California Sports Betting to go before voters in November

July 11, 2022 Gambling regulation changes

Of all of the states to have legalized or in some way facilitated online betting since the 2018 Supreme Court decision empowering states to do so, it may have come as a surprise to many that California was not one. As weeks go by and new information comes out about state legislatures’ decisions on the issue, California’s house and senate have kept their powder dry. Now, we have the key information on online betting in the Golden State: it’s going to be put in the hands of voters at this Fall’s elections.

Two propositions will be placed on the ballot this November 8. The first, Proposition 26, would see sports betting legalized at tribal casinos and thoroughbred racetracks in the state. Prop 27, meanwhile, would if passed see the state follow in the footsteps of several East Coast legislatures and legalize sports betting through online sportsbooks and apps.

As things stand, it is too early to predict how voters will respond to these propositions, but it may be instructive to look at which groups are backing which measures. A fillip has been given to Prop 26, on which congressional Democrats have decided to abstain from giving a recommendation. Democrats outnumber Republicans on the state legislature by a margin of 2 to 1. If their advice is any guide to how voters will move, their rejection of Prop 27 hints that the earlier proposition has the greater chance of gaining support ahead of November.

Both propositions are subject to a great deal of claim and counter-claim at this stage. Tribal authorities are, in the main, supportive of Prop 26, which they say would keep profits and tax revenue from any betting in the state of California, while Prop 27 would allow “out-of-state interests” to control gambling provision. Supporters of Prop 27 point to the figure of 85% of tax revenue from betting which has been ringfenced to provide support for mental health services and the homeless. They also highlight that tribal authorities could access licences for betting provision for the price of $10 million, a fraction of the $100 million it will cost anyone else.

As we have seen in other states, the potential outcomes of these bills are set to raise a certain amount of controversy. Legalized betting does stand to raise a great deal of revenue for any state in which it is introduced, but how and where that revenue is allocated is a thornier subject.

Both sides, on both bills, will certainly have the chance and the funding to make their case between now and the second week of November. Prop 27 is understood to have received $100million in financial backing from large sportsbook providers and vocal support from some smaller tribal nations. The groups that stand against have raised just over a third of that amount, but have received the backing of the state’s largest political party. In the absence of polling numbers for these freshly-introduced propositions, we are left with guesswork to figure out which has the best chance of passing.

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