A coalition of Southern California cities is opposing a sports betting ballot initiative they claim would fuel excessive litigation against cardrooms, potentially shutting them down, effectively killing 32,000 jobs and wiping out $1.6 billion in annual wages.
The initiative from Pechanga Resort Casino has no official name but is referred to as the Tribal Sports Wagering Act. It would allow sports wagering at tribal casinos and at four California racetracks — Santa Anita Park in Arcadia, Los Alamitos Race Course in Cypress, Del Mar in San Diego and Golden Gate Fields in Berkeley.
Opponents say the measure would give tribal casinos a near-monopoly on all gaming in California – adding exclusivity over roulette, craps and sports wagering to their current monopoly on slot machines.
They contend it also would also expand the Private Attorneys General Act, allowing tribal casinos to hire private trial lawyers, effectively replacing the role of the state’s attorney general to sue cardrooms and potentially forcing them out of business over costly litigation.
If the initiative gains voter approval in November, they say the Los Angeles region stands to lose at least $71.1 million in general-fund tax revenue that supports public health and homelessness services and senior programs.
Fears are ‘misconstrued’
The anti-initiative coalition — including representatives from Commerce, Compton, Hawaiian Gardens and Bell Gardens — held a press conference Thursday, May 19 outside the Commerce Senior Citizens Center to voice their concerns.
Kathy Fairbanks, a spokeswoman for the Coalition for Safe, Responsible Gaming, said fears surrounding the initiative have been misconstrued.
“Our measure simply ensures existing laws preventing illegal gambling are being followed,” she said. “Cardrooms following the law have nothing to worry about — nor do their employees.”
She cited a $3.1 million settlement in 2019 against The Gardens Casino in Hawaiian Gardens as an example. The casino was fined for misleading gambling regulators and violating the Bank Secrecy Act, a federal law intended to combat money laundering.
“In the gaming world, if you fail to play by the rules, expect to pay the price,” California Attorney General Xavier Becerra said at the time.
The partnership that operates Bicycle Hotel & Casino in Bell Gardens agreed to a similar $500,000 settlement late last year to resolve an investigation into alleged violations of the anti-money laundering provisions of the Bank Secrecy Act.
“The only cardroom casinos at risk of legal enforcement are those that repeatedly violate California gaming laws,” Fairbanks said.
Fears of lost revenue
Opponents of the Pechanga initiative still fear a tribal casino monopoly on gaming and increased PAGA litigation might prove too costly to fight and could result in cardroom closures.
Bell Gardens Councilwoman Alejandra Cortez said the Bicycle Hotel & Casino generates about 46%, or $15 million, of the city’s general-fund revenue. If the venue was forced to shut down the impact would be catastrophic, she said.
“We got a preview of what that would be like when we had to shut down in 2020 during the COVID-19 pandemic,” Cortez said. “It was closed for nine months and it resulted in a loss of about $10 million.”
Cortez said those are critical funds that help pay for police service, public works and other basic services needed to keep the city up and running.
Hawaiian Gardens would suffer an even bigger hit, according to City Councilman Jesse Alvarado.
“The Gardens Casino, which has operated in the city of Hawaiian Gardens for the past 22 years, is a critical partner to our entire community – providing more than 68% of our city’s total general fund revenues,” Alvarado said in a statement.
The money, he said, has played a vital role in the city’s ability to fight crime and roll back major gang-control issues.
“If the eligible tribal gaming initiative were to become law, it would devastate our community,” Alvarado said.
Commerce Mayor Oralia Rebollo said Commerce Casino generates about 46% of her city’s annual revenue, and it’s never been accused of money laundering.
“They have always been transparent, so we’ve never had to endure these types of issues,” she said. “I take pride in how the casino is managed.”