Sports betting in California is on the 2022 midterms ballot, and Californians have two choices. They can choose in-person sports betting run by tribes, Prop 26, or online sports betting run by private sportsbook companies, Prop 27. Californians are making their voices heard on social media as they decide where they stand.
Online reactions to Prop 27 Instagram ads are flimsy straw polls. But they’re among the first glimpses at how regular Californians are reacting to the campaigns behind Prop 26 and Prop 27.
While some dissenting voices favor Prop 26, Prop 27 seems more popular among commenters. The convenience of online gambling is a powerful allure to bettors. But, at least in this Instagram poll, there’s not a lot of intellectual depth in why bettors support Prop 27.
Internet trolls aside, initial reactions include common misconceptions about California tribes, sports betting, and proposed funding programs. Here are some of the most common myths about sports betting in California.
Myth: California Tribes Are Wealthy From Casino Revenue
Some of the most common misconceptions about California sports betting revolve around tribal wealth. Most of California’s gaming tribes are not generating wealth from casino revenue. Most tribal casinos fail to make large amounts of money from casino gambling. For the ones that do, per capita payments to individual tribe members are even rarer. Rather, tribes use the funds for tribal development in infrastructure, health care, education, or other issues.
Further, California tribes have a cap on the amount of money they can distribute in casino revenue.
California has a fund called the Revenue Sharing Trust Fund (RSTF). The RSTF distributes $1.1 million annually — $275,000 quarterly — to eligible tribes. As the latest distribution report shows, not all tribes are eligible for these distributions. So, Native Americans aren’t getting checks just for being Native American.
Gaming is also only one of the ways California tribes can generate revenue. Government contracts and local businesses are others. One way to increase tribal economic development would be to allow private companies to lease tribal land for longer than 5-10 years. That would lift a safety net that would make private investment in tribal communities more viable and attractive.
That decision must be made at the federal level at the Department of the Interior. But California Democrats who are lining up behind tribal sovereignty can encourage such talks if tribal sovereignty is important to them for more than one election cycle.
Myth: Online Sports Betting in California Is Legal Now
Some California sports bettors believe that being able to gamble at offshore sites is the same as sports betting being legal. Tricking sportsbook geolocation tech with a VPN is a similar misconception.
Yes, bettors can sign up for sites offshore or trick another state’s sportsbook with a VPN. (Sportsbooks’ know-your-customer protocols are much stronger than their geolocation systems.) However, California doesn’t get any tax revenue from those sports betting methods.
Bettors also risk losing the safety nets that legal sports betting markets build for their customers. Offshore sportsbooks can refuse to pay winnings, steal financial information, or ignore customer service issues. US customers have no recourse against wrongdoing by offshore books.
Getting caught tricking a legal US sportsbook’s geolocation tech is also a good way to get banned. Since online sportsbook accounts are tied to a bettor’s Social Security number, sportsbooks can keep a violator’s Social Security number from creating a new California account.
So, Californians can flout the law and bet offshore or through VPNs. But they do so facing serious potential downsides and without benefit to California.
Myth: All Sorts of Misunderstandings About Funding
The other good-faith concerns include concerns about how sports betting in California will fund homelessness and mental health initiatives.
Some Californians think the mental health and homelessness programs funded in Prop 27 come from the gas tax. That may be because cutting the gas tax is a hot topic among Californians struggling with high gas prices.
But the gas tax doesn’t fund mental health or homelessness programs. Gas tax revenue funds street, highway, and other transportation projects at local and state levels.
The Prop 27 campaign claims it will be the only permanent funding source for homelessness and mental health programs. That’s technically true. Online sports betting may become the only stream of revenue dedicated to solving those issues. But it’s not the only way that solutions to those problems can receive funding.
California has a grant program that funds projects dedicated to addressing homelessness in California. Gov. Gavin Newsom has also committed $2 billion over the next two years to the near-term needs of homeless Californians. Grant money and governor commitments can change over time.
Having one steady stream of revenue toward those causes is attractive. But Californians shouldn’t make the mistake of thinking this is the only way proposed solutions to these issues can receive funding.
First Impressions of Sports Betting in California
Both Prop 26 and Prop 27 have supporters. But initial social media reactions favor Prop 27. However, the reactions still show how widespread misunderstandings about tribal gaming are among non-tribal Californians. Few Californians seem to recognize the risks they take in sports betting illegally. Fewer still know basic financial facts about other taxes and programs.
Online sports betting may come to California because of misunderstandings about tribal wealth and gaming as much as it may come from the convenience of online gambling. This reflects the depth expected from reactions to an Instagram ad.
Whatever their reasons, it wouldn’t be surprising that young Californians on Instagram favor online gambling. Younger generations are so used to convenient online services that online gambling may feel inevitable. However, concerns about increased gambling addiction from increased access to a popular form of gambling could dampen enthusiasm for online sportsbooks.