So … Prop 27 needs a miracle to pass in California.
This week, a Public Policy Institute of California poll showed both CA sports betting ballot initiatives have poor chances of passing. Of the survey’s 1,111 likely California voter respondents, only 34% planned to vote yes on Prop 26 (in-person sports betting) and just 26% planned to vote yes on Prop 27 (online sports betting).
Still, election miracles happen. Sometimes. Rarely of this magnitude, but … sometimes.
And if Prop 27 does pass in California, only a certain select group of sports betting companies will actually be eligible to apply for sports betting licenses. Prop 27 stipulates that a company must either have active licenses in 10 other states, or have active licenses in five states and own 12 casinos.
Just 10 companies meet those requirements. They are:
- Caesars Sportsbook
- Barstool Sportsbook
- Bally Bet
- Hard Rock Sportsbook
Eight of these nine brands are licensed in at least 10 states. Bally Bet has licenses in six states and owns 15 casinos. Hard Rock Sportsbook has licenses in six states and owns 11 casinos (and a 12th will open by the time sports betting under Prop 27 would launch).
This would ensure the most reliable new sportsbook brands are among California’s pool of sportsbook apps.
Of course, other companies could merge in order to have access to the California sports betting market. Fanatics (BetFanatics Sportsbook) seems like a candidate to do that, as it donated $25 million to the Prop 27 campaign.
The campaigns supporting their respective sports betting initiatives spent more time attacking the other side than defending theirs. Consequently, California voters were worried about deep issues like tribal sovereignty and the role of out-of-state corporations. They didn’t have the headspace to decide whether they’d prefer retail or online sports betting.
While some other states consider the number of licenses in other American markets, the applicants’ background checks make up the core of a regulator’s due diligence. California’s license requirements would add to an already intensive application process. But the rewards of receiving an application would be worth it.
What if California Sports Betting Doesn’t Pass?
If neither California sports betting initiative passes, backers of each measure will have to go back to the drawing board and write new initiatives in hopes of getting on the 2024 ballot — and bettors wouldn’t be able to take advantage of any California sportsbook bonus offers until 2025 at the earliest.
California requires ballot initiatives to have new language from year to year. That ensures that ballot measures that are defeated remain off the public agenda until they’re reworked.
It also means that private sportsbooks and tribes may have to work together on a second attempt to bring sports betting to California. The language and the direction of a new sports betting initiative will have to differ from Prop 26 and Prop 27.
So, these two rival groups could begrudgingly come up with a sports betting initiative that’s reasonable to both parties. The Yes on 26 spokesperson suggested such a compromise could be inevitable during a September debate.
Alternatively, sportsbooks and tribal casinos could remain opposed and find new ways to maximize their shares of California’s sports betting industry. This strategy could set up another confrontation between private companies and tribal casinos. The next conflict could also have new alliances between the horse racetracks and cardrooms.
Whatever the next attempt to legalize California sports betting is, it’ll likely focus more heavily on the proposed sports betting regulations rather than attacks on opposing initiatives.
IF PROP 26 PASSES … These Companies Are Poised to Launch Retail Sportsbooks in California
Sportsbooks Failed With Prop 27 Voter Outreach
As the most populous state in the US, California has the highest revenue potential for in-state sports betting. (Nevada benefits from out-of-state tourism and profits more from its casinos and entertainment than its sportsbooks.)
New York has shown how quickly sports betting handle and tax revenue can grow in a large state with an enthusiastic customer base. California sports betting would shatter even more financial records.
The Prop 26 and Prop 27 campaigns failed to get their own messages across to voters. This tactical failure could delay California sports betting by several years, locking sportsbooks out of one of the largest potential markets in the US.
Other large states don’t have the momentum toward sports betting legalization that California had. Texas is still years away from gambling expansion, and Florida is mired in legal proceedings that could delay sports betting until 2025.
California’s failure to pass sports betting means waiting years for another New York-style launch. It’s a payday that the national sportsbook brands spent hundreds of millions of dollars sabotaging through ineffective voter outreach.