A joint venture consisting of MGM Resorts International and GVC Holdings has reached an agreement with the United Auburn Indian Community (UAIC) in California to offer in-person and online sports betting, casino games and poker when permitted by state law.
The UAIC operates Thunder Valley Casino Resort in Lincoln, about 30 miles east of Sacramento. In a press release issued on Monday, UAIC Chairman Gene Whitehouse said, “It is not yet clear if California will authorize sports betting or interactive games generally, but with the overturn of PASPA possibly opening the door for sports betting, our Tribe wants to be well-situated, and this agreement with the national leader in the field does just that.”
Details of the deal remain limited beyond MGM-GVC confirming it “will provide its iconic brands and proprietary technology to enable UAIC to offer retail and mobile sports betting and online casino and poker if and when any are permitted under state law.”
MGM Resorts International and GVC formed their joint partnership in July to target new opportunities in the expanding sports betting and online gambling markets in the USA. As a part of the joint venture, both companies each pledged an initial $100 million investment to get the ball rolling.
California is a Tempting but Complicated Market
California is a tempting sports betting and gaming market with a population of nearly 40 million and a GDP on par with the entire UK. It’s also a complicated market with a myriad of lawmakers, tribal interests and commercial stakeholders all pushing and pulling in different directions.
California lawmakers have been attempting to legalize online poker for years now, but that has proven enormously difficult with progress measured in inches. All previous attempts to legalize online poker or sports betting have failed to yield positive results with talks breaking down once various interested parties get involved.
One of the key points of contention regarding online poker in California is whether or not companies such as PokerStars should be allowed to apply for licenses after taking wagers from customers in California before the state had legalized online poker.
Similar issues have already arisen in discussions concerning sports betting in California, so it could be quite some time before this deal provides tangible benefits to MGM, GVC and the UAIC.
For instance, some gaming tribes claim they alone would have the right to offer sports betting if the state passes a legalization bill due to existing gaming compacts with the state. Steve Stallings, chairman of the California Nations Gaming Association, recently said “the tribes are going to stand on the principle that only we operate full casino-style gaming in the state,” which he believes includes sports betting.
Then, there’s the Thoroughbred Owners Association of California that also wants a seat at the table while simultaneously seeking to prohibit online betting. And on a third side we have companies such as MGM and GVC that are obviously interested in seeing online betting in California.
UAIC knows first-hand how slowly things move in California. In fact, UAIC has prior connections to GVC Holdings. Back in 2012, UAIC and Bwin.party reached a deal to run an online poker site in anticipation of favorable online poker legislation in California. That deal went nowhere when lawmakers were unable to pass legislation, and Bwin.party was acquired by GVC Holdings several years later.
Despite its difficulties, California remains a prime target for major gaming companies that are now rushing to set up shop across the US as sports betting legalization efforts spread. California’s potential as an online gaming and sports betting market makes it too valuable for companies such as MGM and GVC to ignore even if any time or money spent on the state right now is a gamble.