Major League Baseball came out in support of Proposition 27, which if passed this November would legalize online sports betting in California, the world’s fifth-largest economy.
Endorsements are sort of like kisses: nice, but it depends who gives them. In this case, MLB’s stamp of approval of Prop 27 is a boost to supporters of the measure in the state. Voters also have the option to vote yes on Prop 26, a competing measure supported by at least 80 Native American tribes that would allow sports betting, but under much different circumstances.
Tellingly, MLB did not mention Prop 26 in its release, which went out to media outlets via MLB Press Box.
“As legalized sports betting continues to expand across the country, Major League Baseball remains committed to protecting the integrity of its games and creating a safe experience for fans who wish to wager on those games,” MLB said in a statement released on Friday. “Proposition 27 –– the only measure on California’s upcoming ballot that would authorize and regulate online sports betting –– includes strong integrity provisions designed to help MLB carry out those commitments.”
Voters in California will go to the polls on November 8 to decide the fate of both Prop 26 and Prop 27.
MLB Cites Safety in Support of Prop 27
In 2018, when the US Supreme struck down PASPA, the federal ban on state authorization of sports betting, it cleared the way for states to pass laws to make the activity legal. But even before that, MLB was eyeing the impact of expanded sports betting on its product.
In 2017, MLB Commissioner Rob Manfred said, “If there’s going to be a change in the regulatory structure with respects to sports gambling, we needed to be in a position to meaningfully engage and shape, try to shape what the new regulatory scheme looks like.”
By 2021, the league had authorized sportsbooks (once they were approved by MLB) to enter into partnerships with teams. In September 2021, the Detroit Tigers became the first team to sign a sponsorship deal with a sportsbook (PointsBet). More than a dozen MLB teams now have official sports betting partners, and broadcast partners now show odds before, during, and after game broadcasts.
California is MLB’s biggest market, and there are several reasons Manfred views Prop 27 as crucial. Two of MLB’s betting partners, DraftKings and FanDuel, have been instrumental in the development of Prop 27, and have placed the strength of their brands behind its passage. Baseball has five teams in California (Dodgers, Giants, Angels, A’s, and Padres), and many of the best American-born players in the league come from the Golden State.
But while baseball has begun to embrace sports betting as a legitimate revenue stream, it contends that fans are at the heart of its policies. Prop 27, MLB says, is the best way to launch sports betting in California.
“The measure would, for example, (1) require sportsbook operators to notify leagues of suspicious wagering activity, (2) allow leagues to propose restrictions on betting markets that are particularly susceptible to manipulation, and (3) facilitate other forms of integrity-related cooperation between the state, leagues, and operators,” MLB said in its statement.
MLB also went on to mention illegal betting, which poses dangers to the consumer.
“MLB believes that Prop 27 has the safeguards to create a safe and responsible online sports betting market in California –– a state with millions of MLB fans looking for alternatives to illegal offshore betting sites.”
The public support of Prop 27 by MLB illustrates the motivation by supporters of both propositions. Reportedly, tens of millions of dollars have been spent in the state to market both Prop 27 and 26.
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What are the Differences Between Prop 26 and 27?
The major differences between the two propositions are:
- Prop 26 WILL NOT allow mobile sports betting, It provides for retail sports wagering only, specifically at tribal casinos and four horse racing tracks.
- Prop 26 will use tax revenues from sports betting this way: 15% Problem Gambling Programs, 15% Gambling Policy Enforcement, and 70% California General Fund.
- Prop 27 DOES ALLOW mobile sports betting.
- Prop 27 will spend 85% of tax dollars on Affordable Housing, and 15% will go to Tribes that don’t participate in online sports betting.
Both propositions on the ballot in November call for a 10% tax rate on gross revenue.
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