California Legal Sports Betting Race Gets Complicated, Expensive

Written By Brett Gibbons on August 29, 2022
california legal sports betting

The battle to legalize sports betting in California is getting complicated. It’s also getting expensive as parties raise over $364 million to push their bills. Some tribes are partnering with operators like DraftKings Sportsbook and FanDuel Sportsbook while others are pushing legislation that keeps legal sports betting in tribal-owned California casinos only.

With November drawing nearer, the race is on.

California Legal Sports Betting: A Battle Between Two Propositions

It’s a two-horse race in the battle to legalize sports betting in California. Proposition 26 is the effort that would allow sports betting only in tribal casinos and horse tracks, backed by 29 individual, casino-owning tribes in the state. On the other hand, Proposition 27 would allow online sports betting by partnering operators with tribes.

Proposition 26: Tribal-Owned Casinos Only

The former legislation allows for individual tribes to negotiate a state tax rate. While more state-friendly (a portion of the revenue goes directly to the state fund), it would generate an estimated fraction of the possible revenue.

Proposition 26 bars online operators altogether. It also includes verbiage about craps and dice tables, unconnected altogether from sports betting. Tax revenue would go straight to the state fund as well as portions of it to fight gambling addiction.

What it doesn’t offer is any revenue for non-sports betting tribes.

Proposition 27: Online Sports Betting

A small number of tribes– namely those who do not own casinos– back Proposition 27 along with the major national operators like DraftKings, FanDuel, BetMGM, and others. The latter legislation is more in-line with what we’ve seen across many states to recently launch sports betting. California would tax the industry 10% and charge a $100M operator fee for each book in the state.

10% is a low-end tax rate comparatively, but the $100M fee would be unique to California. Of the collected tax revenue, 85% would go to fighting homelessness and gambling addictions while the other 15% would go to non-sports betting tribes.

According to a Bloomberg report, $42M was raised by card rooms in support of Proposition 27 because Proposition 26 makes it easier to sue the card rooms. In short, there’s plenty of underlying political drives with both bills.

Where Do The Voters Land?

Based on a February 2022 survey from the University of California at Berkley, voters aren’t completely sold on legalizing sports betting. In the survey, 22% of of Californians are reportedly “undecided” on the matter. Only 45% responded they would vote Yes.

Neither of these two bills aligns with what other states like Ohio and Kansas passed in 2022. Both offer tribal-only control while Proposition 26 continues a monopoly currently held by select casino-owning tribes.

The bills are due to be voted on in November.

Legal Sports Betting In California Gets Expensive

Local tribes and interested parties have fundraised a reported $364 million in this battle. That’s the most spent on any state to legalize sports betting. However, it’s not all to promote their own bills– as is common in modern politics, much of that money fundraised has gone to kill opposing bills. $66M – over 18% of the total – has been raised specifically to end Proposition 27.

With a little under three months remaining until voters hit the polls, the fundraising fight isn’t over.

Combining state voters as whole on the fence about even legalizing sports betting, messy legislation with outside motivators, and a complex web of fundraising, sports betting in California is far from a foregone conclusion.

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Brett Gibbons

Brett is an avid sports traveler and former Division-I football recruiter for Bowling Green and Texas State. He’s a graduate of BGSU and works as an auditor for Google content curation products. He’s also contributed to Sports Illustrated and Fansided during his young writing career.

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