Two multimillion-dollar ballot measure battles will shape the future of the billion-dollar sports betting industry in California. Committees reported raising nearly $243.8 million through June 30 to support or oppose Propositions 26 and 27, two ballot measures that could legalize sports betting in California, according to OpenSecrets’ analysis of a new dataset tracking ballot measures across the country.
Thirty-six states and the District of Columbia have legalized sports betting in some form since the Supreme Court overturned a federal ban in 2018. California is currently the only state to consider a ballot measure or legislation to legalize sports betting, according to the American Gaming Association.
Proposition 27, a ballot measure that could amend the California constitution to legalize online and mobile sports betting outside tribal lands, has attracted more than $202.6 million in contributions to support or oppose its passage. Over $61.5 million of that total was raised by a committee both opposing Proposition 27 and supporting Proposition 26, which would legalize in-person-only sports betting at race tracks and Native American casinos. Another committee raised over $41.1 million to oppose Proposition 26.
Sports betting surpassed Proposition 22, which classified app-based drivers as independent contractors rather than employees or agents at those companies in 2020, as the costliest ballot measure campaign in the state’s reported history. Rideshare and delivery companies including Uber, DoorDash and Lyft poured over $205 million into “Yes on 22,” a self-described “coalition of on-demand drivers and platforms, small businesses, public safety and community organizers.”
Over 58 Native American tribes, both the California Democratic and Republican Parties, and several education organizations oppose Proposition 27, Gaming Today reported. Online betting companies and organizations supporting the homeless are the ballot measure’s main supporters.
Californians for Solutions to Homelessness and Mental Health Support, the so-called “Yes on 27” committee, reported receiving over $100 million from seven online betting giants on Aug. 30 and 31, 2021. Online betting giants DraftKings, BetMGM (owned by MGM Resorts) and FanDuel contributed nearly $16.7 million each to the coalition. FBG Enterprises (doing business as Fanatics Sportsbooks), Bally’s Interactive, Penn Interactive and WSI contributed an additional $12.5 million each.
Despite being funded by big names in online and mobile gambling, Yes on 27 is composed of organizations dedicated to supporting homeless people including the San Diego Regional Task Force on Homelessness, Bay Area Community Services and Sacramento Coalition to End Homelessness.
Yes on 27’s ads also prominently feature tribes shut out of the tribal casino industry concentrated near large metropolitan centers. Jose Moke Simon III, chairman of the Middletown Rancheria of Pomo Indians of California, narrates the coalition ads, which feature members of his community. These tribes are potential partners for online betting platforms – a provision mandated in Proposition 27, which states “These companies must partner with a tribe with a tribal-state compact.”
“Only one proposition supports California tribes like ours,” Simon said in one Yes on 27 ads. Another coalition-sponsored ad claims Proposition 27 provides “permanent solutions to homelessness, mental health and addiction in California.”
But the Yes on 27 ads are “spectacularly misleading,” Los Angeles Times business columnist Michael Hiltzik warned, claiming the ballot measure could harm California’s fiscal and public health.
Sports bettors are twice as likely as general bettors to develop gambling problems, according to the National Council on Public Gambling. Significant advances in technology make it easier to gamble online, a potential public health risk, researchers at McGill University and the Oregon Research Institute found.
While online sports gambling could bring in as much as $500 million in state revenue each year for homelessness projects and gambling addiction programs, Hiltzik argues the latter addresses “a problem of its own making.”
But the coalition states there is already a “massive illegal, illicit online sports betting market” in place – online platforms could be a safe, legal alternative to protect bettors.
It is technically possible for both Proposition 26 and 27 to pass this fall. But the Coalition to Authorize Regulated Sports Wagering raised over $61.5 million to support Proposition 26 and oppose Proposition 27, OpenSecrets’ analysis of the new data found.
The “Yes on 26, No on 27” coalition is sponsored by California Native American gaming tribes and composed of several prominent community and political organizations. The coalition asserts Proposition 26 will boost tribal self-sufficiency, provide high paying jobs to Californians and generate tens of millions of dollars revenue for the state, while arguing Proposition 27 will hurt tribes, short-change state priorities and expose kids and citizens to problem gambling.
“Our measure represents a responsible, incremental approach to allowing sports wagering in California without the risks of opening up every connected device to online gambling,” said Tribal Chairman Kenneth Kahn of the Santa Ynez Band of Chumash Indians, which supports Proposition 26. Chumash Casino and Resort Enterprises contributed $5 million to the Coalition to Authorize Regulated Sports Wagering.
The Yes on 26, No on 27 coalition received significant support from some tribal organizations including nearly $15.3 million from the Pechanga Band of Luiseno Mission Indians, $15.1 million from the Yocha Dehe Wintun Nation and almost $10.3 million from the Agua Caliente Band of Cahuilla Indians.
Californians for Tribal Sovereignty and Safe Gaming, another committee sponsored by larger tribal organizations, raised $41.1 million to oppose Proposition 27. San Manuel Band of Mission Indians, which owns the Yaamava’ Resort and Casino 60 minutes from Los Angeles, contributed $28 million, the “No on 27” committee’s largest donation so far this election cycle.
Taxpayers Against Special Interest Monopolies, a coalition of licensed card clubs, raised over $41.1 million to oppose Proposition 26. Key players in the “No on 26” coalition include the California Commerce Club and Hawaiian Gardens Casino, which each contributed nearly $10.1 million to the coalition.
No on 26 argues Proposition 26 would give some large tribal organizations – “some of the wealthiest and most powerful special interests in the state,” they argue – monopolistic power to push card clubs like themselves out of the market.
Proposition 26 would allow tribal casinos to sue gambling groups that violate state law. But Mary-Beth Moylan, the associate dean for Academic Affairs at the McGeorge School of Law, called the argument that Proposition 26 would force cardrooms out of business with a flood of meritless lawsuits misleading.
“Everyone, the tribes that might be bringing the suits and the cardrooms that would be defending them, have plenty of resources to have attorneys to meet out whether they are meritless or not. I do think this is an unfounded fear, even though it is partially true that there will be likely more lawsuits,” she told KCRA.
Isaac Hale, an assistant professor of politics at Occidental College, echoed the sentiment, noting that “there is no independent analysis suggesting that Proposition 26 will put law-abiding cardrooms out of business.”