California Prop 27 has some catching up to do in the six weeks left before the 2022 fall election. The sportsbook-led campaign was polling 20% behind the 8-ball in mid-September. Now, organizers of the online sports betting initiative are changing course.
The goal is to win voter approval in November, and maybe even beat Prop 26 — a tribal-led, in-person-only sports betting ballot measure that is battling Prop 27 for control of a future multi-billion-dollar California sports betting market.
Prop 27 recently pulled most of its TV advertising. Now, ramped-up digital ads and mailings are among what’s replacing most of those ads, Yes on 27 spokesperson Nathan Click told California Casinos in a call discussing the Prop 27 campaign’s reshaped strategy on Wednesday.
“Anything that you can one-to-one target a specific message with voters,” he said.
The campaign pulled back on TV advertising mainly to avoid confusing voters who have been bombarded by sports betting messages from both campaigns.
But Click made it clear that the new communication tactics don’t change his campaign’s message.
Prop 27 is the best choice for California in terms of job growth, new state revenue, and homelessness prevention.
“We’re undaunted,” Click said.
Here’s an in-depth look at how Prop 27 plans to better communicate that message by the Nov. 8 election.
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What Is Prop 27 About? First: Jobs
First up is jobs.
Jobs? Yes, jobs. You haven’t seen Prop 27 talk much about job creation in the ads about homelessness and helping disadvantaged tribes. But the campaign will try to change that in the coming weeks.
FanDuel, the top-earning sportsbook in the US, actually has a corporate headquarters location in Santa Monica, California. But no one in the Golden State can bet using their home product. Click said online sports betting would benefit Californians by helping to grow the high-tech gaming industry already at work in their backyard.
Californians care about jobs more than any other issue. A September poll by the independent Public Policy Institute of California, or PPIC, shows 29% of Californians — or about three in 10 — say jobs, inflation, or the economy is “the most important issue facing the state today.”
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According to Click, new economic opportunities would follow the passage of Prop 27 — for businesses large and small.
He said state and local tax revenue created by Prop 27 would flow through communities via services, construction, and more.
“All of that translates to jobs, but not just jobs — the vast majority will be union jobs,” Click said.
Prop 27 would also help California tribes, Click said. Under that ballot measure, tribes with an approved gaming compact with the state could conduct online sports betting alone or in partnership with a privately licensed sportsbook, like FanDuel.
(Tribes would have to be licensed, however, requiring them to “give up some of their rights under federal law to get a license,” according to legislative data.)
Additionally — and importantly — sportsbooks would have to partner with a tribe under a tribal-state gaming compact to even operate in the state under Prop 27.
Those partnerships would give tribes access to the largest sportsbooks in the industry. Only companies with sports betting licenses in at least 10 other US states could operate in California.
|Prop 26||Prop 27|
|Main support||58+ California tribes, local business organizations, social justice groups||7 private sports betting companies, 3 California Tribes MLB, some homelessness organizations|
|Main opposition||California card rooms, California Republican Party||California Democratic Party, California Republican party, state education organizations|
|Where would state revenue go?||70% General Fund, 15% problem gambling, 15% state regulator||85% homelessness programs, 15% non-participating tribes|
|Estimated sports betting launch||Mid- to late-2023||Mid- to late-2023|
The State Revenue Angle
Next on the list of reasons to support Prop 27 is state revenue, according to Click.
Prop 27 could raise an estimated half a billion dollars in new state revenue to fight homelessness and boost the budgets of non-gaming tribes, according to California legislative data.
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Click compared that to Prop 26, which state legislative analysts say could amount to “tens of millions of dollars annually” in tax payments from racetracks and non-tax payments from tribes. Because of tribal sovereignty, bets placed at Indian casinos aren’t taxed. (Although tribal payments could be considered tax revenue under state law.)
“A 0% tax rate (at Indian casinos) … would not help the taxpayers one iota,” Click said.
The benefit to the state is something that NBC Bay Area political analyst Larry Gerston said voters may want to keep in mind when going to the polls on Nov. 8.
“Proposition 26 does not provide a lot of money to the state. Proposition 27 does provide several hundred million dollars, much of it would be used for homelessness,” Gerston was reported as saying by NBC Bay Area on Sept. 8.
Homelessness As a Prop 27 Issue
Homelessness is another critical issue in California central to the Prop 27 campaign.
“Prop 27 raises hundreds of millions of dollars each year that would go directly toward solving one of our state’s biggest challenges, which is homelessness and mental health,” Click told California Casinos.
“Hundreds of millions of dollars in all 58 counties to build real, permanent solutions for homelessness like permanent housing, tiny homes, mental health, and addiction treatment.”
Under the initiative, 85% of state revenue would go to fight homelessness and gambling addiction. The result would be an estimated $475 million a year to fight homelessness in a state the US Interagency Council on Homelessness reports had an estimated 161,548 people experiencing homelessness on any given day in 2020.
Prop 26 is focused primarily on education. State revenue from sports betting at the four horse racetracks and specified payments in tribal-state gaming compacts would go into a state fund for K-12 and community college education. Remaining funds split among mental health and addiction grants, gambling enforcement, and the state general fund.
Still, we will soon find out if fighting homelessness in California was ultimately a good strategy for Prop 27. It is the economy, not homelessness, that appears to be most on Californians’ minds going into November, per PPIC September polling.
“When asked to name the most important issue facing the state today, about three in ten Californians mention jobs, the economy, or inflation (29%), while fewer mention homelessness (14%), housing costs and availability (11%), the environment (8%), or water and drought (8%),” the PPIC survey reports.
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Prop 27 Just Needs 50% … Plus 1
The ultimate goal for the remainder of the campaign? Get Prop 27 to at least the 50% plus 1 mark required to pass statewide on Nov. 8. Translation: Prop 27 needs just one person above 50% to vote yes on Nov. 8.
Based on the past five California midterm elections, California Casinos estimates that number to be close to 4,725,911 votes.
That will require the campaign to change the minds of at least 4% of the 54% of likely voters who said they would vote “no” on Prop 27 when polled by the PPIC in September. On the flip side, 34% percent of those surveyed said they would support the initiative. And 12% were undecided. So the campaign needs to win over the undecided, too.
That’s not a small ask in six weeks.
Not that Click is worried. The Yes on 27 point person says his campaign’s polling actually shows it ahead of Prop 26 in voter approval.
“Our polling shows Prop 26 actually in the mid-20s” in percentage of voter approval, he said.
That differs from a February 2022 Prop 26 poll conducted by the University of California Berkeley that showed 45% of respondents initially approved of Prop 26, according to Ballotpedia.
It is possible that neither Prop 27 or Prop 26 will pass on Nov. 8. It is also possible that both will pass. Click wants to keep the vote as far over 50% as possible to ensure Prop 27 comes out on top.
“We’re undaunted,” he told California Casinos. “We’re hitting the pavement, hitting the doors, hitting people’s mailboxes, mobile devices, and wherever they access the internet. So that should give you a pretty good idea.”
So, is there a chance we’ll see the likes of DraftKings California in the Golden State?
Time will tell.