Santa Anita gaming machine case looks ripe for long fight

In the span of a week, Santa Anita Park in California debuted new “Racing on Demand” machines, saw them seized by the state and filed a lawsuit requesting they be returned, which could become the latest addition to a growing list of battlefronts for state gaming tribes.

Santa Anita installed 26 of the machines on 15 January and the state’s Department of Justice seized them, along with the money inside the units, two days later. The track almost immediately filed suit against the DOJ and Attorney General Rob Bonta in Los Angeles Superior Court. The allegations in the complaint imply that the story goes beyond the seizure itself.

The suit alleges that officials conferred with the California Horse Racing Board (CHRB) and the DOJ about the legality of offering certain bets on past races in addition to live ones, since 2024. These live bets were approved that year, but discussions around past races stretched all throughout 2025 with no clear outcome. Santa Anita communicated its intent to launch the machines to the board several times, including two instances in December.

“Neither the Attorney General’s office, nor the CHRB, ever disputed [the track’s] written legal analysis or stated that the [track] did not have the legal right to offer the 3X3 wager on concluded races,” the suit said, per the Los Angeles Times.

The machines offered $1 parimutuel “3X3” bets in which users picked three trifectas, a type of horse racing parlay predicting first, second and third place for a given race. Potential payouts differed based on the number of correct combinations, and the race data was from previously run contests held at non-California tracks. They were considered to be similar in nature to historical horse racing (HHR), which is legal in other states and also uses past racing data.

Unions back track, criticise Bonta

Santa Anita said it was not alerted about the seizure and was not served with a warrant. Instead, 21 DOJ personnel and two local police officers arrived at the track with a U-Haul truck. The only forms that were provided came after the seizure, Santa Anita said, with no receipt given for confiscated money.

In addition to the track, several local labour unions also jumped into the issue. On Wednesday, four unions – Service Employees International Union, Teamsters, State Association of Electrical Workers and the California Pipe Trades Council – sent a joint letter to Bonta decrying the seizure as “misguided” and “reckless”.

“By removing these terminals, your agency has introduced unnecessary uncertainty into an industry already confronting significant economic challenges,” the letter read, per the Times. “This decision undermines innovation, discourages investment and jeopardises the more than $1.7 billion in annual economic impact that California horse racing generates for local communities, workers and the state as a whole.”

The CHRB and Bonta’s office did not respond to requests for comment.

Tangled web of political spending

Bonta, who is up for reelection in 2026, has come under increased scrutiny for his perceived allegiance to state gaming tribes. In addition to the machine seizures, his office is also promulgating a series of rule changes for state card rooms that coincide with issues previously contested by tribes. That process is expected to be finalised by early April.

And last year, Bonta issued an opinion declaring essentially all forms of daily fantasy sports, another tribal friction point, illegal in the state. A state ban on sweepstakes gaming was also signed into law, although that came via legislation.

Bonta has been connected to more than $300,000 in career contributions from state gaming tribes, and his 2026 campaign account currently sits at $7.1 million in total funds, up from $6.7 million in October. Notably, the same unions that denounced the Santa Anita seizure have also been big contributors; SEIU alone kicked in more than $50,000 to Bonta’s campaign in 2025.

Santa Anita picking the wrong fight?

Since 2000, California tribes have owned exclusivity for Class III gaming, which includes traditional casino gaming and sports betting. In recent years, tribes have defended what they view as attempts to encroach on that exclusivity.

Their track record has been undeniable. In addition to the card room, DFS, and sweepstakes developments in 2025, Indian Country also soundly defeated Proposition 27 in 2022, an online sports betting initiative backed by commercial bookmakers. Total spending for and against Prop 27 reached $463 million, making it the most expensive state ballot fight in US history.

In the case of Santa Anita, the track contends that the “Racing on Demand” technology is not Class III because it is parimutuel, or peer-to-peer, wagering. Scott Daruty, the track’s senior vice president, told the OC Register that the machines “have never been in play anywhere else” and “were designed specifically for here”.

Based on a since-deleted X post from Win Wagering Systems, the machines were “engineered by the architects at” AmTote International and 1/ST Racing. The latter is owned by The Stronach Group, which also owns Santa Anita. AmTote, a pari-mutuel service provider, lists a number of partnerships with tribal entities, including the Cabazon Band of Mission Indians, Sycuan Casino Resort and Viejas Casino Resort.

The California Nations Indian Gaming Association did not respond to requests for comment for this story.

Victor Rocha, conference chair of the Indian Gaming Association, told the Times after the seizure that there “was always only one outcome out of this. They know it. I know it. Especially after what happened with sweepstakes and what’s currently happening with prediction markets.”

Growing threat of prediction markets

Speaking of prediction markets, the controversial financial exchanges emerged as perhaps the biggest challenge yet for California tribes. In addition to existing platforms like Kalshi and Polymarket, several commercial bookmakers and DFS companies also recently launched prediction markets in the Golden State. This includes FanDuel, DraftKings, Fanatics and PrizePicks.

Prediction markets have relied primarily on federal preemption, which in theory should be familiar to tribes. Tribal gaming matters mostly flow through the federal government, and the governing legislation, the Indian Gaming Regulatory Act, is a federal law. But tribes so far have had mixed legal results in suing prediction markets.

In November, the US District Court for the Northern District of California sided with Kalshi after three tribes filed suit to bar the platform from tribal lands. However, a contingent of tribal lawyers and interests known collectively as the “Tribal Amici” have been very successful in filing supplemental briefs in other suits around the country.

The platforms appear to be increasingly emboldened by the Commodity Futures Trading Commission, which has embraced the new technology under the Trump administration.

“Today, prediction market operators are exploiting a regulatory vacuum to push a sweeping, back-door expansion of gambling to every corner of the country, regardless of existing federal, state, and tribal laws. We need the CFTC to respect the longstanding authority of state and tribal governments to define, regulate, and oversee any gaming activities that take place within our borders,” James Siva, CNIGA chairman, said in a November statement.

Jess Marquez

Jess has covered the global gaming industry since 2022. A native of Reno, Nevada, he’d like to note that it’s Ne-va-da, not Ne-VAH-da.