While California voters soundly rejected competing ballot measures to legalize sports betting in the state on Nov. 8, there is still hope. However, residents who want to place sports bets legally will have to wait a few years.
For months it’s seemed inevitable that California online gambling would eventually join the lucrative legal sports betting market that now includes over 30 states. Online sportsbooks and California gaming tribes want the activity to be legal in the state with the biggest economy in the nation. But the major players who backed the most recent ballot propositions should take heed of the missteps that doomed their efforts this year.
The Bad Taste of Negative Ads
For months leading up to the election, voters in the state were bombarded with negative ads criticizing the ballot measures. Backed by wealthy Native American tribes, social justice groups, and both major political parties, Prop 26 would have allowed sports betting at tribal casinos and horse racing tracks.
Prop 27, supported by the leading online sportsbooks including FanDuel, DraftKings, and BetMGM, aimed to legalize online sports betting. These mobile betting companies have made significant strides in states where sports wagering is legal. Also, FanDuel, DraftKings, and BetMGM already have relationships with some state’s professional teams via partnerships with the NHL, NBA, WNBA, and MLS.
However, the anti-Prop 27 movement bankrolled hard-hitting, negative TV ads, including one
that claimed, “when the out-of-state corporations behind Prop 27 look at California, they see nothing but suckers.”
Pro Prop 27 campaigners tried to hit back and focused on the expected revenue for social services, stating that the measure would help fund efforts to alleviate homelessness. The Prop 27 advocates also took shots at some tribal casinos that allow 18 and over customers claiming those establishments don’t protect minors.
“What California voters object to is the vulgarity of having campaign ads thrown in their face at every turn,” Sonoma State University professor David McCuan said. “It has that backlash effect.”
Too Much Money at Stake to Stay Out of the Game
Sports betting is a billion-dollar industry, and states where it is legal are enjoying a new source of revenue from it. California’s 69 licensed tribal casinos already bring in $9 billion a year. Adding retail sportsbooks to their facilities would garner another $3.1 billion, according to a report from research firm Eilers & Krejcik Gaming.
Tribes that own casinos have indicated that they are open to finding ways to bring sports betting to the state in a way that doesn’t infringe on tribal sovereignty and keeps revenues in the state. The Chicken Ranch Tribe of Me-Wuk Indians already has plans to enter the industry in a creative way via a Class II sports-themed bingo app. Class II gaming in California does not have state government oversight. The tribe also invested in the sports betting app Oddsium which will launch in New Jersey.
Chicken Ranch Tribal Chairman Lloyd Mathiesen anticipated the failure of the propositions and made plans: “We need something else to be there.”
He commented on sports betting in the state in general: “It’s gonna happen. I mean, everyone wants it.”
Next Steps to Legalization
DraftKings CEO Jason Robbins indicated in October that the sports betting company is already looking at the 2024 election cycle. Tribal casinos are also planning for 2024. However, the next movement to legalize sports betting may come via the state legislature. It’s possible that politicians could pass a proposal to be included on the 2024 ballot.
It’s too early to predict how the next wave of action to legalize sports betting in the state will take shape. One thing is sure. The online sportsbooks will have to make some compromises and possibly partnerships as they now see the sheer power the tribes have in the state.
“Our coalition knew that passing Prop 27. would be an uphill climb, and we remain committed to California,” Nathan Click, a spokesperson for the Yes on 27 campaign, said after the election. “This campaign has underscored our resolve to see California follow more than half the country in legalizing safe and responsible online sports betting.”