14-K
TO: Honorable Mayor and Members of the City Council
FROM: Jeffrey L. Stewart, City Manager
SUBJECT: Consideration and possible action to consider adopting Resolution No. 22-47 – A Resolution affirming the City’s opposition to the “Legalize Sports Betting on American Indian Lands Initiative” related to sports betting on American Indian gaming casinos and licensed racetracks in California.
DATE: August 8, 2022
EXECUTIVE SUMMARY
This action would adopt a resolution opposing the California Legalize Sports Betting on American Indian Lands Initiative (Proposition 26 and Proposition 27). The California Contract Cities Association, Gateway Cities Council of Government, and other local governments have expressed opposition to the California Legalize Sports Betting on American Indian Lands Initiative, along with the California Cities for Self-Reliance Joint Powers Authority also known as the Gaming Cities JPA and its member cities as it negatively affects cardrooms in communities that greatly depend on them.
RECOMMENDATION TO CITY COUNCIL
1) Consider adopting Resolution No. 22-47; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
There is no fiscal impact with this action.
DISCUSSION
In 2019, California Senator Bill Dodd introduced SCA 6 which proposed to establish the California Sports Wagering and Consumer Protection Act. The Act would have authorized sports betting, including online or mobile sports betting, for horse race tracks and federally recognized “American Indian” tribes. The bill would also incorporate the authority of a licensed gambling establishment to offer games with cards or tiles in which participants wager against each other. The bill was shelved in June 2020 due to opposition by a coalition of 25 Native American tribes that argued that the legislation would allow competing card clubs to continue offering card games the tribes claim violate their exclusive compacts with the state.
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Staff Report – Opposition to Indian Lands Initiative Related to Sports Betting August 8, 2022
DISCUSSION – Continued
A new initiative has been proposed and now qualifies for the ballot in California as a combined initiated constitutional amendment and state statu te on November 8, 2022.
The California Legalize Sports Betting on American Indian Lands Initiative would legalize sports betting at American Indian gaming casinos and licensed racetracks in California as well as legalize roulette and dice games, such as craps, at tribal casinos.
The proposed measure would legalize sports betting in California and distribute various percentages of the tax revenue to implement programs for problem gambling prevention programs and mental health.
The California Gaming Association (CGA), a trade association of licensed cardrooms and vendors oppose the measure because it contains language that would primarily benefit Native American Casinos and subject other California card clubs to increased state regulations. The eligible tribal gaming measure changes the Constitution and could set a precedent that would likely result in the loss of quality jobs—primarily held by Californians in minority communities. It is estimated that local communities could lose good-paying jobs that generate $1.6 billion in wages annually. This measure could also force cardrooms out of business and result in a loss of local tax revenue statewide—meaning fewer funds for public health, homelessness services, senior centers, and after school programs. It is estimated California and local communities could lose $5.6 billion in economic output generated by cardrooms. The initiative would expand Native American Casino gaming exclusivity over the gaming industry. In addition, under this measure, sports wagering would only be allowed in person and online at tribal gaming casinos and state-licensed racetracks, thus preventing online or mobile gaming in other California card clubs.
By adopting Resolution No. 22-47, the City would join the California Contract Cities Association, Gateway Cities Council of Government, and other local governments in their opposition to the California Legalize Sports Betting on American Indian Lands Initiative, along with the California Cities for Self-Reliance Joint Powers Authority also known as the Gaming Cities JPA and its member cities as it negatively affects cardrooms in communities that greatly depend on them.
The Qualified Statewide Ballot Measure language listed on the California Secretary of State’s website is listed below for reference:
Proposition 26
1886. (19-0029A1)
AUTHORIZES NEW TYPES OF GAMBLING. INITIATIVE CONSTITUTIONAL AND STATUTORY AMENDMENT. Allows federally recognized Native American tribes to operate roulette, dice games, and sports wagering on tribal lands, subject to compacts negotiated by the Governor and ratified by the Legislature. Beginning in 2022, allows on-site sports wagering at only privately operated horse-racing tracks in four specified counties for persons 21 years or older. Imposes 10% tax on sports -wagering profits at horse-racing tracks; directs portion of revenues to enforcement and problem -gambling programs. Prohibits marketing of sports wagering to persons under 21. -2-
Staff Report – Opposition to Indian Lands Initiative Related to Sports Betting August 8, 2022
DISCUSSION – Continued
Authorizes private lawsuits to enforce other gambling laws. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Increased state revenues, potentially reaching the tens of millions of dollars annually, from payments made by facilities offering sports wagering and new civil penalties authorized by this measure. Some portion of these revenues would reflect a shift from other existing state and local revenues. Increased state regulatory costs, potentially reaching the low tens of millions of dollars annually. Some or all of these costs would be offset by the increased revenue or reimbursements to the state.
