California and made it clear that tribes will control it, with companies like DraftKings and FanDuel serving only as vendors, not operators.

But even in the midst of the tribes’ braggadocio, there were signs that the sports gaming giants were trying to build bridges. At last year’s conference in Anaheim, a contrite Amy Howe, the CEO of FanDuel, acknowledged the 2022 election was a “spectacular failure” and that her side “learned a lot.”

“It will be up to the tribes when it (sports gaming legalization) happens, how it happens and what role” businesses like FanDuel get to play in it, she said.

By then, FanDuel had already taken extensive measures to curry favor with California tribes.

In October 2023, it hired San Manuel Band of Mission Indians Chief Operating Officer Rikki Tanenbaum as a senior vice president for strategic partnerships. Then in January 2024, FanDuel hired Frank Sizemore, a former San Manuel vice president of operations, as a vice president of strategic partnerships.

A month later, in February 2024, it got E. Sequoyah Simermeyer, the chairman of the federal National Indian Gaming Commission, to resign his office to also take a job as a vice president for strategic partnerships with the company.

Both FanDuel and DraftKings were sponsors of last year’s convention – and this year’s too.

In November, the leader of an industry association representing DraftKings and FanDuel appeared on a webcast co-hosted by Rocha to talk about their common interest with California tribes to combat so-called gray market “sweepstakes” gambling sites that both camps say cut into their profits and undermine legal gaming operations here and across the country.

During that appearance, Rocha acknowledged to Jeremy Kudon, president of the Sports Betting Alliance, that tensions still remain between the two camps.

“I think a lot of people were shocked when I announced that you were going to be our guest this week,” Rocha told Kudon. “I think a lot of people thought that after California 26 and 27 that there would be no way that the East and West shall meet. But yet here we are, aren’t we?”

Also during that webcast, Kudon parroted Howe, conceding control of California’s lucrative sports gaming market to the tribes after the defeat of Prop. 27.

“Ultimately, we’re going to see 27 and the failure of that to be one of the best things to happen,” he said. “Because we learned how important it is to follow your lead and follow the tribes’ lead and work together and do what we can.

“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.”

The soonest that California can revisit legalizing sports betting its 2026. Whether the tribes and the sports betting giants are ready by then remains to be seen. But they’re clearly mending fences.

“It’s important that we have these continuing conversations,” Rocha said.