California Casinos Could Have New Funding Model

We cover Native American tribes a lot of this website. Why? Because they are one the biggest stakeholders in the entire betting industry. In several markets, the tribes are the only show in town thanks to exclusive deals with state governments.

None of those markets is bigger than California, the most populous state in the country — and biggest economically too. In 1999, the Golden State signed compacts with 58 tribes giving them the sole right to offer legal betting. More than 25 years later, the industry has been a boon to local tribes, who largely fund themselves off casinos.

The future is even brighter, too. As it stands, tribes only offer casino play right now. But there in talks with top mobile apps like DraftKings and FanDuel to make sports betting in California a thing. That’s years away, but they’re at least talking. Not only that, the tribes are amid a lawsuit with California card rooms. If they win, they’d be the only place in-state to allow card games.

Amos this backdrop of news, there’s been a story floating under the radar. We don’t want to say it’s bigger than legal sports betting or the ban of card rooms, but it could have a seismic effect on tribes and how they fund land-based projects. Keep on reading and we’ll explain all about it!

Historic Tribal Gaming Finance Deal Brokered

Ever heard of the Ione Band of Miwok Indians? Mostly in Northern California, this tribe has around 750 members. So not it’s not the biggest, but that ain’t stopping its quest to build a casino.

To do that, they are partnering with Gaming and Leisure Properties Inc. (GLPI) to secure a $110 million delayed draw term loan for the development of the Acorn Ridge Casino near Sacramento. This agreement actually dates back to September 2024, but it’s just now coming to fruition. The deal marks the first instance of a federally recognized tribe collaborating with a real estate investment trust (REIT) for casino financing.

Some of you may be reading this thinking, “what the hell are REITs anyway?” In layman’s terms, REITs are companies that own or finance income-producing real estate. Most of them specialize in stuff like apartments or office buildings, but there’s a niche group of REITs that focus entirely on casinos. The REIT strictly owns the property and leases it out to operators. That’s their way of producing income, not operating the casino. Landlords, essentially, but a company, not an individual.

Unlike traditional REIT financing arrangements, this deal incorporates unique provisions to maintain tribal sovereignty. At the end of the five-year loan term, the Ione Band has the option to convert the outstanding principal into a long-term lease, initially set for 25 years with a potential extension to 45 years. This structure ensures compliance with the Indian Gaming Regulatory Act (IGRA), which mandates that tribes maintain sole proprietary interest in gaming operations. This is a federal law, not California. The National Indian Gaming Commission (NIGC) approved the agreement to make it official.

“GLPI was great about letting the tribe take the lead there,” said Sarah Dutschke, Chair of the Ione Band. “That was really important to demonstrate to NIGC that these were the tribe’s decisions supported and backed by GLPI.”

GLPI Open To More Tribal Partnerships

The deal with Ione Band is, for now, an anomaly. However, it could become a trend with other tribes joining the fray. Brandon Moore — President and COO of GLPI — has openly said as much. He mentioned the Ione Band deal was 10 years in the making and they couldn’t find the right partner before. Now? They’re open for more business.

“Would we do several hundred million [more]? Sure, absolutely.” Moore said. “If the underwriting is there and the project is good and we believe in the team, we would absolutely pursue a transaction before we see in five years whether [the Ione Band] elects to enter into a long-term lease or not. We are actively pursuing this if it’s a good fit.”

Moore thinks the REIT structure is an advantage to doing more deals with more tribes. “We have the capital, we have the balance sheet. Tell us what you need it for and how you plan to use it. For us, if you’re putting that money in a way that is accretive to your business, and we can underwrite it long term, the capital will be available.”

Smaller Tribes Could Be Biggest Beneficiaries

As we said, Ione Band isn’t exactly a big tribe. But that’s what makes this development so interesting. It could open the door for smaller tribes to access capital they otherwise wouldn’t have — without compromising sovereignty.

“The long-term lease element we talked about here serves as a surrogate for tribal nations to issue equity,” said William Newby, who serves as President of TFA Capital Partners. “And that equity provides a mechanism for growth and diversification. So we view this as a really interesting option for tribes.”

Only time will tell if that ends up being true. First, it’s on Ione Band to prove this model works — for them and GLPI. If it does, tribal betting in California could forever be changed.