History Lesson: Don't Divide The Tribes

California’s tribes hold the key to gambling expansion, but gaining their support is complex. PokerStars learned this lesson, and now sports betting operators are, too.

A decade ago, PokerStars was lobbying for the legalization of online poker in California. It turned into a knock-down, drag-out fight. Coalitions were formed, bills were introduced, and the only thing to show for the multi-year effort was a lot of spent money and increasingly strained relationships.

PokerStars’ past efforts bear a striking resemblance to the current efforts to legalize sports betting in the Golden State.

The cold, hard truth is that any expansion of gambling in California goes through the tribes. Full stop. PokerStars learned this lesson. DraftKings, FanDuel, and the other operators trying to open the California sports betting market learned it, too. Everyone knows gambling expansion goes through tribes, but few understand what that means.

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We (“we” includes tribes) often refer to California tribes as a singular entity. We need to work with tribes. We need tribal support. It’s a shorthand that works in general conversation, but once you drill down into specifics, it no longer holds up.

Those generalized statements are about as useful as a struggling business saying, ‘We need to make more money.’ Yes, there is working with tribes, but there is also the need to work with individual tribes.

There are 109 tribes in California, each with its own unique history, perspectives, and objectives. Put simply, working with tribes and securing tribal support is relatively easy. You can dangle all sorts of carrots in front of tribes, and more than a few will come along.

That said, you can have tribal support without having “tribal support.”

The Right Support

Case in point, the recent dustup over a roundtable discussion at the Indian Gaming Tradeshow & Conference.

The roundtable, intended to build bridges between tribal and commercial interests, sparked backlash instead. Veteran journalist Jill Dorson, invited to the on-the-record discussion, reported on slides that implied broader agreement than intended.

Tribes, expecting privacy and not thrilled with the framing, pushed back. CNIGA and TASIN called it a “breach of trust,” which is in short supply after 2022’s bitter ballot fight. Despite clarifications and updates, the damage was done. Read more on the IGA fallout here.

Commercial operators do have tribal support, but they lack the level of buy-in necessary to broker a deal. The trick is getting the right tribes on board; that’s when the magic happens. Sure, gambling expansion goes through the tribes, but just like when a fight is about to kick off, you need to understand who can throw hands and who can’t. There is strength in numbers, but if the choice is Tom Aspinall or a dozen fourth graders, I want Tom Aspinall standing next to me in a fight.

To better understand California, I’ll first turn to Texas. The Lieutenant Governor of Texas wields outsized legislative power, capable of deciding what bills are brought to the Senate floor for a vote. It doesn’t matter if a bill would pass the chamber, or even if it has overwhelming support; the Lt. Gov. can see that it never sees the light of day.

Now, imagine upwards of half a dozen people who unofficially possess that power, and you have the political situation in California around gambling expansions. It’s one thing to convince a Lt. Gov., it’s quite another to convince four, five, or six competing entities to agree to something — I won’t list them because I will inevitably leave out a tribe that believes they belong on the list or include one that other tribes don’t think should be there.

And if that wasn’t complicated enough, imagine if a group of Texas senators could band together and wield the same veto power? That is precisely what can happen in California if a group of tribes band together or form a coalition with other politically powerful entities, such as the horse racing industry and its union support.

The point being: You can divide California tribes; it’s not that difficult. Unfortunately, divide and conquer doesn’t work in California. That approach makes skeptical tribes more skeptical and turns you into an outside threat that galvanizes opposition. When you try to divide the tribes, you bring together the ones that matter — the ones with political clout.

How’d You Get Up There? It Wasn’t Easy

The path to sports betting (or poker) in California requires several needles to be threaded: