California Sports Betting Ballot Questions Heading for Defeat?

Written by:
Gilbert Horowitz
Published on:

Analysts at Southern California-based Eilers & Krejcik Gaming believe that two sports betting questions appearing on the ballot in the California November election will fail to get the required 50 percent voter approval. 

Both sides are spending millions (over $360 million thus far) in campaign dollars advertising across the state. Eilers & Krejcik Gaming claim the competiting messages are only serving to confuse voters.

“The political power and deep pockets of interests with dogs in this hunt … have us leaning negative on California’s sports betting legalization prospects this fall,” Eilers & Krejcik analysts Becca Giden, Chris Krafcik and Adam Krejcik wrote in a research report released last week that looks at Proposition 26 and Proposition 27.

California Proposition 26, Legalize Sports Betting on American Indian Lands Initiative (2022) - This referendum would allow for sports betting on tribal land and at four horse racing tracks.  Gambling attorney I. Nelson Rose believes the bill unnecessarily seeks to punish the state's card rooms out of vengeance.

"The tribes are furious that the clubs are offering '22'. making small changes in the rules for blackjack and throwing some jokers into the deck.  Worse, the clubs got the State Legislature to allow games with a dealer-banker, usually an outside company with more than enough money to cover the bets of all the other players.  The only limitation is the position must be offered to everyone at the table every third hand.

"The tribes claim that in practice, the clubs’ dealer-banker position does not actually rotate, making the games indistinguishable from casino banking games.

"So they sued, alleging unfair competition and public nuisance."

The coalition is supported by several American Indian tribes, including the top donors to the campaign—the Pechanga Band of Luiseno Indians, Yocha Dehe Wintun Nation, Agua Caliente Band of Cahuilla Indians, Federated Indians of Graton Rancheria, and the Barona Band of Mission Indians.

Proposition 27 is being pushed by seven sports betting operators located outside the state, including DraftKings, FanDuel and BetMGM.  They would partner with specific tribes to offer mobile sports gambling.  Some of the tribes support this measure and would be the likely candidates to join forces with the likes of a DraftKings or FanDuel.

Not on board with either proposition - or maybe it's better to say, they'd be fine with either - Caesars Sportsbook has a relationship with two tribes backing Prop 26.  Of course they would be fine with the passage of a mobile measure.

Eilers & Krejcik believes mobile sports betting would generate $2.8 billion in annual revenue, while retail-only sports books would rake in $1.3 billion annually.

The online sports betting measure would require a licensing fee payment of $100 million.

Major League Baseball this past week came out in support of the mobile sports wagering measure.

On Friday, the California State Association of Counties (CASC) announced its opposition to Proposition 27.

That referendum is being disguised as a means to help homelessness in the state.  The CASC isn't buying it.

California’s counties are on the front lines of the homelessness and mental health crisis, providing safety-net programs and services for unhoused residents,” said Graham Knaus, the association’s executive director, in a statement. “We carefully reviewed Prop 27 and concluded it’s a bad deal for counties and for California. Make no mistake, Prop 27 is NOT a solution to homelessness.”

"A large and growing coalition of Indian Tribes, social justice advocates, teachers, parents, homeless and mental health advocates, business, public safety and labor leaders all strongly oppose Prop 27," Kathy Fairbanks, spokesperson for Yes on 26 and No on 27 campaigns, told ESPN in a statement. "The measure would legalize a massive expansion of online gambling that will turn every cell phone, laptop, gaming console and tablet into a gambling device. Worse, there's no fool-proof way to ensure kids aren't gambling online. The out-of-state gambling corporations funding Prop 27 wrote it so they take 90% of the profits out of state, leaving little for California. We're confident voters will reject this deceptive, dangerous measure in November."

- Gilbert Horowitz, Gambling911.com

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