Insiders Doubt CA Prop 26, Prop 27 Pass: ‘It Doesn’t Look Good’

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Prop 27

Pessimism persists surrounding the passage of sports betting measures Prop 26 and Prop 27 on the November ballot in California.

Both sides have pumped in millions of dollars in a broadcast battle that is increasingly expected to yield an 0-for-2 result.

“It doesn’t look good,” one industry insider told LSR. “It seems like both are going to meet the same fate.”

Outside poll: little support for Prop 27

Earlier this month, an independent poll showed only 34% of CA voters would vote yes on sportsbook-backed Prop 27, which would bring legal online sports betting to the state.

That led to an eye-opening San Francisco Chronicle report stating Yes on 27 was pulling its television advertising in major CA markets.

“I don’t know if the operators would admit defeat or even say that they were retreating, but I would not bet on Prop 27 passing at this point,” the insider said.

Prop 26 victory would be Prop 27 failure

Tribal-backed Prop 26 seemingly also is unlikely to pass.

That measure would bring legal retail sports betting to the state via tribal casinos.

“I don’t even think they’re pushing ‘yes,’ on that,” a second industry insider said. “And even if they are, sports betting isn’t even the important part of that prop.”

Prop 26 would legalize roulette and craps at tribal casinos, in addition to adding a legal mechanism for tribes to sue cardrooms.

Tribal perspective from conference chair

Victor Rocha, conference chairman of the Indian Gaming Association, essentially confirmed as much in a recent Twitter thread.

“The California gaming tribes will continue to stick together,” Rocha wrote. “A victory in November strengthens that bond. What is a victory? Prop 27 fails at the ballot box.

“For us, the sports betting consortium represents the new face of colonization. Instead of land, water & minerals, they’re coming for our casinos. That’s why we fight like it’s our last fight.”

Mixed messaging from both sides draws criticism

A criticism that has persisted in the multi-million broadcasting battle between Prop 26 and Prop 27 is mixed messaging.

Advertising centers on homelessness funding and tribal sovereignty, with little mention of sports betting.

Gary Painter, executive director of the USC Homelessness Policy Research Institute, told PlayCA that Prop 27 is viewed in homeless services circles as a fight over CA online gaming.

Painter: Prop 27’s projected impact minimal

As per Prop 27, 85% of annual tax revenues would go to homelessness. PlayCA projects Prop 27 could generate $200 million annually, or $170 million toward homelessness. The state, meanwhile, has spent $10 billion on housing and homelessness.

“If we’re talking about $200 million, it’s not that large relative to what we’re already doing,” Painter said. “We need more resources, to be clear. We don’t have enough interim housing, shelter or permanent housing resources. So, in that sense, $200 million, it will help.

“But with the scope of the problem and the set of solutions, it’s certainly not sufficient.”

What Prop 26, 27 ‘no’ votes mean

Ultimately, it all may lead to a pair of no votes.

“I don’t think anybody believes either side,” a second insider said. “You’re not going to solve homelessness, and this isn’t really about protecting tribal sovereignty.”

A pair of no votes would mean both sides would have to go back to the drawing board for 2023.

Difficult to find pathway to compromise

At this point, a compromise solution is difficult to envision. The tribes have significant political power in CA and their relationship with the sports betting operators is fractured.

“I don’t know what the pathway is for DraftKings and FanDuel,” the second insider said. “I’m certain they’ve made headway with some tribes. But have they made headway with the tribes that matter? San Manuel, Morongo, Pechanga, Sycaun …

“Maybe there’s a legislative solution in 2023, but you don’t do that unless the tribes are completely on board, and I don’t know what that looks like at this moment.”

As Rocha tweeted:

“How do we move forward? The sports betting consortium needs to realize they’re subservient to the tribal vision of gambling in California. That’s a hard pill to swallow for a certain mindset. They’re used to breaking everything.”