The California midterm elections include several heated ballot measures, including dueling sports betting propositions. California’s tribes back one and private sportsbook companies, like DraftKings, FanDuel, and BetMGM back the other. The tribal initiative is on the ballot, and the private company initiative is awaiting signature verification. So, Californians could have two sports betting initiatives to vote on.
The tribes behind the tribal initiative have already released attack ads against the private company initiative. Some of those ads’ claims are either false or misleading. Here are the five most common false or misleading statements in the sports betting attack ads.
California Casinos reached out to Stop the Corporate Gambling Proposition and Protect Tribal Sovereignty and Safe Gaming for comment.
Myth 1: Gambling Will Be Available To Anyone Anytime
One attack ad claims that online gambling will be available to “anyone, anytime.”
When bettors create sportsbook accounts, they have to go through identity verification. That includes a step where customers enter the last four digits of their social security numbers. (Sometimes they have to enter the whole thing, but it’s uncommon.) If a sportsbook can’t confirm a bettor’s age, then bettors must provide a government document, like a driver’s license, to prove their identities.
These measures prevent minors from signing up for online sportsbook accounts at commercial sportsbooks.
Myth 2: Every Electronic Will Become A Gambling Device
The same attack ad claims that mobile sports betting would turn “every cellphone, laptop, tablet, and even video game console into a gambling device.”
Sports betting apps have to be downloaded and signed up for voluntarily. Bettors aren’t forced to participate in online sports betting any more than they’re forced to visit tribal casinos.
Additionally, bettors can choose to limit or self-exclude themselves from sports betting apps. After bettors create their accounts, they can set an amount of time for the sportsbook to not allow them to place bets. These times can be as short as a week or as long as a year or two.
That’s dramatically different from video gaming terminals in states like Illinois. Those machines have no accounts tied t
o them. So, there are no self-exclusion options available. Those machines turn trips to the grocery store into dangers for gambling addicts and problem gamblers.
However, online sports betting apps have controls that mitigate those kinds of dangers. Bettors should remember that during the California midterm elections.
Myth 3: Online Sports Betting Will Increase Addiction, Financial Ruin, And Homelessness
The ad claimed that online sports betting would increase “addiction, financial ruin, and homelessness” in California. This claim is misleading.
The claim that online sports betting will increase addiction is partially true. Other states, like Colorado, saw increases in calls to their problem gambling help lines after sports betting legalization. However, Colorado also underfunded their problem gambling programs, so its helplines were understaffed.
Unaddressed, problem gambling and gambling addiction can lead to financial ruin for families. The claim that homelessness would increase comes from a link between substance abuse and homelessness. It also attacks the problems that the private sportsbooks’ initiative claims to address through its tax scheme. If mobile sports betting were legalized, Californians who wanted to avoid betting could create accounts and self-exclude or set time and wager limits.
Additionally, both initiatives fund problem gambling programs. The tribal initiative taxes sports betting at 10% and allocates 15% of its tax revenue to problem gambling programs. That directs 1.5% of gross gaming revenue (GGR) to problem gambling programs. The private company initiative allocates 1% of GGR to problem gambling programs. The amounts are similar, but the tribal initiative directs a higher proportion of gambling funds toward problem gambling.
However, mobile sports betting would likely increase the pool of taxable sports betting funds. Mobile sports betting handle, GGR, and tax revenue can be about 10 times higher than retail sports betting. For example, Louisiana launched retail sports betting two months before online sports betting. In its second month, online sports betting handle made up over 88% of sports betting handle. So, the private sportsbook initiative could fund problem gambling programs in greater amounts because of the higher revenue potential. All nuance is lost in these attack ads.
Myth 4: Exposing Children To Online Gambling After California Midterm Elections
The most misleading claim in the attack ad is that online sports betting would expose “millions of children to online gambling.”
The identity verification measures discussed in myth two apply here, too. Checking the last four digits of a child’s social security number reveals a user’s birthday, telling sportsbooks how old the potential user really is. It’s a problem that a VPN can’t solve. (VPNs can trick sportsbooks into thinking a user is in a legal state when the user is really in an illegal state).
However, the ad ignores the myriad ways children are already exposed to gambling. A 2017 meta-study in Australia cited a nationwide study that found that 42.4% of Australian children aged 15-17 participated in card games at home. Another 48.7% played scratch-off tickets. Further, the same study found 36.4% of young people had friends or family members place bets for them. Anyone who wants to address young people’s exposure to gambling needs to start at home.
But an even better place to address children’s exposure to gambling is social casino games. These are free games with fictional currencies that offer slot and table games online. They often include currency packs that can be purchased with real money and premium currencies redeemed for cash prizes. An Axios report found that 98% of the 1,132 social casino games they analyzed had age ratings of 12+ or lower.
There’s no reason for parents to panic, though. In the same Axios report, Timothy Fong, a co-director of the Gambling Studies Program at UCLA, recommends parents talk to their children about the realities of gambling the same way parents would talk to their children about drugs or alcohol.
There’s legitimate concern about childhood exposure to gambling. But it’s not from online sportsbooks.
Myth 5: Online Sports Betting Undermines Tribal Sovereignty
While not stated explicitly in this ad, it’s a recurring theme in other attack ads. For example, Protect Tribal Sovereignty and Safe Gaming claims that if California allows online gambling by commercial sportsbooks, “the promise of gaming exclusivity between California voters and our Native American Tribes will be broken.”
This claim is false. California tribes have never had exclusive rights to gambling. California’s card rooms, state lottery, and horse tracks alone disprove that self-evidently untrue statement.
However, history shows how spurious this claim is too. In 2000, Californians approved Prop 1A, which legalized casino-style gambling on tribal reservations. It resolved a legal technicality that threatened tribal gaming, which was important for the tribes. But it didn’t say that Native American tribes gained exclusive rights to offer gambling in California.
The same goes for the tribal-state compacts that regulate tribal gaming. The compacts state which types of gambling tribes can offer without state intervention and which ones the state has to approve. That’s a standard arrangement for each state with tribal gaming. It was created by the 1988 Indian Gaming Regulatory Act. Gaming plays an important role in tribal reservation economies. But they don’t have exclusive rights to gambling.
What The Sports Betting Fights Are About In The California Midterm Elections
The California midterm elections will include a battle over who will control California sports betting: California’s tribes or private sportsbook companies. The tribal attack ads are trying to convince Californians that allowing private sportsbook companies to offer online sports betting will be bad for the state’s tribes. It won’t eliminate visits to tribal casinos. Those are still the best places to go for traditional casino gaming.
If the online sports betting companies were offering online casino gaming, that would be concerning for tribal gaming. Being able to play slots and table games online would eliminate the need to travel to tribal casinos.
But since sports betting would be a new form of gambling, it wouldn’t necessarily cut into tribal gaming revenues as savagely as online casinos would. If California’s Gaming Commission pulls its weight and its problem gambling programs are properly funded, online sports betting could be one of the largest in the United States and maintain a critical safety net for problem gamblers and gambling addicts.
But those kinds of musings don’t fit into 30-second attack ads.