California sports betting boils down to Propositions 26 and 27

·3 min read

As legalized sports betting continues to sweep the nation, the states that host the most NFL franchises (California and Florida, three each) continue to defer their gambling on football to the barroom bookies.

In both states, prior deals with Native American tribes have made the situation a political hot potato, as the existing gambling interests try to fend off a tidal wave that is otherwise sweeping the nation.

For California, the fight has landed on the ballot, in the form of two propositions: 26 and 27.

The former favors the tribes. If passed, it would allow “on-site sports wagering at only privately operated horse-racing tracks in four specified counties,” with the tribes in full control of the wagering. It also would expand the table games permitted in tribal casinos, with roulette wheels and craps tables being installed.

Proposition 27 opens the floodgates for online and mobile sports wagering. It would allow the likes of FanDuel, DraftKings, and BetMGM to apply for licenses. As noted by Bill King of Sports Business Journal, any sports book that wants to do business in California must be licensed in at least 10 other states.

There’s another significant wrinkle. Even though the tribal interests oppose Proposition 27, any sports book that does business in California must give a significant taste to the tribes. The price of a license could be, per King, $100 million.

That’s also the estimated amount that each side will spend on the fight over Proposition 27. Still, that’s peanuts in the grand scheme of things. The most populous state in the country would generate billions in tax revenue. (Already, billions in California tax revenue have been lost in each of the four years since the Supreme Court allowed all states to embrace sports wagering.)

As explained recently by Brad Allen of LegalSportsReport.com, the tribes oppose Proposition 27 for multiple reasons. They claim that they’ve been promised sovereignty over gambling in California. They also are pushing the contention that Proposition 27 would turn every phone, computer, and tablet into a gambling device, making it harder to ensure responsible gambling. (That argument would have a bit more credibility if the tribes weren’t also trying to score the ability to offer in-person sports betting, and to otherwise protect their own gambling turf.) They also fear that online and mobile sports betting will eventually become online and mobile casinos, which would take money away from the tribal-owned in-person casinos.

King explains that the California Democratic Party will oppose Proposition 27, and that it will take no position on Proposition 26. This speaks to the deeper push-and-pull that will make yet another political issue into not what the people want but what the politicians think the politicians need.

Regardless, the voters will have a chance to cast a ballot on both propositions. If California wants to stay with the times — and to capture billions that otherwise are being wagered legally across state lines or illegally from Siskiyou County to San Diego and all points in between — the voters will embrace both Proposition 26 and Proposition 27.

It would be different if the fight were focused on the philosophical or moral issues arising from gambling. It’s not. It’s about local interests trying to retain the revenue and influence they enjoy, to the detriment of the state’s tax revenues and the citizens’ ability to engage in activities that are embraced in an ever-expanding number of states.

The irony, of course, is that the state that routinely has been viewed of being ahead of the times is already lagging. If Proposition 27 fails, California could end up being left in the dust of a new gold rush that would prompt Horace Greeley to make a one-word revision to his classic mantra.

Go East, young man.

California sports betting boils down to Propositions 26 and 27 originally appeared on Pro Football Talk