California sports betting comes down to propositions 26 and 27


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As legalized sports betting continues to sweep the country, the states that host the most NFL franchises (California and Florida, three each) continue to shift their football betting to bar bookmakers.

In both states, prior agreements with Native American tribes have made the situation a political hot potato, as existing gambling interests try to fend off a tidal wave that is otherwise sweeping the nation.

For California, the fight landed on the ballot, in the form of two propositions: 26 and 27.

The first favors the tribes. If passed, it would allow “on-site sports betting only at private racetracks in four specified counties”, with the tribes having full betting control. It would also expand the table games allowed in tribal casinos, with the installation of roulette wheels and craps tables.

Proposition 27 opens the floodgates for online and mobile sports betting. This would allow FanDuel, DraftKings and BetMGM to apply for licenses. As noted by Bill King of Sports Business Journalany sportsbook that wants to do business in California must be licensed in at least 10 other states.

There is another significant wrinkle. Even if tribal interests oppose Proposition 27, any sportsbook doing business in California must give meaningful flavor to the tribes. The price of a license could be, per king, 100 million dollars.

It’s also the estimated amount each side will spend fighting Proposition 27. Yet, these are just peanuts in the grand scheme of things. The most populous state in the country would generate billions in tax revenue. (Already, billions in California tax revenue have been lost in each of the four years since the Supreme Court cleared all states to adopt sports betting.)

As Brad Allen of explained recently, tribes oppose Proposition 27 for multiple reasons. They claim they were promised gambling sovereignty in California. They also support the claim that Proposition 27 would turn every phone, computer, and tablet into a gaming device, making it harder to ensure responsible gaming. (This argument would have a bit more credence if the tribes weren’t also trying to mark the ability to offer in-person sports betting and otherwise protect their own gambling territory.) They also fear that online sports betting and mobiles are eventually becoming online and mobile casinos, which would take money away from in-person tribe-owned casinos.

King explains that the California Democratic Party will oppose Proposition 27 and will not take a position on Proposition 26. This speaks to the deeper push and pull that will create another political problem, not this what people want, but what politicians think politicians need.

Either way, voters will have the opportunity to vote on both proposals. If California wants to keep up with the times – and capture billions that are otherwise wagered legally across state lines or illegally from Siskiyou County to San Diego and all points in between – voters will embrace both proposition 26 and proposition 27.

It would be different if the combat focused on the philosophical or moral issues raised by the game. It’s not. These are local interests trying to retain the revenues and influence they enjoy, at the expense of state tax revenues and the ability of citizens to engage in activities that are being embraced in an ever-increasing number increasing number of states.

The irony, of course, is that the state that has always been considered ahead of its time is already lagging behind. If Proposition 27 fails, California could find itself in the dust of yet another gold rush that will prompt Horace Greeley to revise his classic mantra in a nutshell.

Go east, young man.


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