The push for sports betting in California is beginning to get chaotic. And extremely contentious. Granted, this was pretty predictable. The two California sports betting bills set to appear on the November 2022 ballot have spent a ton of money trying to promote themselves and discredit each other.
In fact, no ballot initiative in United States history has ever been more expensive than California's sports betting efforts. Whenever that much money is on the table, it's only a matter of time before things turn contentious.
However, with less than two months to go before voters decide on both California sports betting bills, new information has come to light. And it's not all good.
Proposition 26 (backed mainly by tribes) and Proposition 27 (bankrolled predominantly by retail sportsbooks) have made some pretty significant claims. For instance, advertisements for Proposition 27 have stated tax revenue generated from the integration of legal sports betting will go directly toward combating homelessness in California. Opponents of Proposition 26, meanwhile, have argued that it would put all of the state's card rooms out of business.
Many have taken these sentiments at face value. But the Sacramento Bee recently staged an investigation into both California sports betting bills and discovered some discrepancies with public claims. As it turns out, their findings could have a major impact on the future of sports betting in California.
Is Proposition 27 the Most Misleading of the California Sports Betting Bills?
According to the Sacramento Bee's report, Proposition 27 may be the more misleading of the two California sports betting bills.
Take, for example, their reported commitment to addressing homelessness. It isn't exactly true. From the Sacramento Bee:
"Prop. 27 would potentially generate hundreds of millions in state revenue, but not more than $500 million annually, according to the Legislative Analyst’s Office. Sports betting companies would have to pay 10% of their profits (totaling tens of millions) into a new fund to cover state regulatory costs. Then 85 percent of the rest would go toward addressing homelessness and gambling addiction. The state already spends billions on homelessness — over $3 billion earmarked for this year and $4 billion spent last year — making more cash an unconvincing 'solution.' The promise of long-term funding has not drawn widespread support from California’s homeless service providers and low-income housing builders."
On some level, these findings are vindicating. Proposition 27 would actually funnel a bunch of money toward combating homelessness. But given how much the state of California already spends on this exact issue, the gesture of throwing more cash at the problem rings hollow.
Proposition 27 essentially frames its homelessness incentives as a solution. Really, it's sort of aimless. There is no easy solution to homelessness, but a genuine attempt at providing one would include the construction and implementation of programs and specific goals for the money raised.
Proposition 26 Will Put Card Rooms in California Out of Business
Nationally, Proposition 26 has received more criticism than Proposition 27 because of how limited a California sports betting rollout would be. The former initiative legalized gambling only on-site at a select group of casinos. This has been painted as damaging to not only retail online sportsbooks, but potentially harmful to smaller tribes that don't have casinos and, as such, won't have the chance to offer on-site sports betting.
The Sacramento Bee did find the above idea overblown. Smaller tribes will have the opportunity to benefit from Proposition 26. But the rumors about this California sports betting bill becoming a death knell for card rooms are actually true.
Per the report from the Sacramento Bee, Proposition 26 permits "anyone to sue entities that they believe are breaking state gambling laws for penalties up to $10,000 per violation." And because "Tribal casinos have long seen card rooms as competition, and allege they skirt the law by letting the house deal in poker, blackjack, and baccarat," it's expected a flurry of lawsuits against said card rooms will be filed by the tribes.
If that happens, it's believed most of the card rooms will be forced out of business, either through verdicts rendered against them or under the weight of lofty legal fees.
Which California Sports Betting Bill has the Advantage Entering the Election?
Most originally believed that Proposition 27 would have the edge over Proposition 26, even if both measures passed in November. The idea of limiting gambling to in-person transactions rankled many. There is unparalleled convenience in being allowed to legally sign up with any odds provider on the internet—including every site that appears in our reviews of the top online sportsbooks.
But this recent report from the Sacramento Bee, which has since been widely circulated, pokes a bunch of holes in many of the claims and promises made within Proposition 27. From the misleading commitment to solving homelessness to confirmation that more than 90 percent of revenue generated by commercial online sportsbooks will be funneled out of state, the details are beginning to work against Prop 27.
This, of course, was the hope all along for those who support Proposition 26. This California sports betting bill may not promise ease of access, but it ensures a bulk of whatever proceeds are reaped will remain almost exclusively within the state.
Is that enough to give Prop 26 the edge? Or does Prop 27 still have the inside track? Better yet, will both of these California sports betting bills pass, thereby paving the way for more legal issues? Or will neither of them get through, in which case California will remain without legal sports betting until at least 2024?
We'll know the answer this November.
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