Now that the dust has settled in California after Prop 26 and Prop 27 both went down to a stunning defeat, sportsbooks will still push for legalization of sports betting, hopefully with support of the tribal nations in the state.
“Our coalition knew that passing Prop 27 would be an uphill climb, and we remain committed to California,” a supporter of Prop 27 told Yahoo Finance in a statement.
Proposition 26 allowed in-person sports gambling on tribal lands and horse racing tracks while Proposition 27 would open permit mobile betting.
“We have to respect the will of the voters,” Jacob Mejia, the Pechanga Band of Indians vice president for public affairs, told Yahoo Finance leading into the election. “We have to discern what they’re saying. To many of us, they’re confirming what we’ve said for years, and that is: Voters don’t support online sports betting. And so, tribal leaders will have conversations about what is next, and we’ll see.”
Jed Kelly, managing director of equity research at Oppenheimer, thinks the no vote is a good thing.
“Like OK, we kind of got two years of visibility,” Kelly said. “If you’re able to get EBITDA to break even in ’24 and you get ’25 with more states that are cash flow positive you probably are self-sufficient to go into California when it legalizes. Because even when it legalizes, it’s not going to be right away.”
Any legislation would have to up the tax rate from the 10 percent.
Prop 27 ran advertisements during its campaign that irritated some of the tribal leaders. The ads flaunted that the legislation would help the tribes when in reality it would open up a profit share that doesn’t yet exist in California, where most gaming activities are only legalized on tribal land.
Three tribes favored Prop 27, but more than 50 threw their weight around Prop 26.
“They must respect the single industry that has uplifted tens of thousands of Native Americans out of abject poverty,” Mejia said. “As long as that continues to be ignored, California will remain closed for sports betting. California is not a profit center.”
Still, some form of a mobile sports gambling push in California ahead of the 2024 election can be expected. DraftKings CEO Jason Robins has teased as much, and sources with knowledge of the campaigns confirmed those intentions.
