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Californians unlikely to sign off on legal sports betting

A recent poll showed Propositions 26 and 27, statewide ballot measures which would legalize sports betting in different ways, is likely headed to defeat in November.

(CN) — More than half the states in the country have legalized gambling on sporting events, in some capacity or another. California appears unlikely to join them any time soon.

In November, Californians will vote on two ballot measures that would legalize sports betting. Proposition 26 would allow in-person betting on sports at casinos on Native American land. Proposition 27 would legalize sports betting on online and mobile platforms, and assess a special tax on sportsbook revenue to pay for homeless housing and services.

A recent poll by the Berkeley Institute for Governmental Studies showed Proposition 26 behind by 11 points, and Proposition 27 losing badly, by 36 points.

The two measures have been the subject of nonstop advertisements, both on television and online, fueled by more than $400 million spent by various interest groups supporting and opposing the initiatives. Tribes have spent more than $200 million in support of Proposition 26, and in opposition to Proposition 27. Betting companies like FanDuel, DraftKings and BetMGM have contributed around $150 million in support of 27. A number of California cardrooms, quasi-casinos where card games like poker and blackjack are legal (but not slot machines, roulette or craps), and which would be shut out of the sports betting market if 26 passes, have given tens of thousands of dollars to the No on 26 campaign.

The Berkeley poll found that Californian's who hadn't seen the ads — and they must be vanishingly few at this point — were split on the two measures. But of those who had seen the commercials, most said they opposed both propositions.

"The advertising must be having a big impact on voters," said Mark DiCamillo, director of the Berkeley IGS poll.

Kathy Fairbanks, a spokesperson for the Yes on 26 and No on 27 campaigns, said the Native American tribes have focused on defeating Proposition 27, which she called "the far bigger threat."

"For the past 20-plus years, tribes have had the exclusive right to operate casinos in California," Fairbanks said. "Prop 27 would ultimately undercut tribes and their ability to remain self sufficient with their casinos."

She said that the many ads running for Proposition 27 may have confused voters into voting 'no' on both measures.

"When voters are confused, they just vote 'no' on everything," she said.

The Berkeley poll showed that Californians have a much higher opinion of Native American tribes than they do of online betting companies like DraftKings and FanDuel, which regularly advertise on televised sports games. Those are fairly new developments in American life, made possible in part by a 2018 Supreme Court decision which overturned a federal ban on legalizing sports betting for most states. Gambling in casinos on Native land, meanwhile, has been legal for 34 years, ever since President Ronald Reagan signed the Indian Gaming Regulatory Act in 1988.

"It was this bargain," said Thad Kousser, a political science professor at the University of California, San Diego. "We’re going to allow this activity that we may not want to have on every street corner, but in circumscribed areas, in a way that benefits a group that many people think has gotten a raw deal. Prop 27 would change that deal. There would be gambling everywhere, for the benefit of a few out-of-state corporations."

Online sports betting is legal in 25 states, including New York, where sportsbooks revenue is taxed at an eye-popping rate of 51%. Proposition 27, by contrast, would tax that revenue by 10%, though each company offering online betting in California would be assessed a one-time $100 million fee to be licensed, and another $10 million fee every five years.

"We think it’s a good thing," said Nathan Click, the Yes on 27 spokesperson. "If you want to access biggest market in the country, you have to put your money where your mouth is."

A report by the state's Legislative Analyst's Office said Proposition 27 would likely generate a few hundred million dollars in tax revenue. Proposition 26 would generate only tens of millions of dollars, according to the same office.

It's already fairly easy to bet on sports in California using any number of overseas-based websites — though withdrawing your money can be a bit cumbersome. Using these sites is technically illegal in the state, but it's a difficult rule to enforce.

"Taking on the illicit marketplace is one of the chief reasons to pass Prop 27," Click said. "They have no age verification, no problem gaming protections, and they're fundamentally unsafe enterprises."

Though a number of Native American tribes with large casinos have spent enormous sums of money to defeat Proposition 27, other tribes have stayed neutral, and three tribes support the measure.

"Our campaign is supported by a number of small tribes that are based in rural areas," Click said. "If you're based three hours from major metro area, they don't generate enough revenue from gaming to be able to provide for their people. By being able to offer online sports betting, they can finally realize the promise of tribal gaming."

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