Sports betting is on California’s ballot this November. Various groups have tried to get four California sports betting initiatives on the 2022 ballot. However, only one has made the ballot so far. A second is in the final stages of determining whether it will make it onto the ballot. A third failed to gather enough signatures, and the sponsors of a fourth pulled out of the process.
The sports betting initiative that’s already on the ballot would allow in-person sports betting at tribal casinos and racetracks. It would not allow online sportsbooks. That initiative would also block DraftKings and FanDuel from the market. California tribal gaming groups back this initiative.
In response, major sportsbook brands, including DraftKings and FanDuel, are backing a competing initiative that would allow mobile sports betting statewide. That initiative is in the process of having its signatures verified to make it on the ballot. It will likely make it onto the ballot in November.
What If Both California Sports Betting Ballot Initiatives Pass?
If one initiative passes, then the winning sports betting framework will be deployed in California. However, if both initiatives make it onto the ballot, two things could happen. California’s legislature could call a special session to seek a compromise between the two initiatives. Either party can withdraw its initiative from the ballot if they’re satisfied with such a compromise.
However, the more likely scenario is that California bettors will vote on both initiatives. The parties behind both initiatives have competing interests. California’s tribes want to maintain control of gambling. Business revenue funds social services on tribal lands. So, the tribes want to keep gambling revenue for continued economic development.
Major private sportsbook companies want access to what would be the largest sports betting industry in the United States. California’s population is about double New York’s with a large pool of wealthy potential bettors. It would be a gold mine for private sports betting companies. So, it’s no wonder that private sports betting companies are focused on California.
The Other Two California Sports Betting Ballot Initiatives
California’s other two sports betting initiatives failed. One was backed by three tribal casinos. It would’ve allowed mobile sports betting controlled by the tribes. However, that initiative’s backers pulled it.
California’s card rooms also sponsored a sports betting initiative that would allow them to offer sports betting. It was similar to the operator initiative, also funding homelessness programs. It failed to qualify for California’s ballot in November.
So, November will feature a showdown between the private operators and California’s tribes.
California Ballot Initiative Donors
The tribal and operator initiatives have both generated millions of dollars in support and opposition.
Tribal Initiative Support And Opposition
According to Ballotpedia, the tribal initiative is backed by a group called the Coalition for Safe, Responsible Gaming. Its top donors include tribes with obvious stakes in California’s gambling industry. Overall, the group has raised about $30 million in support.
The opposition is largely made up of a committee called the Taxpayers Against Special Interest Monopolies. The California Commerce Club and several private casinos and gambling companies comprise this committee. Gambling Company, PT Gaming LLC, made its own committee, No on the Gambling Power Grab, to oppose the tribal initiative. Together, these two committees have raised about $25.5 million to oppose the tribal initiative.
Despite their grassroots-sounding names, these organizations are groups that want to open the gambling industry to private companies instead of keeping most of it with California’s tribes.
Operator Initiative Support And Opposition
The operator initiative has raised just over $100 million in support from one group called Californians for Solutions to Homelessness and Mental Health Support. This group is made up of some of the largest gambling companies in the United States, including:
- BetMGM LLC
- Betfair Interactive US LLC (FanDuel)
- Crown Gaming, Inc. (DraftKings)
- Bally’s Interactive LLC
- FBG Enterprises LLC (Fanatics, Inc.)
- Penn National Gaming, Inc.
- WSI US LLC (WynnBET)
Opponents to the operator initiative have raised about $65.5 million between two committees. Both the Californians for Tribal Sovereignty and Safe Gaming and the Coalition for Safe, Responsible Gaming are made of California tribes with ties to the gambling industry.
What The Initiatives Do For Bettors
The dueling sports betting initiatives do two things for bettors: offer different sports betting frameworks and direct funding to different programs.
The tribal initiative would allow in-person betting at tribal casinos and horse tracks. (Sports betting legislation often leaves out horse tracks, so they’re important allies for California tribes.) It would also keep DraftKings and FanDuel from operating in California.
The tribal initiative would set a 10% tax rate on sports betting revenue. That money would be disbursed as follows:
- 15% to problem gambling programs
- 15% to the state regulator to enforce industry rules
- 70% to California’s General Fund
Its fiscal note estimates that state tax revenue could increase by the “mid-tens of millions.” Additionally, state regulatory and enforcement costs could increase by the “low tens of millions annually.” So, its fiscal note projects a smaller increase in regulatory costs than the operator initiative.
The operator initiative would allow online sports betting to be offered through private gambling companies. Private companies would partner with California’s tribes to offer mobile sports betting across the state. So, bettors wouldn’t have to travel to a tribal casino to place sports wagers.
The operator initiative would tax sports betting revenue at 15%. After covering regulatory costs, those funds would be allocated as follows:
- 85% to homelessness programs
- 15% to nonparticipating tribes
Its fiscal note estimates that state tax revenue could reach the “mid-hundreds of millions of dollars annually.” In contrast, new regulatory costs could increase by “mid-tens of millions.” So, the operator initiative projects a larger increase in new tax revenue than the tribal initiative.
California Sports Betting Initiative Summary
Californians will likely have two sports betting initiatives to vote on in November. The tribal initiative is already on the ballot. It would allow tribal casinos and horse tracks to offer sports betting. This initiative would not allow mobile sports betting. It would fund problem gambling programs, sports betting policy enforcement, and General Fund deposits. The tribal initiative’s fiscal note estimates a smaller increase in regulatory cost than the operator initiative. The tribal initiative’s full name is the California Legalize Sports Betting on American Indian Lands Initiative.
The operator initiative has not made it onto the ballot yet. It is in the final stages of signature verification. If its signatures are verified, it will make it onto the November ballot. So, there’s still a chance that California voters may not be able to vote on the operator initiative. This initiative would allow private sportsbook companies to offer mobile sports betting through partnerships with California’s tribes. This initiative would fund homelessness programs and tribal development. Its fiscal note estimates a larger increase in state tax revenue than its competition initiative. Its full name is the California Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative.