California voters will likely have at least two sports betting proposals on the November ballot. An initiative legalizing online sports betting in the Golden State gathered 1.6 million signatures, far more than the number needed. That sets up a showdown with an already-approved initiative to legalize retail sports betting at tribal casinos and select racetracks.
A third proposal backed by California cardrooms failed to meet the signature threshold. A fourth proposal seeking to legalize mobile sports betting through tribal casinos has until July 11 to garner enough signatures. That measure is backed by a trio of California tribes, San Manuel Band of Mission Indians, Wilton Rancheria and Rincon Band of Luiseño Indians.
The competing proposals are expected to create one of California’s most expensive ballot campaigns. Tribes will be up against national and international sports betting operators, and if the online tribal proposal collects enough signatures, tribes will go against tribes. It’s worth noting that voters could approve multiple sports betting initiatives.
That advertising blitz is already being felt. As reported by Wagers.com:
National advertising powerhouse Viamedia reported a 3,399% increase in California political ads versus Q1 2018. A Viamedia press release attributes the rise in political ad spending to “an explosion of issues spending around climate change and gambling.”
Too Many Cooks Spoil the Soup
What multiple initiatives would mean at the ballot box was a hot topic at the recently concluded Indian Gaming Association tradeshow in Anaheim, California. The consensus view was that should all three measures make the ballot; all three would fail, per Howard Stutz of the Nevada Independent.
“I think it’s a small, small possibility they all pass,” James Siva, vice chairman of the Morongo Band of Mission Indians and chairman of the California Nations Indian Gaming Association (CNIGA), said. “I think it’s much more likely that all three ultimately fail because of voter confusion.”
Both sides have pointed to polling data showing Californians favor their proposal (here, here, and here), but voter confusion is the most likely outcome, as Siva notes. People interested in the issue will vote for their preferred model. Voters with a passing understanding of the topic will vote on a lark.
And, of course, those opposed to gambling will vote no on all of the initiatives.
Who Is Behind the Online Betting Initiative?
The online betting initiative is dubbed the Californians for Solutions to Homelessness and Mental Health Support and has the support of no less than seven national sports betting operators:
- Bally’s
- BetMGM
- DraftKings
- Fanatics
- FanDuel
- Penn National
- Wynn
The coalition has already contributed $100 million to the effort and is ready to spend another $100 million.
The biggest sportsbook financers of the California online sports betting measure are FanDuel, DraftKings & BetMGM, all of which have contributed more than $16 million to the campaign. Bally's, Barstool (Penn National), WynnBet & Fanatics have all contributed more than $12 million
— Ryan Butler (@ButlerBets) May 3, 2022
The measure places significant barriers to entry in California:
- A $100 million up-front licensing fee
- Prospective licensees must possess licenses in at least ten states
The Tribal Sports Betting Proposal
The tribal sports betting proposal, bearing the title, Coalition to Authorize Regulated Sports Wagering, is backed by 18 tribes, including the Agua Caliente Band of Cahuilla Indians, the Yocha Dehe Wintun Nation, and the Pechanga Band of Luiseño Indians.
The measure would legalize retail sports betting at tribal casinos (pending compact renegotiations) and at horse racing tracks. The proposal also allows tribal casinos to add some currently prohibited Las Vegas-style casino games like craps and roulette.
The tribal effort came with a price tag of $11 million (a bargain compared to the $100 million sportsbooks spent), but the tribes are willing to match the spending of the commercial sportsbooks to get their initiative approved by voters while at the same time, sinking the mobile betting effort.
Look to the Past to See the Future
California is no stranger to gambling disputes. The state attempted to legalize online poker for nearly a decade before throwing in the towel. And as we see in the sports betting debate, there are shifting coalitions, and numerous stakeholders are trying to steer the ship.
Veterans of the California online poker wars are also aware of the ‘my way or the highway’ mentality of the state’s key stakeholders. Many are more than willing to watch sports betting go down in flames rather than compromise on their principles.
The most important principle for tribes is something the sportsbook-backed proposal would dismantle.
“The tribes have exclusivity in California, and this is very rare to have that level of control over this particular industry, as compared to the rest of the states,” Victor Rocha, chairman of the IGA conference and a member of the Pechanga Band of Luiseño Mission Indians said during the panel discussion.
