Explosion of Donations Show Sportsbooks are All-in on California’s Prop 27 Sports Betting Referendum

When DraftKings, BetMGM, and FanDuel all pour millions of dollars into the same cause, you can be sure they have plenty at stake. When the three sports betting apps and several other similar platforms work on the same team as part of the most expensive ballot-initiative fight in U.S. history, it’s safe to say the potential windfall will be in the billions.

Californians have undergone a barrage of campaign ads in recent months as Native American tribes and sportsbooks battle over Prop 26 and Prop 27. With just under two months until the November 8 election, campaigns on both sides of the two issues have combined to spend over $400 million – tops for any state ballot issue ever. And the expenses will continue to climb in the weeks to come.

Prop 26, if passed, would legalize in-person sports betting for professional leagues at tribal casinos and at four horse racetracks: Santa Anita, Del Mar, Los Alamitos, and Golden Gate. It’s billed as a boon for Native American casino operators because it requires guests to show up in person if they wish to gamble.

Prop 27 would expand sports betting in California to online and app-based platforms like DraftKings, BetMGM, and FanDuel. It’d let Californians bet on events beyond sports, such as awards shows, anywhere on their computers and mobile devices.

Who Supports Prop 27? Why Do They Think They Can Win?

Polling on Prop 27 this month by the nonpartisan Public Policy Institute of California showed 54 percent of likely voters opposed the measure, while only 34 percent supported it. Twelve percent of respondents were undecided.

Why then would sportsbooks continue to donate to the campaign’s $170 million kitty? According to political pundits and scholars, because they still believe they can win.

“A 20-point deficit is incredibly difficult to overcome, but it’s not impossible,” said John Dadian, a San Diego-based attorney and California political pundit. “They obviously need to shift their message because so far what they’ve pitched hasn’t resonated with voters.”

Online Operators Eye Massive California Sports Betting Market

The industry estimates the legal betting market could be worth $2.5 to $3 billion in annual revenue if Prop 27 passes, contributing $300 million to $500 million in taxes to state coffers each year.

For sportsbooks, the donations show the price is worth the investment — even if they don’t win on their first try. Many people believe legalization is inevitable down the road, given the financial shot in the arm sports gaming would offer the state’s slumping economy.

Sacramento-based political consultant Steven Maviglio argued the profits of getting a favorable proposal passed will easily make up for the money sportsbooks pump into campaigning — during this election cycle and any in the future. Some 30 million adults over 21 call California home, according to the U.S. Census Bureau, and the Golden State welcomes over 200 million tourists each year.

“This is a long-term play that will handsomely pad the pockets of just about everyone involved if it passes,” Maviglio said.

Andrew Busch, a political science professor at Claremont McKenna College, said he wouldn’t rule out additional gaming industry donations for Prop 27 during the coming weeks. Even if the odds continue to slant against them, the sportsbooks have plenty of reason to be optimistic about their chances.

“There’s only been one major poll, and the probability exists that the poll wasn’t spot-on,” Busch said. “I expect the sportsbooks to go after this right up until the election.”

(AP Photo/Ross D. Franklin)

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