What State Is On-Deck?

All eyes are on Minnesota and Georgia, but STTP believes California could be the next state to legalize online sports betting - emphasis on could.

Jan 07, 2025

THE LEDE: California could be the next state to legalize mobile sports betting.
BEYOND the HEADLINE: California tribes sue cardrooms.
NEWS: A long-awaited Massachusetts tribal casino is showing signs of life.
VIEWS: Another negative sports betting article appears in the mainstream press.
AROUND the WATERCOOLER: Minnesota sports betting discussion goes negative early.
STRAY THOUGHTS: Wolves in sheep’s clothing.

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The Lede: California Before Georgia and Minnesota

In my predictions for Covers.com, I offered the hottest of hot takes as I selected California as the next state to legalize mobile sports betting — I made the case for California last Monday.

The safe choices were Minnesota or Georgia, and while these are very real and reasonable candidates, there is a scenario where California beats both states to the punch or at least legalizes mobile betting in the same year as Minnesota, Georgia, or both.

Here’s why I’m leaning negative on Minnesota and Georgia.

Georgia has already equaled Vincent Laguardia Gambino in attempts. In 2025, it will surpass Vinny’s attempts at passing the bar exam, as the state will tackle sports betting for the seventh straight year.

Nothing is likely to happen in 2025. As Eilers & Krejcik Gaming (a newsletter sponsor) noted, “Georgia only votes on statewide ballot measures in even years, so lawmakers may feel less pressure to finalize legislation this year, knowing they have that extra time.”

Meanwhile, in Minnesota, everyone is speaking positively about the progress made in 2024, but regular readers will know I have a different opinion.

There’s a line in Reservoir Dogs delivered by Quentin Tarantino in the opening diner scene that I use in real life quite often; “Tell that f***ing bulls**t to the tourists.”

Not only are there still significant stakeholder disagreements between Minnesota’s tribes and racetracks, but there is also a very evenly split legislature with a diverse array of opinions on what legal sports betting in Minnesota should look like.

With numerous new lawmakers and control of the House slipping away from the Democrats to Republicans — the Senate is currently evenly split, 33-33.

As previously reported in STTP:

“Minnesota State Sen. John Marty has announced his intention to refile a sports betting bill with a 40% tax rate and far more restrictive policies than alternative legislation filed by Rep. Zach Stephenson.”

Marty’s bill, which has an informational hearing tomorrow, also includes what EKG dubbed precedential responsible gambling policies. See today’s Around the Watercooler section below for more details on the hearing and Marty’s bill.

Considering this, California could very well be the next state to legalize mobile sports betting.

Beyond the Headline: California Tribes File Suit Against Cardrooms

This headline was inevitable after the California legislature passed legislation that Gov. Gavin Newsom signed allowing tribes to sue California cardrooms — previous litigation resulted in the cases being dismissed for lack of standing.

The backstory on SB 549 can be found here, along with previous coverage on STTP detailing cardroom opposition and tribal support.

As reported in the Sacramento Bee:

“Seven tribes — the Agua Caliente Band of Cahuilla Indians, the Barona Band of Mission Indians, the Pechanga Band of Indians, the Sycuan Band of the Kumeyaay Nation, the Viejas Band of Kumeyaay Indians, the Yocha Dehe Wintun Nation and the Yuhaaviatam of San Manuel Nation — brought the suit, filed by the San Francisco-based law firm Keker, Van Nest & Peters.”

The complaint highlights the 1984 ban on banked games (passed via referendum) and a constitutional amendment (Prop 1a) passed in March 2000 that exempted tribes from the prohibition of banked games.

Cardrooms have found a workaround despite the ban: a player-banked model involving a rotating deal.

They also received a gift when former regulator Bob Lytle introduced a controversial rule change in December 2007 that authorized a rotating player-banked deal just before he went to work for a California cardroom. Lytle’s interpretation of the rules created the convoluted Third Party Proposition Players (TPPP) rules that cardrooms use (a good explainer can be found here).

Tribes have cried foul for years, as the complaint reads, “For years, California card rooms and their partner third-party proposition players have ignored the law and refused to recognize tribes’ exclusive rights… Most of the game rules, either as written or by card room interpretation, do not require actual rotation of the bank — merely the offering of it.”

