Doomed Sports-Betting Propositions In California Could Cost $700m

November 3, 2022
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With just five days left until the November 8 election, the amount spent on two apparently futile propositions to legalize sports betting in California is expected to set a new national record of up to $700m.

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With just five days left until the November 8 election, the amount spent on two apparently futile propositions to legalize sports betting in California is expected to set a new national record of up to $700m.

If that happens, the new record would more than triple the previous national high of $222m — also set in California just two years ago — for campaign spending on state ballot measures.

Documented contributions so far on Proposition 27, which would legalize online sports betting in California, and Proposition 26, which would allow in-person sports betting at racetracks and tribal casinos, already exceed $459m, according to the California Fair Political Practices Commission.

“Our estimate is that this could come in at at least $700m total, if not more because we’re also seeing dollars that are spent both in favor of one proposition or another and dollars spent in opposition to one proposition or another,” said Steven Light, co-director of the Institute for the Study of Tribal Gaming Law & Policy at the University of North Dakota.

Light and the institute’s other co-director, Kathryn Rand, appeared on Wednesday (November 2) in an online webinar sponsored by the University of Nevada, Las Vegas International Center for Gaming Regulation.

As staggering as the spending on this year’s California sports-betting propositions has been, it may prove to be just a prelude to 2024.

During the Global Gaming Expo (G2E) last month in Las Vegas, top executives of commercial sports-betting operators vowed to return to California and exchanged harsh words with leaders of deep pocketed gaming tribes in the Golden State.

“Commercial platforms like the big operators here — BetMGM, DraftKings and FanDuel — have the will to find a way,” Light said.

“So, if it’s not now, the question may be when and where.”

Recent polling shows Proposition 27, the online sports-betting measure, has the support of just 26 percent of those polled versus 67 percent in opposition.

Proposition 26, the in-person betting proposition backed by the tribes, has the support of 34 percent of those polled and is opposed by 57 percent.

In a snapshot poll taken of those attending Wednesday’s webinar, 68 percent said neither proposition would pass; 16 percent said both propositions would pass; 11 percent said Proposition 27 would pass; and 5 percent said Proposition 26 would pass.

The outcome of a high-profile lawsuit in Washington, D.C., which has so far prevented the Seminole Tribe from continuing to accept online sports bets in Florida, could also have ramifications for California, according to Rand.

On December 14, the U.S. Court of Appeals for the D.C. Circuit is scheduled to hear oral arguments on whether a since overturned 2021 Florida gambling compact which allowed the Seminoles to launch sports betting operations briefly last year violates the Indian Gaming Regulatory Act of 1988.

“If the Seminole Compact is successful, then that could open up mobile wagering even outside Indian lands in a state like California,” Rand said.

“But if that Seminole Compact does not stand, that means that [online sports betting] is much more likely to be limited to Indian lands.”

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