Through all the hemming and hawing and bickering over the future of online sports betting in California, prevailing sentiment has always defaulted to inevitability. There will eventually be legal online sports betting, because there just has to be. California is the largest sports market in the United States. Billions of dollars every year are being left on the table each and every year by letting the status quo ride. It won't stand indefinitely.
Except, what if it does?
The November defeat of Proposition 27, which would have legalized online sports betting throughout California, was something of an eye-opener. The vast majority of Californians voted against it—overwhelmingly so. Some industry experts have determined this was the result of overexposure. Prop 27 supporters spent too much time and money advertising in favor of itself and against its counterpart, Proposition 26, which legalized only in-person sports betting at California casinos.
However, the California casinos themselves see the defeat of Prop 27 as something more telltale. In fact, officials associated with these tribal operations believe California voters have now made it clear they don't want legal online sports betting.
Do California Voters Really Oppose Legal Online Sports Betting?
Critics will be quick to point out that both California sports betting measures failed during the November election. That would suggest voters don't oppose legal online sports betting, but that they are against California sports betting in general.
Tribal officials have repeatedly stated this isn't the case. Recent comments from Jacob Mejia, the vice president of public affairs for Pechanga, which owns a large casino and supported the initiative to allow sportsbooks at tribal gambling houses, are creating buzz throughout the industry. According to the Associated Press, he said the election results were not a rejection of sports wagering, but an “epic repudiation of online gaming and online sports betting.”
This can come across as hypocritical. Mejia represents tribal interests. And California tribes see legal online sports betting as an existential threat to their own business model. A majority of sports wagers placed throughout the United States are now processed via mobile sites and applications. Brick-and-mortar casinos can't necessarily compete with established and highly reviewed top online sportsbooks.
At the same time, there may be objective merit to Mejia's comments. More than 80 percent of California voters wound up opposing Proposition 27. That's an overwhelming disapproval rating. And based on that number alone, it would be reasonable to assume Californians are more open to on-site sports betting.
Yet, that's not necessarily the case.
California Casinos Stance on Legal Sports Betting Could be Misleading
Indeed, we can't refute the 2022 voting results. It doesn't bode well for California legal online sports betting that over 80 percent of the voting population expressed distaste for it. But on-site sports betting for tribal casinos and four state racetracks didn't fare that much better. Over 70 percent of the voting population also turned away Prop 26 at the polls.
This is an ominous sign for both sides of the California sports betting argument. Prop 26 and Prop 27 each failed miserably, so the state's constituents might just be flat-out against legal wagering in general.
Then again, this would go against the polls conducted by the University of Berkley prior to the 2022 elections. Their results found that a majority of California voters approved some form of legal sports betting. And that's why industry experts have focused so much on the over-saturation of advertising. They believe both Prop 26 and Prop 27 would have stood a better chance at the polls if they didn't inundate Californians with conflicting information.
This had led to calls for the overhaul of future California sports betting proposals. Industry experts think the state could miss another opportunity to legalize wagering in 2024 if the approach for both tribes and retail sportsbooks don't change. And they might be right.
The Future of California Sports Betting Remains on Shaky Ground
Compromise is at the top of the wish list for people who want California sports betting. The legalization process becomes so much easier if tribal casinos and retail sportsbooks find a way to work together and strike an agreement that mutually benefits both.
For the time being, however, that doesn't seem possible. As Mr. Mejia's comments to the Associated Press reflect, there is still a divisive relationship festering between the two sides. This dynamic doesn't appear on the verge of shifting in time to push a collective California sports betting bill through the House of Representatives and Senate. If anything, it feels more likely the 2024 election will yet again see separate sports betting measures on the ballot.
That is not an ideal scenario for either party. But it's especially damaging to retail operators pushing for legal online sports betting throughout California. The tribal casinos have more supporters throughout the government. Many officials came out in support of Prop 26 while bemoaning the misleading nature of Prop 27.
This angle will have to be the focus of online sports betting supporters if things don't change. The backers of Prop 27 failed to adequately control and communicate their messaging. Towards the end of election season, Prop 26 was spending more money on disproving Prop 27 rather than advocating for itself.
If online retailers can do a better job of clarifying the terms of their proposal and how it would benefit the state economy, they'll stand a much better chance with voters in 2024. If they can't do that, then online sports betting in California may not arrive until after the 2026 elections.
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