If there were such a thing as a sucker bet in California’s last statewide election, it would have been the oceans of dollars spent in a failed attempt to convince voters to legalize sports betting.
How bad of a wager was it, back in 2022?
Proposition 26, which aimed to allow in-person sports betting at tribal casinos and state-regulated racetracks, managed just 33% support.
Proposition 27, which would have allowed tribes to offer online sports betting, failed to clear 18%.
Which makes it all the more curious that a pair of ballot measures filed late last month with California’s secretary of state ask Golden State voters to endorse . . . the same sports betting they roundly rejected just two years ago.
The two initiatives in question: the Tribal Gaming Protection Act and the Sports Wagering Regulation and Tribal Gaming Act—the former allowing California’s governor to negotiate tribal gaming pacts for in-person and online sports betting; the latter providing a compact model for tribes to use to arrange sports betting within the Golden State.
Here, the mystery deepens—not just as to why the same concept might succeed after a relatively recent and decisive beatdown (that’s if the measures qualify, and we’ll get to that in a moment), but also who’s driving the initiative train.
A quick glimpse of the documents submitted with the secretary of state’s initiative coordinator shows the two would-be ballot measures coming from an individual named Ryan Tyler Walz, with an online entrepreneur named Reeve Collins also listed as a proponent.
To the extent that California media were able to get a comment from either principal, it was from Collins’s phone voicemail, which offered assurance that “these acts are designed to protect California tribes and California taxpayers who are seeing their dollars go to offshore unregulated gaming sites.” Collins added, somewhat cryptically: “There will a lot more information coming out soon, and we’re really looking forward to the process.”
As far as the fate of the gaming measures is concerned, “soon” is an apt word, as time is not on the organizers’ side. In order to qualify for next November’s election, a shade under 875,000 valid signatures will have to be collected over the course of the next four months.
Such a condensed timeline means a lot of money up front. And at this point, it’s not clear where the money is coming from.
The likely investors, if they’re willing to re-engage: the same parties who went down in flames in two years ago. Those would be online gaming companies and California’s gaming tribes.
But, to date, the tribes aren’t participants. The California Nations Indian Gaming Association, which represents federally recognized tribal governments, is noticeably absent from the paperwork filed in Sacramento. That didn’t stop the group from issuing this snippy statement: “Decisions driving the future of tribal governments should be made by tribal governments. While the sponsors of these initiatives may believe they know what is best for tribes, we encourage them to engage with Indian Country and ask, rather than dictate.”
As for involvement on the part of gaming companies (think FanDuel and DraftKings), that depends on how conspiratorial is one’s mindset.
Reporters who looked into backgrounds of Walz and Collins, the initiatives’ drivers, discovered the latter’s LinkedIn account and his claim to have raised $70 million to launch “a legal, real-money gambling site based in the US called Pala Interactive” (the Pala reservation, in San Diego County, being home to a casino, spa, and resort). However, the Pala band denied involvement in either of the failed initiatives.
A more direct financial link would seem to exist with online gaming businesses—in this case, Nevada’s Boyd Gaming Corp., a 5% equity owner in FanDuel who acquired Pala Interactive two years ago for a reported $170 million. However, a Boyd spokesman denied involvement in the initiative filing—as well as denying, for that matter, a relationship with Collins and Walz.
So where does this leave California initiative watchers? Confused both as to why a push for sports wagering has been renewed and how the endeavors will be financed.
Then again, it’s not the only money mystery in Sacramento these days. Which takes us back to my most recent California on Your Mind column: governor Gavin Newsom’s October visits to Israel and China.
It’s not that Newsom did anything illegal during the planning and financial underwriting of his globe-trotting. His trip was financed by the California Protocol Foundation, which accepts donations on the governor’s behalf for travel and other expenses. (Since his first term, beginning in 2019, Newsom has transferred at least $4 million from his inaugural fund to the foundation.) In the case of Newsom’s trip to China, a sizable donation reportedly came from the William + Flora Hewlett Foundation, which deemed the gift an “environmental grant” given that the stated purpose of the governor’s visit was to discuss climate change with his Chinese counterparts.
And therein lies the problem. Not that the Hewlett Foundation is guilty of this infraction, but for any entity looking to curry favor with the governor, making payments to the foundation that underwrites his travel and occasional photo ops (for example, December’s annual State Capitol Tree Lighting Ceremony) is a quiet way to get noticed by his office.
Such is the way the game is played in Sacramento. In 2017, his penultimate year as California’s governor, Jerry Brown wasn’t shy about encouraging contributions to his pet causes. As Brown was term-limited and not championing any expensive ballot measures, donating generously to the Oakland Military Institute and the Oakland School for Arts made for a convenient way for special interests (casinos, Big Oil, California’s telecom concerns) to stay on Brown’s good side.
But in the Newsom era in Sacramento, donors discovered another gubernatorial backchannel: his wife’s work.
According to news accounts, the Representation Project, which promotes the causes of First Partner Jennifer Siebel Newsom (“together, we are bending the long arc of history toward intersectional gender justice,” its website assures us), receives donations from companies that either lobby her husband’s administration or are significantly affected by state regulatory decisions (Mrs. Newsom reportedly receives a $290,000 annual salary courtesy of the project). That largesse has included contributions from the utility giant PG&E, which in early 2022 was quietly recertified as a “safe” company despite being held responsible for two massive wildfires across Northern California.
Is there a way California to remedy such seeming conflicts of interest?
A start might be to restrict exactly what’s allowable under the guise of protocol foundation spending. Two years ago, for instance, Newsom reportedly used $80,000 in foundation money to underwrite a State of the State address delivered from Dodger Stadium and not the State Capitol. Per Politico: “Newsom’s . . . speech read to many like a political speech rather than a policy-specific vision, with high production values that included video footage illustrating his talking points.”
A second possible reform: boundaries and limits. At present, there is no cap for donations to the California Protocol Foundation. Perhaps that should be altered to something more in line with contributions to gubernatorial contests ($36,400 per election). I’d also add this caveat: an individual or an entity can’t give to the Protocol Foundation if they’re actively doing business in Sacramento (lobbying the administration or the state legislature) or aim to benefit from governmental decisions.
Will any such reforms change Sacramento for the better? That’s an academic question. But it would address a uniquely California problem: money as the root of all evil, even when it’s advertised as a civic-minded charity.