Per the Sacramento Bee:

“The lawsuit points out that card rooms have partnered with third-party proposition players, who pay for the privilege of being the banked player with its “superior odds,” and that such partners “typically do not make wagers at all, but rather take on the role of paying out all the wins and losses, whatever they may be — in other words, taking on the traditional role of the bank found in a Nevada or New Jersey casino and rendering the games banked games.”

The California Gaming Association said in a statement that its members “are operating table games in full compliance with the law, just as they have done for decades.”

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News: End In Sight For Long-Awaited MA Tribal Casino

I may have been the first person in the gambling industry to report on this story back in the mid-2010s, and nearly a decade later, the Mashpee Wampanoag tribe is still inching toward opening a tribal casino in Massachusetts.

The casino efforts of the Mashpee Wampanoag are among the most convoluted in tribal gaming history, with several Department of Interior land-in-trust decisions, a lawsuit filed by Taunton residents, former Mashpee Wampanoag Chair Cedric Cromwell convicted of bribery charges related to the casino project, the loss of their partner, Genting, and the tribe being in millions of dollars of debt to the city of Taunton.

So what is the latest?

A welcome center, but with a slight twist.

First, the planned welcome center will include native artifacts and “10 gaming machines,” leaving little doubt about its intended future use, which I speculated about last month.

Taunton Mayor Shaunna O’Connell told the Taunton Daily Gazette that, based on conversations with representatives of the Mashpee Wampanoag Tribe, there will be "limited gaming offered at the Welcome Center as a preview."

According to a statement from current Mashpee Wampanoag Chairman Brian Weeden, “We are thrilled to announce we will be working with the city to develop our phased plan for the future First Light Resort and Casino. We are working toward presenting these plans to the public in early 2025.”

Views: Is Sports Betting on Homeland Security’s Radar?

Matthew Wein, a former staff member of the House Committee on Homeland Security’s Subcommittee on Intelligence and Counterterrorism and policy adviser to the DHS assistant secretary for policy, penned an article for The Hill where he draws a link between athlete harassment from sports bettors and the Department of Homeland Security.

“The coming policy clash that no one sees coming is where the burgeoning sports gambling world will undoubtedly cross paths with the Homeland Security world,” Wein writes.

“Terrorism is narrowly defined as violence, or threats of violence for political motives, so the threats discussed here fall outside of those bounds and within the purview of criminal threats. But plenty of crimes that are not terrorism fall within the jurisdiction of the Department of Homeland Security, its criminal investigators, and policy professionals—to say nothing of legislators with an interest in sports integrity and homeland security.”

Wein then connects some weird dots in the article but hits the bullseye with this comment, because no matter where you fall, there is a storm brewing, and the industry should be trying to get out in front of it:

“No matter where you sit on the policy spectrum regarding the issue of sports betting, if you connect these dots, you can see the policy debate coming — so the prudent thing to do would be to prepare now for common sense solutions that can be built into products and platforms now, rather than bolting them on down the line. Or worse yet, claiming that the car is too far down the track to try and establish important protections.”

What does the industry think of the article? I think John Pappas sums up the industry’s feeling quite nicely in this tweet:

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Around the Watercooler

Social media conversations, rumors, and gossip.

So much for putting your best foot forward. As Sports Betting Dime’s Robert Linnehan noted, Minnesota’s 2025 sports betting push will kick off with an informational hearing discussing the economic, health, and social harms of online sports betting.

As STTP has previously reported, Minnesota State Sen. John Marty plans to refile his (pretty much unpassable) sports betting legislation again in 2025. The legislation calls for a 40% tax rate and restrictive, in some cases unique policies.

The bill requires mobile sportsbooks to institute deposit/loss limits ($500 in a 24-hour period; $3,000 monthly) and activity limits (no more than four consecutive hours) and creates a “Red Flag Law” similar to gun laws that allow family members to notify regulators about concerning behaviors.

It also bans:

College proposition bets
In-game wagering
Push notifications
Sports betting advertising on public property, including stadiums
Advertising during an event where at least 10% of the audience is under 21
Terms like “risk-free” bets

Stray Thoughts

Whenever I hear someone tout credit card prohibitions as an answer to mitigating social harm, my mind immediately races to the workarounds, like this one:

As I said to someone privately, Let the wolves dress like wolves and stop forcing them to wear sheep's clothing. Is it really a solution if it creates a more complex problem?

I think it’s far easier to deal with the problem you can plainly see.