Increased state enforcement costs, not likely to exceed several million dollars annually, related to a new civil enforcement tool for enforcing certain gaming laws. (19 -0029A1.)
Proposition 27
1911. (21-0017A1)
ALLOWS ONLINE AND MOBILE SPORTS WAGERING. INITIATIVE
CONSTITUTIONAL AMENDMENT AND STATUTE. Legalizes online and mobile sports wagering, which currently is prohibited, for persons 21 years and older. Such wagering may be offered only by federally recognized Indian tribes and eligible businesses that contract with them. Individuals placing bets must be in California and not located on Indian lands. Imposes 10% tax on sports-wagering revenues and licensing fees. Directs tax and licensing revenues first to regulatory costs, then remainder to: 85% to homelessness programs; 15% to nonparticipating tribes. Specifies licensing, regulatory, consumer-protection, and betting-integrity standards for sports wagering. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Increased state revenues, potentially reaching the mid-hundreds of millions of dollars annually, from online sports wagering-related taxes, licensing fees, and penalties. Some portion of these revenues would reflect a shift from other existing state and local revenues. Increased state regulatory costs, potentially reaching the mid- tens of millions of dollars annually, that would be fully or partially offset by the increased revenues. (21-0017A1.)
ATTACHMENTS
Resolution No. 22-47....................................................................................................... 4
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CITY OF BELLFLOWER
RESOLUTION NO. 22-47
A RESOLUTION AFFIRMING THE CITY’S OPPOSITION TO THE
“LEGALIZE SPORTS BETTING ON AMERICAN INDIAN LANDS
INITIATIVE” RELATED TO SPORTS BETTING ON AMERICAN INDIAN
GAMING CASINOS AND LICENSED RACETRACKS IN CALIFORNIA
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds as follows:
A. In 2019, California Senator Bill Dodd introduced SCA 6 which proposed to establish the California Sports Wagering and Consumer Protection Act. The Act would have authorized sports betting, including online or mobile sports betting, for horse race tracks and federally recognized “American Indian” tribes.
B. The bill would also incorporate the authority of a licensed gambling establishment to offer games with cards or tiles in which participants wager against each other.
C. A new initiative has been proposed and now qualifies for the ballot in California as a combined initiated constitutional amendment and state stat ute on November 8, 2022. The California Legalize Sports Betting on American Indian Lands Initiative would legalize sports betting at American Indian gaming casinos and licensed racetracks in California as well as legalize roulette and dice games, such as craps, at tribal casinos.
D. The proposed measure would legalize sports betting in California and distribute various percentages of the tax revenue to implement programs for problem gambling prevention programs and mental health. The California Gaming Association (CGA), a trade association of licensed cardrooms a nd vendors oppose the measure because it contains language that would primarily benefit Native American Casinos and subject other California card clubs to increased state regulations.
E. The eligible tribal gaming measure changes the Constitution and sets a precedent that could result in the loss of tens of thousands of quality jobs — primarily held by Californians in minority communities. Local communities could lose good-paying jobs that generate $1.6 billion in wages annually. This measure could also force cardrooms out of business and result in a loss of local tax revenue statewide—meaning fewer funds for public health, homelessness services, senior centers, and after school programs.
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City of Bellflower
Resolution No. 22-47
F. It is estimated California and local communities could lose $5.6 billion in economic output generated by cardrooms. The initiative would expand Native American Casino gaming exclusivity over the gaming industry. In addition, under this measure, sports wagering would only be allowed in person and online at tribal gaming casinos and state-licensed racetracks, thus preventing online or mobile gaming in other California card clubs.
SECTION 2. The City of Bellflower joins the California Contract Cities Association, Gateway Cities Council of Government, and other local governments in their opposition to the California Legalize Sports Betting on American Indian Lands Initiative, along with the California Cities for Self -Reliance Joint Powers Authority also known as the Gaming Cities JPA and its member cities as it negatively affects cardrooms in communities that greatly depend on them.
SECTION 3. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as havin g the same effect as an original signature.
SECTION 4. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 5. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 8th DAY OF AUGUST 2022.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
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