A measure by online gaming operators based outside of California has gathered 1.6 million signatures, which should be enough to qualify it for the November ballot.
One million signatures are required to put a measure on the ballot. Some of the operators backing the measure are FanDuel, DraftKings and BetMGM.
It becomes the second sportsbook measure to qualify for this year’s ballot. The first is sponsored by a consortium of gaming tribes who only want retail sports book at tribal casinos and the state’s four racetracks.
The operators’ measure, which the tribes oppose, doesn’t clash with their measure. They claim it complements it by allowing online sports betting, but only tethered to tribal casinos.
As the largest state in population, the Golden State is the Golden Apple of sports betting markets, 39 million, compared to the next largest sports betting marketplace, New York, with 19 million. It could be worth as much as $3.5 billion annually say some experts. Peter Schoenke, a board member of the Fantasy Sports and Gaming Association calls the California market “the holy grail.”
In a tip-of-the-hat to California’s biggest issue, homelessness, the measure, called the California Solutions to Homelessness and Mental Health Act, would set aside 85 percent of its tax revenues for homelessness and mental health support. The rest would go to tribes that don’t take part in the market. The online activity would be taxed at 10 percent.
The proponents, Californians for Solutions to Homelessness and Mental Health Support, claim this would raise $500 million annually. Nathan Click, their spokesman, commented, “This is the state’s No. 1 need, its greatest humanitarian challenge, and right now there is no permanent revenue source for housing and the services required to help elevator people out of homelessness.”
To become law, the rival measures each need 50 percent plus one vote, to pass.
It is already certain that hundreds of millions of dollars, and perhaps as much as $1 billion will be spent by the sides—the campaign could be the largest in the state’s history. The tribal campaign has already started to target the sportsbook operators with TV ad saying measure would make it easy for youth to bet using their parents’ accounts.
The online proponents argue that facial recognition software and background checks will protect against this problem.
The online measure is supported by some homeless advocates. Tamera Kohler, CEO of the Regional Task Force on Homelessness San Diego, issued a statement: “These states are using this revenue to solve big challenges. California should be next.”
Fresno Mayor Jerry Dyer, added, “This ballot measure would give cities like Fresno a guaranteed funding source to address homelessness.” He added, “To truly solve this critical issue and give those most vulnerable among us the housing, mental health and addiction treatment they need, there must be an ongoing revenue stream. This initiative would do just that.” If passed, it could go “live” as early as next January.
Dyer’s endorsement has also drawn fire in the form of TV and online ads. One declared, “Mayor Dyer: Please protect our kids! Reject the Corporate Online Gambling Proposition.”
A major criticism of the operators’ measure is the large fee for a sports betting license, $100 million. Gaming companies also must be licensed in 10 states or operate in five states and run 12 casinos. Critics say that would effectively lock out all but the largest operators.
To compare, New York, to date the most expensive, charges a $25 million licensing fee.
The high fees do not apply to tribes, who would pay a one-time $10 million license fee, renewable every five years for $1 million.
The measure would also create a new division within the state’s Department of Justice to regulate online sportsbook.
The two measures are not the only ones active. Another tribal backed coalition (but a different one), called Californians for Tribal Sovereignty and Safe Gaming, would allow tribes to exclusively offer sports betting at brick and mortar casinos, and online. The measure is supported by three tribes: the San Manuel Band of Mission Indians, the Rincon Band of Luisueño Indians, and Wilton Rancheria.
Tribal ads are pushing the narrative that tribes should exclusively control sports betting because they have been reliable caretakers of gaming for more than 20 years.
A recent University of California poll showed 45 percent of voters support amending the constitution to allow sports betting, with 33 percent opposed and 22 percent undecided.
