Operation Sports Betting California is underway. California voters will have two sports betting ballot initiatives to vote on. One is Prop 26, which would allow in-person sports betting at tribal casinos. The other is Prop 27, which would allow mobile sports betting run by private sportsbook companies, like DraftKings, FanDuel, and BetMGM.
Both groups want to control California’s sports betting industry. California is the most populous state, which gives it the highest sports betting revenue potential in the United States. (Whether its policies maximize that potential is another matter.) California sports betting is a cash cow that every gambling company wants a controlling share of.
The attack ads reflect the stakes of capturing sports betting market share in California. Ads attacking Prop 27 claim that it’s a threat to tribal sovereignty and will “turn every electronic device…into a gambling device.” The pressure intensified when the California Democratic Party formally opposed Prop 27 and remained neutral on Prop 26.
The Prop 27 campaign has mostly been playing defense. It has emphasized the revenue private companies will share with non-gaming tribes. Prop 27 ads also highlight the partnerships companies will form with gaming tribes so they’re not left out of the new sports betting industry.
Both campaigns have a few misleading claims in their ads and on their sites. Here are the highlights.
Tribal Attacks Against Private Sports Betting
Tribal attack ads advance two misleading claims:
- Private sports betting threatens tribal sovereignty.
- Private sports betting will expose children to gambling.
Claims about Tribal Sovereignty
Tribal sovereignty is the ability of tribes to self-govern, and several issues threaten it. Checkerboarding tribal land makes it harder for tribes to develop key economic areas. Federal land restrictions make it harder for tribes to lease land for businesses to operate long-term. That discourages private companies from investing in tribal areas and further stunts economic growth. Alarmingly, climate change has forced the Quileute Tribe in Washington to move its village due to rising sea levels.
So, California Democrats who claim to be concerned about tribal sovereignty have harder issues to tackle than sports betting. Losing a near-monopoly on gambling would be a threat to tribal sovereignty if casino gambling was the main revenue source for California’s gambling tribes.
However, even the most successful California gambling tribes can only pay so much money out to tribe members. California tribes pay casino revenue into a fund that limits tribal casino payouts to $1.1 million per year to tribes without gambling compacts.
For small wealthy tribes, that can be a financially viable arrangement. But for many tribes with populations in the tens of thousands, casinos are an insufficient source of funding. Grants and contracts from state and federal governments can do a better job of providing jobs and revenue on many reservations than casinos.
Additionally, since sports betting revenue is lower than retail revenue in other markets, gaming tribes still hold many of the cards. Tribal casinos will still be the only places that can offer casino games in California. Even if private companies take over the sports betting industry, tribal casinos will retain control over the most profitable parts of the gambling industry.
Children and Online Gambling
Online sportsbooks are good at preventing underage bettors from signing up for accounts. Instead of selecting a bogus birthdate, bettors must provide part of their social security numbers and possibly government IDs or utility bills to confirm their identities.
These requirements come from the Patriot Act and Bank Secrecy Acts. These laws impose the same know-your-customer requirements on online gambling companies that banks follow to keep terrorists from laundering money. (It’s a legal technicality rather than by design.)
That’s why states with online sports betting haven’t recorded widespread cases of children placing sports wagers. So, a child’s smart phone or tablet won’t become a tiny online casino if online sportsbooks become available.
The tribal attack ads improve their arguments when they point out the increase in problem gambling that comes from online sports betting. States with legal online gambling report increases in problem gambling calls to state helplines. That’s why building a robust safety net for vulnerable gamblers is critical for a modern sports betting industry.
But sportsbooks also provide self-exclusion options. Bettors can log into their accounts and lock themselves out of their accounts for weeks, months, or years at a time. They can also set money and time budgets to limit their gambling. These are great proactive features for sportsbooks to provide. However, by the time someone becomes a problem gambler, they require treatment rather than proactive steps alone.
If Californians legalize online sports betting, they’ll need to maintain pressure on elected officials to properly fund and allocate resources to ensure Gamblers Anonymous chapters and problem gambling treatments are available.
Private Companies on the Defense
The online sportsbook initiative has a section on its site that partially refutes attack ad claims against it. However, it engages in two rhetorical slights of hand.
The Prop 27 site falsely claims that the tribal initiative doesn’t provide funding for problem gambling services. Prop 26 actually allocates part of the tax revenue for problem gambling and mental health programs.
Second, the Prop 27 site falsely claims that tribal sportsbooks wouldn’t have age verification or cooperation with law enforcement. The tribal initiative requires bettors to be at least 21. Anyone who’s been to a California casino knows that tribal casinos check IDs. They have every interest in running legitimate businesses to continue attracting Californians and avoid conflicts with state police.
Tribal and state police also have agreements in place that allow areas of cooperation. These include MOUs that share educational resources between state and tribal law enforcement. Historically, state and tribal police have also cooperated on investigations into crimes like domestic violence.
In gambling, California has tribal-state compacts with each tribe that offers gambling. These compacts regulate tribal gaming in California. Across many issues, state and tribal police are more than capable of cooperating. Suggesting otherwise is an insult to tribal communities.
Operation Sports Betting California Promises Conflict
This election cycle, California voters will decide what sports betting will look like in their state. Sports betting will either be in person at tribal casinos or online on privatley-owned apps. Tribal and commercial interests are battling for control over this lucrative gambling expansion.
So, California voters must be vigilant in the months leading up to the California midterms. Supporters of Prop 26 and Prop 27 are ramping up the rhetoric against the opposing side. Tribal ads largely appeal to tribal sovereignty and the threat that gambling poses to children. Commercial ads largely defend themselves from these claims, but subtly denigrate tribal communities.
Operation Sports Betting California promises to be highly coordinated and vicious. So, California bettors must do the hard work of keeping themselves from getting caught up in inflammatory rhetoric.