California’s rival sports betting measures could end up in court if both are passed by the voters in November. California has the largest so-far untapped sports betting market in the U.S.
Proposition 26, a retail sports betting and casino expansion measure pushed by a coalition of some of the Golden State’s most powerful gaming tribes, is on the same ballot as Proposition 27, whose backers are seven of the top out-of-state sports betting operators, who want to be able to operate online sports.
The election campaign pitting the two propositions against each other is anticipated to be the most expensive in years in a state that is known for expensive ballot measure campaigns. Each side has promised to spend at least $100 million in promoting their measure.
California’s constitution stipulates that in the case of competing ballot measures that get more than a majority of votes, the one that gets the most votes wins. However, in the case of measures that don’t conflict with each other it is possible for both to become legal. The operators, including DraftKings, FanDuel and BetMGM, wrote their measure not to contradict Proposition 26, but to complement it. It would allow them to offer mobile sports betting, but require operators to tether with a tribal casino.
However, the gaming tribes want nothing to do with them. They want to maintain their monopoly on casino gaming and don’t want the out-of-state operators to have a piece of the action. They argue that the good work Indian gaming does for tribal members will be imperiled if the sportsbook operators siphon off some of their money. They also claim that their very sovereignty is threatened.
Proposition 27, called the California Solutions to Homelessness and Mental Health Support Act, taps into the state’s biggest political issue: homelessness. It commits to earmarking billions of dollars from a 10 percent tax on sports betting to fight that social ill, and the mental illness that often leads to it. It commits 85 percent of the tax to fund that treatment.
Besides the other arguments used against it, the tribes also claim Proposition 27 would make it too easy for minors to sign up to place bets.
Although if both measures pass they would likely both be legal, it is likely that if Proposition 26 passes tribal lawyers will challenge it, claiming that the conflict.
It is possible that the two competing measures could be consolidated before election day, but that would require both sides to agree to it.
