If California sports betting were a boxing match, both contestants have now made weight.
The California Secretary of State’s office announced Monday night it had verified a critical mass of the 1.6 million signatures backing the CA online sports betting measure.
Secretary of State Dr. Shirley Weber will officially certify the measure as qualified on Thursday. Subsequently, it will appear on the ballot in November, alongside a tribal sports betting measure.
Voters will see:
- Yes or no on tribal-backed, retail-only betting.
- Yes or no on the online sports betting measure backed by FanDuel, DraftKings and others.
Big prize for the state
Under the online measure, CA sports betting ops would pay a $100 million license fee up-front then a 10% tax on revenues.
Operators backing the initiative include:
- DraftKings
- FanDuel
- BetMGM
- Bally’s Interactive
- Fanatics
- Penn National Gaming
- WynnBET
Battle ahead
In total, operators have contributed $100 million to support the initiative’s passage. CA tribes have committed at least as much to blocking the measure.
“We are confident and look forward to the campaign ahead,” said Nathan Click, spokesperson for the online measure. “Voters continue to overwhelmingly support our initiative.
“It’s the only sports solutions that provides the states hundreds of millions of dollars each year in solutions to homelessness and mental health treatment.”
Who benefits in California?
Under the online proposition, 85% of tax revenue would go to homelessness and mental health. The remaining 15% would go to tribes not directly involved in sports betting.
Per analysis from the California Director of Finance, online sports betting could increase state revenues by “potentially mid-hundreds of millions of dollars annually.”
That said, the analysis noted that “some portion of these revenues would come from other existing state and local revenues.” The regulation of the market would also cost in the “mid tens of millions annually.”
What happens if both CA sports betting measures pass?
If both pass, sports betting will likely end up in court, where a judge would have to decide whether they are competing measures. If they are deemed competing, the one with the most affirmative votes would go into effect.
Tribes could argue they are competing measures, given the impact of online sports betting on retail betting revenues. That said, it is unlikely both will pass.
As sports law professor John Holden put it recently: “I think the chances of both passing are incredibly small. A ton of money spent will be spent, and I suspect that will result in neither measure getting enough support. Even if both measures pass this is going to be litigated to the ends of the earth.”
Opposition from tribal interests
CA tribes have argued the online initiative will increase problem gambling while funneling profits to out-of-state companies. Tribes also fear that online sports betting will open the door to online casino, which they believe could cut deeper into their brick-and-mortar properties.
The tribes also said their polling shows the public does not support widespread online gambling.
“It tells you everything you need to know that they didn’t just have an honest conversation with voters and ask ‘do you want to legalize online gambling?’” campaign spokesperson Brandon Castillo said recently. “They are masquerading as a homeless measure.
“They have wrapped this up with homelessness. But when you open it up, you still have a lump of coal, which is online gambling. As such, we are confident voters will figure this out. Our campaign also has plenty of resources.”
