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California Tribes ‘Fearmongering’ Against Operators In Ads About Children

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In the newest squabble over a potential expansion of gambling, a familiar tactic is being deployed in California, the current battleground over legalized sports betting.

There’s a social media ad with a youth staring down at a cellphone — not exactly a novel depiction — and a TV spot with similar imagery. The words of the voiceover hammer the point home.

The proposed initiative, according to the ad, would turn “every cellphone, laptop, tablet, and even video game console into a gambling device, opening up online gambling to anyone, anywhere, anytime. That could lead to more addiction, financial ruin, and homelessness, while exposing millions of children to online gambling.”

The ads are in response to a proposal funded by seven major potential operators and led by BetMGM, DraftKings, and FanDuel, which if passed by voters in November would legalize mobile and online sports betting. Nathan Click, spokesman for the political committee running the campaign called California Solutions to Homelessness and Mental Health Act, says his group isn’t concerned.

“We’re not surprised, but we’re not going to be deterred by these false attacks,” Click said. “It’s not surprising to see negative ads in political campaigns, but we are not going to be deterred. Our measure is proving to be popular with California voters.”

RG advocates oppose scare tactics

The ads are being run by the Coalition for Safe, Responsible Gaming, a group of tribes in California led by the Pechanga Band of Indians, Yocha Dehe Wintun Nation, and Agua Caliente Band of Cahuilla Indians. They support a retail initiative that would legalize in-person sports betting at tribal casinos and racetracks, but not online.

“The way we approach a campaign like this is to look at it in all of its parts. What is it proposing to do? Is that going to be harmful or helpful to people in California?” said Kathy Fairbanks, a spokesperson for the coalition. “In our case, our coalition thinks it is harmful. So how do you communicate that to voters?”

The coalition has decided that a campaign designed to jar voters into thinking online gambling could turn children into addicts is the way to go, even though it is widely considered far more difficult for someone underage to create an online wagering account, deposit, and place a bet than it is to walk into a casino and lay down a wager.

But the scare tactic raises questions among those who advocate for problem and responsible gaming programs, who have seen this strategy deployed before.

“Whenever an industry vertical uses problem gaming to attack another segment or another operator or another state, they ought to make sure they have absolutely no responsible gaming issues themselves and make sure 100 percent their customers have treatment on demand,” said Keith Whyte, executive director of the National Council on Problem Gambling. “The first priority is to make sure your own responsible gaming services and problem gaming jurisdictions are the best before criticizing someone else.”

On that issue, Fairbanks pointed to tribal efforts to fund problem gaming programs, through current compacts and the tribal sports betting ballot measure, which would send 15% of revenue to the state Department of Health for problem gaming programs and treatment. State law requires that casinos make problem gambling hotline phone numbers readily available, and links to responsible gaming resources are already posted on many California casino websites. But there is great diversity in what tribes — or commercial operators across the country, for that matter — offer.

Because of that, Whyte indicated, while some tribes in California do well in the problem gaming/responsible gaming effort, it is hard to grade them all as a whole.

“Generally, they have some tribes that are very strong,” Whyte said. “San Manuel would probably be top of the list. But for a lot of tribal casinos, there’s a great variation, especially at some of the smaller casinos.”

Are children really in danger?

Fairbanks said the ads are based on polling done by the coalition, which she says has found that the “online aspect is most concerning to voters. There’s no way to be 100 percent sure that kids under 21 aren’t gambling online.”

While it is true that citizens are not comfortable with the prospect of children having available avenues to gamble, are youth really at risk?

“As someone who’s been involved in battles in California dating back to 2008, these are some of the same old myths that have been perpetuated about online gaming for more than a decade,” said John Pappas, a gaming consultant representing the industry group iDEA Growth, which promotes the iGaming sector. “I say myth, because there is really no evidence that legalizing online gaming, sports betting, or poker creates a worse environment for underage consumers than the black market.”

Pappas also pointed to research that indicates “know your customer” (KYC) protections and financial account monitoring online “have proven effective at preventing underage gambling and may actually be more effective than land-based methods.”

In order to sign up for an online gaming account, a consumer must provide their name, gender, mailing address, phone number, and email address. In some cases, the last four digits of a Social Security number are required, and then an account must be funded, which depending on the jurisdiction, may be done with a credit or debit card, wire transfer, online bank transfer, or other approved method.

In Canada, the regulator in the new Ontario market has gone a step further, requiring operators to do background checks on potential customers to determine if they can afford to wager in the first place. Having access to all of this information allows operators to quickly identify if troubling trends are developing for a bettor, which can help to prevent a descent into addiction. No such protections exist in the black market used by bettors in California and elsewhere.

“It’s really fearmongering,” Pappas said. “It goes to the base concerns of most Americans who don’t want kids gambling. I’m probably first and foremost to say that kids shouldn’t be gambling, but a regulated marketplace doesn’t create a marketplace for kids or minors to have a chance to bet [more] than the current unregulated market in California.”

Whyte echoed many of those same points.

“Legalized, regulated online gambling in the U.S. has done a very good job of protecting underage kids from accessing sites,” Whyte said. “Tech tools in place are sophisticated, robust, and any number of regulators in the U.S. check these things regularly. I’m not aware of any significant breaches by kids.”

Fairbanks said she was unfamiliar with the online operators’ tech to limit underage gaming, but that comments about limiting underage gambling weren’t absolute.

“He didn’t say it was 100 percent foolproof, so that doesn’t mean there are no problems,” Fairbanks said in response to Whyte’s comments. “That’s where California voters are. They’re not in a position right now to love online sports betting.

“Some kids could slip through. That’s of concern to voters, so we’re going to point that out.”

A familiar attack

Talk about the tactics deployed by the tribal coalition in these recent ads to anyone involved in the gambling space for a significant period of time, and you might elicit a chuckle, because the California tribes were once on the other end.

“There is a long, rich history of people in the gambling industry using problem gaming as an attack, and it always comes back to bite them,” Whyte said. “We saw this in California, when Nevada casinos were trying to keep the Indian casinos out. It’s ironic that it’s coming back in California, but it’s the tribes coming at the commercial side, because it was the commercial side who came at the tribal side then.”

And the tribes have also indicated that the retail-only initiative could be just a first step, and that online wagering could be next, after the trial balloon of in-person wagering. Another group of tribes, led by the powerful San Manuel Band of Mission Indians, has its own proposed digital sports betting initiative and is aiming for the 2024 ballot. That initiative would likely only be viable if voters fail to pass the current digital proposal.

Given the current California campaign, how would tribes — even tribes not publicly involved with the current campaign — unwind these ads, if they try to legalize mobile sports betting through another ballot initiative in the future?

“That’s a good question,” Pappas said.

— Jill R. Dorson contributed to this story



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