California sports betting will be on the ballot in 2022 with at least one and likely two measures going before the voters for referendum.
A group behind a third measure still in the signature collecting phase has opted to step aside and hopes to be the only game in town come 2024. This means Californians may not be done with the issue in the fall.
“With the ongoing collapse of support for the FanDuel/DraftKings online sports betting measure and the effectiveness of our recent ads, our strategists have recommended that there is a better path for victory in 2024,” Rob Stutzman, spokesman for the Protect Tribal Sovereignty and Safe Gaming group, told Gaming Today.
A Different Tribal Measure Already On 2022 Ballot
With a population of more than 39.3 million people, California is considered the holy grail for the sports betting industry. Under existing state law, all gaming is run through the tribes.
In May 2021, tribal interests secured enough signatures to ask voters to authorize retail sports betting at the state’s tribal-run casinos.
“Let’s take it slow. Let’s get it right.” Cody Martinez, chairman of the Sycuan Band of the Kumeyaay Nation, recently told CBS8 in San Diego.
Martinez and a slew of other tribal leaders in the state are backing the ‘California Sports Wagering Regulation and Unlawful Gambling and Enforcement Act,’ also known as the ‘Tribal Sports Wagering Act.’
This proposal, which has the support of various civic groups, would restrict sports betting to brick-and-mortar facilities. This would include the more than 60 tribal-run casinos, as well as select horse race tracks throughout the state.
Advocates argue this is the best approach because it ensures those under 21 won’t be exposed. Additionally, by limiting sports betting to existing casinos, foot traffic would increase and provide an economic boost to the community.
“For more than 20 years, California voters have entrusted Indian tribes with the right to operate highly regulated casinos on their tribal lands, helping promote Indian self-sufficiency while generating tens of thousands of jobs and tens of billions in economic opportunity for California’s economy,” backers say on their advocacy page.
“To build on this legacy, the Coalition for Safe, Responsible Gaming, led by California Indian Tribes, has formed to urge a YES vote on the Tribal Sports Wagering Act ... which will authorize highly regulated in-person sports wagering at tribal casinos.”
The tax rate for sports bets at race tracks would be set at 10%. Wagers would be legal on professional and collegiate athletics, except for those games involving California schools.
Sportsbooks Are Behind A Different (Likely) Ballot Question
Earlier this month, backers of a proposal to bring online sports betting to the state announced they had submitted more than 1.6 million signatures to the Secretary of State’s office for review. The state has until June 30 to verify 997,139, the minimum for the initiative to be placed on the ballot.
Most experts expect the signatures to be approved.
This measure, formally known as the California Solutions to Homelessness and Mental Health Act, would dedicate the vast majority of tax revenue (85%) toward funding homelessness and mental health issues in the state. It would give 15% of tax revenue toward non-gaming tribes.
Sportsbooks would be required to partner with gaming tribes in the state. They would pay an application fee and have a subsequent renewal fee of $1 million.
A legislative review of the measure estimated that if approved the state stands to gain hundreds of millions of dollars annually. Some have estimated that when all is said and done, mobile sports betting in California could mean $3.5 billion in annual revenue for sportsbook operators.
Beyond taxing that revenue, another way the state would earn money is from the large application fees sportsbooks would pay the state: $100 million. This would essentially block smaller competitors from a shot at offering online wagering.
Ironically, estimates about the referendum speculate DraftKings and FanDuel will spend upwards of $100 million on advocating for their proposal between now and November.
Lukewarm Support And Strong Opposition For Both Measures
The most recent public poll on the issue of sports betting, released by the Los Angeles Times and the University of California in February showed support for sports betting at under 50%.
Stutzman’s group is behind a series of ads against the sportsbook-backed proposal in the state.
In one of the ads, two Native Americans tell the audience the sportsbook question is bad for the state, especially the tribes.
“Join us and protect the promise,” Glenda Nelson and Jesus Tarango say, noting DraftKings and FanDuel are “out of state corporations” that do not have the best interests of Californians at heart. They broadcast in big letters the home towns of each company as Boston and New York.
https://www.youtube.com/watch?v=mPBi_GoN-vA
Polling done for the 2024 tribal initiative indicates support for the 2022 question has plummeted since the ads started airing.
“Our polling demonstrates the FanDuel/DraftKings ballot measure faces very strong headwinds and is unlikely to be passed by California voters,” reported an analysis by the Mellman Group, a national polling firm.
Some, however, have questioned the results of the polling.
According to the data, support for the 2022 measure dropped from 40% to 34% once the ads started running. Opposition grew from 41% to 45%.
What Happens If Both Initiatives Pass?
There is no clear answer as to what happens if both the sportsbook and the retail-only proposition pass in November.
The Wall Street Journal reported last month there is a question of whether or not the outcome would then wind up in the courts. Other experts have predicted the state would go with the question that received the most votes.
Stutzman would not answer the question of what this would mean for his group. They are focusing squarely on their efforts to defeat the major online sports betting question this year, he said.
The one thing that is certain is California voters will be inundated with ads pro and con for both ballot questions in the fall. Experts have predicted it could be the most expensive election in California history.
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