Prop 27: Understanding The Online California Sports Betting Proposal

Written By

Updated on

Prop 27

Prop 27 is one of the two ways voters can legalize sports betting in California on this November‘s ballot.

Voters can legalize online California sportsbooks through a vote for Prop 27.

Prop 26, meanwhile, would legalize only retail sports betting at tribal casinos and horse tracks.

Quick hits on Prop 27

What is Prop 27?

The proposal would legalize online sports betting throughout California for certain qualified operators, as well as tribal casinos.

It is one of two options for legal California sports betting on the ballot this November. Prop 26 would legalize retail sports betting at tribal casinos and horse tracks.

In exchange for offering sports betting, operators would pay 10% of net revenue into two funds. The great majority, 85%, would go to help homelessness in California. The remaining 15% would go to tribes that do not offer online sports betting.

Who supports Prop 27?

There are seven organizations listed on the Yes on 27 website, including two tribes and the Sacramento Regional Coalition to End Homelessness.

The proposal also has support from various community leaders. That includes the mayors of Fresno, Long Beach, Oakland and Sacramento.

Who is behind Proposition 27?

There are seven main backers of Prop 27. They are all US sportsbook operators except for Fanatics, which has yet to launch:

What does Prop 27 do?

Unlike Prop 26, the online betting proposal allows betting on games involving California colleges. It also allows for betting on a “competitive event or novelty event,” which is not allowed in Prop 26.

Online licenses will be available to certain commercial operators as well as tribal operators, but they are not cheap. It costs $100 million for a five-year commercial license with a $10 million renewal fee. Tribal licenses run $10 million for five years and a $1 million renewal fee.

There could be a strong promotional environment in California beyond the initial launch. Prop 27 allows operators to deduct their promotional costs from taxable revenue. The proposition also prevents the online sports betting regulator created by the proposition to limit promotional credits distributed.

Who is funding Prop 27?

Through mid-September, the campaign behind online betting has gotten all of its $169.2 million in contributions from seven sportsbook operators:

When is Prop 27 vote?

California voters will get to vote for or against online sports betting and many other issues on Election Day November 8. Like many states, California will utilize an all-mail voting system that sends a ballot to the home of every registered voter in the Golden State weeks before the election.

When would Proposition 27 take effect?

Online sports betting would be available through multiple commercial operators by Aug. 29, 2023, if the proposal passes.

Prior to that date, any sportsbook claiming to offer legal sports betting within California is doing so illegally, in violation of federal law.