California sports betting record bet faces long odds

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Two dueling ballot initiatives to legalize sports betting in California have wagered more than $400 million on their campaigns, but with voters a month away from deciding, the resulting publicity blitz doesn’t appear to have tipped the scales. in their favor.

Proposition 26 would legalize sports betting at tribal casinos and four racetracks, and Proposition 27 would allow online sports betting. Major Native American tribes that operate most of California’s casinos, such as the Graton Rancheria Federated Indians, the Pechanga Band of Indians and others, put Proposition 26 on the ballot. Companies that have fought for new markets amid a wave of sports betting legalization in the country, such as DraftKings DKNG,
+1.78%
and Flutter’s FanDuel FLTR,
-2.18%,
have invested money in the Prop. 27.

The prize would be access to the world’s fifth largest economy, a potentially multi-billion dollar market. But so far, campaigns have shown ads that say little about sports betting, focusing instead on directing potential revenue towards the homeless, or research into gambling addiction and mental health. , as well as issues concerning Native American tribal sovereignty.

Recent polls have shown that only about a third of Californians plan to vote for either proposition, leading the online gambling campaign to change tack and the most tribal-backed campaign to double down. Proponents of Prop. 26 hope to contain sports betting in casinos, and they will continue to attack the Prop. 27.

Kathy Fairbanks, spokesperson for the Prop campaign. 26, stated that “the priority of the tribes has always been to defeat Prop. 27”.

promises and numbers

Proposition 27, also known as the Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative, promises to direct 85% of a 10% sports gambling revenue tax to a homelessness assistance program and to state housing, which he highlighted in his online, radio and TV ads.

Many housing and homelessness advocates are skeptical or even downright dismissive of these promises.

Prop campaign. 27 “literally says in their ads that they offer permanent solutions to mental health and homelessness,” said Paul Boden, head of the Western Regional Advocacy Project, a group that advocates for affordable housing in San Francisco. ” What is the [expletive] are you talking about?”

Boden said “we lost [hundreds of thousands] of affordable housing over the past eight years. Your entry into the online game will solve this problem? »

Abram Diaz, policy director of the Non-Profit Housing Association of Northern California in San Francisco, said his group had reviewed both proposals and was neutral on Prop. 26. But Prop.’s use of roaming. [its] proposal” worried the group, he said. “We know in our work how time-consuming and expensive creating truly permanent solutions can be.”

The campaign has a few housing and homelessness advocates on its side, including the San Diego Regional Task Force on Homelessness. Prop. 27 “will unlock additional homeless dollars that aren’t available without it,” Tamera Kohler, the group’s chief executive, said in a statement.

Prop. 27 backers DraftKings Inc., FanDuel and Fanatics, and the digital arms of casino operators Penn Entertainment Inc. PENN,
-4.26%,
Bally’s Corp. BALY,
-1.26%,
MGM Resorts International MGM,
-2.28%,
and Wynn WYNN,
-2.88%
did not return or declined to comment, directing MarketWatch to Nathan Click, a spokesperson for the Prop campaign. 27. He told MarketWatch that the measure would provide “a permanent source of funding in the state budget for the homelessness response. It’s money in progress.

Following the results of a recent survey, Click said the Prop. 27 would withdraw television ads, which he said “didn’t benefit either side”, and instead focus on more direct communication with voters. The Public Policy Institute of California showed that 54% of residents were likely to vote no on Proposition 27, while 34% said they would vote yes. Prop. 27 fared even worse in a later Berkeley IGS poll: 53% said they would vote no versus 27% who said they would vote yes.

More recent ads have shifted focus, particularly on early NFL season broadcasts: now its supporters are urging Californians to simply vote so they can play on your phone, which is already legal in many US states. .

California’s Office of the Legislative Analyst estimates that if passed, Proposition 27 could bring hundreds of millions of dollars in additional revenue to the state. Prop’s casino-based approach to gambling. 26 would bring in less — about tens of millions of dollars in revenue — to the state, the legislative analyst estimates.

Fairbanks, the spokeswoman for Prop. 26, said the estimated amount would be in addition to the approximately $5 billion that gamer tribes share with local, state and federal governments each year. As sovereign nations, the tribes do not pay state taxes – instead they pay local and state fees based on income – so revenue from increased gambling in casinos would not be taxed. But the campaign promises to direct 15% of revenue from a 10% tax on sports betting at racetracks to research into problem gambling and mental health.

