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Californians Reject Sports Betting By Saying No to Prop 26, 27 on the Ballot
By Jeff Osienya Nov 13, 2022 IndustryVoters in the Garden State have overwhelmingly crushed the chances for the debut of regulated sports betting within state lines. The measures responsible for introducing the activity, Propositions 26 and 27, both received a resounding NO on the ballot.The battle over legalizing sports betting in California finally drew to a close on Tuesday after residents voted against Propositions 26 and 27. Although the two presented competing sports betting ideas, they would have seen the state join several other states nationwide in generating revenue from sports gambling.
Californians took to the ballot and voted overwhelmingly against the two propositions, nipping both in the bud. Prop 26 received 30.6% support, while Prop 27 fared much worse as it only managed to garner 16.76% of the votes. The 574 million used in campaigns to sway the voters for or against either of the props makes this the most expensive ballot initiative in the nation’s history.
A War between Tribal and Commercial Operators
The past few months have been busy for the Native American tribes and sports betting companies as they battled it out to bring sports betting to California; their way. So, rather than a unified approach, each party (the tribes and sports betting companies) wanted the activity legalized how they saw fit. So, as onlookers continue to wonder what exactly transpired on election night, the main question is not why the props were rejected but how they ended up receiving the big ‘NO.’
A short trip down memory lane may offer some insights. Right before the campaigns for the props kicked off, polls revealed some interesting tidbits. First, the data indicated that while Californians were not that enthused by having regulated sports betting, at least 45% would have voted yes at the beginning of the year. However, as residents were bombarded with ads on the two props, support started waning, and as Election Day drew near, it was becoming apparent that both would not pass.
According to a UC Berkeley poll, voters who saw the ads opposed the props at a much higher rate than the ones who weren’t exposed to them. It appears that the sponsors of both initiatives had shot themselves in the foot. Experts have explained that voters said ‘No’ to both Propositions because there was too much conflicting information in either campaign. Most advertisements focused on shutting down the other rather than making a point for sports betting.
As such, a few weeks before Election Day, gaming consultants had already started predicting the impending failure of both props. Moreover, poll results indicated a loss for both measures, citing a divided front and a lack of clarity on gaming revenue allocation.
Putting Competing Measures on the Ballot Wasn’t the Best Approach
Mark DiCamillo, a poll director at UC Berkeley, suggested that having competing initiatives was a mistake on the proponents’ part. Two measures competing against each other diminished the chances of both props ever seeing the light of day. DiCamillo stated:
Quote“They should have gotten their act together. They should have only had one initiative.”
Sacramento State political scientist Kimberly Nalder backed DiCamillo’s observations noting that the barrage of ads presented to voters on the airwaves was ‘an overkill.’ She said:
Quote“There’s just so much money being poured into these, and people are rightfully suspicious of campaign ads because they’re often misleading or outright incorrect.”
Prop 26, heavily backed by the tribes, would have seen in-person sports betting offered at tribal casinos and horse racing tracks, with the addition of dice games and roulette. However, cardroom operators condemned the proposition, stating that the provision allowed private citizens to bring forth lawsuits if they felt the need to.
Additionally, the cardroom operators said this was ‘a hidden poison pill that allows for unlimited lawsuits against cardrooms’. Thus, based on how cardrooms saw it, tribal operators could exploit the measure to bring down national operators, placing jobs and communities in jeopardy. Following the overwhelmingly negative vote, California press representatives said:
Quote“California voters were not fooled by Proposition 26 and soundly rejected it. Prop 26 was not just a sports betting measure but a massive expansion of gambling by five wealthy tribes that included a poison pill aimed at taking market share away from highly regulated cardrooms that provide millions of dollars in tax revenue to communities and tens of thousands of jobs. Voters made it clear; Prop 26 is bad for communities, jobs, and California.”
Prop 27, sponsored by national operators like DraftKings, BetMGM, FanDuel, and about three tribes, was vouching for online sports betting. Interestingly, while a few tribal nations supported this, over 50 other tribes felt it threatened their businesses. The prop also advocated for the tax revenue to fund initiatives geared towards homelessness prevention, mental illness, and community programs for poorer tribes. Unfortunately, it appears that the operators may have underestimated the role of tribes in the process. If any future negotiations are to be carried out, some form of collaboration would be paramount.
What Next for California and Regulated Sports Betting?
At the moment, it is not exactly clear how much The Golden State would have made had sports betting been okayed. Nonetheless, looking at other states that took the leap to legalize may offer a rough idea. An obvious fact is that California is the most populous state in the US. So, with some of the top sports betting earners bringing in hundreds of millions to billions of dollars per month, chances are that it could be among the top in gambling revenue.
Further, it’s also worth noting that most US states passed sports betting bills through legislative action, not ballot initiatives, making it less complicated. On that note, California attempted the legislative approach in 2019 and 2020, respectively, but the pandemic halted such efforts, bringing its own set of challenges.
As sports betting stakeholders and legislators ponder their next steps, Californians will have to continue crossing borders to bet on professional and collegiate sporting events. Unfortunately for sports-wagering fans in the state, as matters stand, it may be a while before the state considers similar propositions in the future. There is speculation that nothing will be happening on that front until 2024 or even 2026 at the earliest.
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