Is Sports-Betting Defeat Better Than Victory For California Tribes?

July 27, 2022
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With less than 15 weeks to go before the November 8 election, California gaming tribes seem more focused on beating a sports-betting referendum proposed by DraftKings, FanDuel and BetMGM than passing their own ballot initiative.

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With less than 15 weeks to go before the November 8 election, California gaming tribes seem more focused on beating a sports-betting referendum proposed by DraftKings, FanDuel and BetMGM than passing their own ballot initiative.

It is another example of the timeless political adage: follow the money.

Campaign contributions both for and against Proposition 27, the online sports-betting referendum backed by commercial betting operators, total more than $300m so far, according to a report released on Monday (July 25) by the California Fair Political Practices Commission.

That is more than double the amount of up to $145m raised by parties for and against Proposition 26, the retail sports-betting referendum supported by tribes for their brick and mortar casinos and racetracks in the state.

One tribal political action committee is spending its $102m in raised finances to oppose Proposition 27 and support Proposition 26.

“The top priority for the tribes is making sure they don’t have to compete in the gambling market in California with organizations besides the tribes,” said Isaac Hale, an assistant professor of politics at Occidental College in Los Angeles.

If both propositions are approved by California voters in November, the courts may become involved, and sports betting could be delayed in the Golden State indefinitely.

“A court is likely to do an independent analysis of whether the measures are in conflict if they both pass,” said Mary-Beth Moylan, an associate dean at the McGeorge School of Law at the University of the Pacific in Sacramento.

“Under California law, if they both pass and are in conflict, the one with the larger percentage of the vote will take effect; the other will not,” Moylan said.

The rejection of both propositions would preserve the status quo in California, a situation far more palatable to the tribes than DraftKings, FanDuel and other online betting companies.

“I’m not a betting man, but I think a scenario in which neither proposition passes or in which only [Proposition] 26 [the tribal referendum] passes would be fairly expected, not too surprising,” Hale said.

“I think a scenario in which [Proposition] 27 passes and [Proposition] 26 does not would be quite surprising.”

Dan Walters, a veteran political columnist for the Sacramento-based non-profit CalMatters, said the results of this year’s election could have an impact on future sports-betting efforts in California.

“I think that Prop 27 (the commercial sports-betting referendum) is the focus of both sides now. I haven’t seen any ads, pro or con, on Prop 26 (the tribal sports-betting referendum),” Walters said.

“Clearly, if Prop 27 fails, the door is open to a tribal online measure in 2024.”

Walters was referring to a third ballot campaign by the San Manuel Band of Mission Indians and Rincon Band of Luiseno Indians, which earlier this week submitted voter signatures in a bid to qualify its initiative to authorize retail and online betting exclusively through Indian tribes for the November 2024 general election.

Steven Light, co-director of the Institute for the Study of Tribal Gaming Law & Policy at the University of North Dakota, said an incremental approach on sports betting may be more appealing to California's voters.

"Gaming tribes in California are betting that the general public wants to see retail sports betting in tribal casinos, and in commercial race tracks, more than it wants to see a much broader expansion that would come by permitting mobile wagering on commercial platforms with roots outside of California," Light said.

And what about the coalition of DraftKings, FanDuel, BetMGM, WynnBET, Bally's, Penn National Gaming and Fanatics that has contributed a combined $150m and counting to pass the commercial sports-betting referendum in California? Will they come back in 2024?

“If you see Prop 27 going down by like 20, 30 points, I think they might decide to take a breather,” Hale said. “If this is a very narrow defeat for Prop 27, yes, I could absolutely see this thing re-litigated in 2024.”

Kathy Fairbanks, who represents a coalition supporting the tribal sports-betting referendum, said “it’s not 100 percent correct to say tribes are more focused on [Prop] 27 than [Prop] 26.”

“Certainly, the disparity between where tribes are landing is more pronounced on Prop 27, with 50 plus tribes opposed versus three that have come out in favor,” Fairbanks said.

“But tribes are focusing both on passing Prop 26 and defeating Prop 27. We feel very good about where things are with both campaigns.”

Media officials with DraftKings and FanDuel did not immediately return requests for comment.

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