Fairbanks also said “we are focusing all of our resources on educating voters on why they should reject Proposition 27 and have not done any publicity on Proposition 26.”

The state’s largest tribes outspent the major gambling companies on TV ads, according to filings with the secretary of state. Most of the money spent on ads in airtime and production costs so far – around $116 million – has been pro-Prop. 26 and anti-Prop. 27. This didn’t help Prop much. 26 Neither: Berkeley’s IGS poll found that 42% of respondents plan to vote no compared to 31% who said they would vote yes. But the poll also found that 53% of voters viewed gambler tribes favorably, while only 14% viewed companies that operate sports betting sites favorably.

The American Gaming Association, whose members include tribal casinos and commercial casino operators – in other words, the backers of both campaigns – estimates that tribal casinos in California have generated approximately $8.4 billion. revenue in 2016 and that their annual impact on revenue sharing in the local and state governments markets was approximately $3.5 billion.

By comparison, $152 billion has been wagered in 25 other states and Washington, DC, since online sports betting was legalized in 2018, according to publicly available data cited by Legal Sports Report.

Effects on tribes

Ads from both sides have also focused on the tribes, including early ads in which the Prop. 27 indicated that small tribes would benefit most from his initiative. Joely Proudfit, chair of the Department of Native American Studies at California State University San Marcos, said she considers Prop. 27 as a threat to most of the tribes in the state – the player tribes that originated Prop. 26.

“As a voting California citizen, as an Indigenous woman, it is very troubling that [Prop. 27’s] supporters invest in fake stories to fool people,” Proudfit said, referring not only to promises made by the campaign, but also to its claims that Prop. 26 leaves aside the small tribes. She said Gamer Tribes have shared $1 billion in revenue with smaller Tribes since 1998, contrary to what Prop ads say. 27.

She also called the measure an “insidious attack on tribal sovereignty”.

“The game of tribal government has been the only real economic driver to help lift tribes out of abject poverty,” Proudfit continued. “We want the tribes to continue to be self-reliant… Proposition 27 would undermine what they have been building for decades.

Representatives of the two tribes listed as Proponents of Proposition 27, Big Valley Rancheria and Middletown Rancheria, did not return requests for comment.

The Indian Gaming Regulation Act established a federal gaming structure in 1988, legalizing limited forms of gambling, such as bingo, on tribal lands. In 1998, California voters approved Proposition 5, which a year later paved the way for the formation of state-tribal gaming pacts, and allowing other types of gambling, such as slot machines, in the casinos belonging to the tribes.

The issue of problem gambling

Proponents and others wonder whether the potential additional revenue will outweigh their worries about the possible harms of allowing more gambling in any form. Harold of Gamblers Anonymous in Northern California, who prefers his last name not be used, said his organization does not take a political position but that he is personally against both proposals.

“It could be the biggest cash cow of all time,” he said. “And it’s going to be on people’s backs.”

As a recovering drug addict who hasn’t placed a bet in 26 years, the rise of mobile gaming has him particularly concerned.

“There is already a proliferation of games that people can play on their cell phones without [Prop. 27] passing,” he said. “We are seeing an increase in the number of people arriving, especially young men.”

Timothy Fong, co-directing physician of UCLA’s gambling studies program, said a 2006 statewide survey on which the program was a consultant found that 1% of Californians have a gambling problem and 4% had trouble playing some. point in their life.

“So we will raise more money by [adding more] game,” Fong said. “Then we will invest more money in dealing with the problem we just created.” Still, he said gambling was going to happen whether or not it was regulated by the state.

He also expressed concern about how online betting operators would ensure that children did not place bets. “In person, you say no to someone who’s not 21,” Fong said.

Click, the spokesperson for Prop. 27, said the measure requires “every operator to use cutting-edge, know-your-customer technology,” such as that large financial institutions use to verify identity.

Fong also said that regardless of what happens with ballot initiatives, problem gambling funding should be part of the general state budget: “Just like traffic, air quality, nests Potholes, schools and the water supply all have to do with the quality of life in California.

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