California Tribes Prepare to Fight Sweepstakes and DFS Operations

unregulated sweepstakes and daily fantasy sports (DFS) platforms, which they argue infringe upon their long-held gaming exclusivity. The California Nations Indian Gaming Association (CNIGA), alongside other tribal groups, has voiced its concern over these gaming platforms, describing them as both untaxed and unregulated.

During a recent webinar hosted by the Indian Gaming Association (IGA) conference chair, Victor Rocha, discussions centered on the troubling increase of sweepstakes sites and DFS offerings in California. Rocha emphasized the risks posed by these platforms to the state’s regulated gaming industry, stating, “They’re coming and they’re taking money from who knows who.”

The conversation at the webinar delved into the longstanding challenge tribal nations face in safeguarding their gaming sovereignty. Rocha was ed by CNIGA chairman James Siva and National Indian Gaming Commission (NIGC) executive director Jason Giles. The discussed how, despite California’s tribes having exclusive rights to operate gaming establishments, unregulated platforms are exploiting legal loopholes to make their way into the market.

Sweepstakes and Their Impact on Tribal Gaming

Sweepstakes sites, which often themselves as “free-to-play” platforms, have become a cause for alarm. Unlike traditional gaming sites that require real money, these platforms use virtual currencies, such as “coins” or “tokens,” allowing players to purchase additional chances to win. Although this format may appear less harmful, Siva pointed out the insidious nature of such platforms, warning that “the longer they are here, the more entrenched they get.”

Sweepstakes platforms, Siva continued, tend to build a dedicated customer base over time, making it increasingly difficult to regulate or shut them down. Tribal leaders argue that these operators are undermining not only the exclusivity granted to them under the Indian Gaming Regulatory Act (IGRA) but also the financial benefits the tribes provide to California through their regulated gaming operations.

Tribes Ready for Legal Action

Victor Rocha made it clear during the webinar that California tribes are ready to take legal action if necessary. Rocha, echoing sentiments shared by the tribal leaders, stated, “We will take on that fight anytime, anywhere, anyhow.” He stressed that the tribes would defend their sovereignty against any entity attempting to by them, including unlicensed gaming platforms.

As sweepstakes continue to proliferate, the threat to tribal gaming operations grows. Siva also highlighted that California’s Attorney General Rob Bonta is expected to issue an opinion regarding the legality of DFS in the state. While this decision could shape the future of gaming in California, Siva expressed frustration with the delays in addressing the issue, especially when tribes have been advocating for clearer regulations for over a decade.

Cease-and-Desist Letters and Future Steps

Both CNIGA and the NIGC are preparing to sendthrough their app stores. Siva pointed out that these companies are facilitating illegal activities, selling access to platforms that are in direct violation of state laws.

Jason Giles added that the NIGC might also explore national measures, encouraging tribes across the country to unite in their opposition to unregulated gaming platforms. The conversation underscored the need for collaboration among tribal nations, commercial operators, and state regulators to address the issue comprehensively.

A New Challenge for Tribes

While the introduction of sweepstakes and DFS is a new challenge, the struggle to protect tribal sovereignty over gaming is far from new. For decades, tribes have been navigating legal and regulatory hurdles to maintain their exclusive rights to offer gambling services in their states. Rocha reflected on how California tribes had successfully fended off attempts by commercial operators to enter the market through sports betting initiatives in 2022, a fight that cost tribes millions of dollars but ultimately preserved their interests.

As the legal landscape continues to evolve, Siva emphasized that any new gaming initiatives in California must go through the tribes. “Any new entry of gaming into California begins and ends with tribes,” he said. Despite growing external pressures, the tribes remain resolute in their commitment to defending their sovereignty and the economic benefits they provide to their communities.

Source:

“Sweepstakes and Tribal Gaming Fight“, igamingbusiness.com, October 16, 2024.