In the upcoming midterm election, California has two propositions on the ballot related to sports betting. Prop. 26 titled “Legalize Sports Betting at Tribal Casinos,” and Prop. 27 titled “Allow Online Sports Betting” — Prop. 27 in particular is a lot more complicated than it seems.
Prop. 26 is a bit more straightforward than Prop. 27. If Prop. 26 passes, tribal casinos will be able to offer roulette and dice games. Sports betting would also be offered at racetracks. Being able to offer dice and roulette games means more profit for California tribes.
Prop. 27 is more complicated. While Prop. 26 would only allow sports betting in tribal casinos, Prop. 27 would allow online sports betting, which means instead of having to place bets at a sporting event, you could place a bet at home through sites like Draftkings and FanDual.
The proposition would require various payments to the state. Any tribe or gaming company with a sports betting license would have to pay 10% of bets made every month to the state. Tribes will have to pay $10 million when a five-year license is renewed and another $1 million every time it is renewed. Gambling companies will have to pay $100 million for their license and another $10 million each time it gets renewed.
What will the state do with all that money? The payments will go into the California Online Sports Betting Trust Fund (COSBTF). The money will first be used to cover state regulatory costs and then 85% to address homelessness and gambling addiction programs.
The bill is designed for the majority of the revenue received from bets to go toward homelessness in order to make it more appetizing to voters — which is the main reason the Santa Rosa Rancheria Tachi Yokut Tribe, Middletown Rancheria of Pomo Indians and Big Valley Band of Pomo Indians support Prop. 27. However, groups such as the Coalition on Homelessness San Francisco and California Coalition for Rural Housing oppose the proposition. Homeless advocates argue that with $2 billion already going toward homelessness, throwing more money at the problem won’t actually fix it.
Prop. 27 is funded by Draftkings, FanDuel, BetMGM and other gaming companies. It’s supported by three Native American tribes, Santa Rosa Rancheria Tachi Yokut Tribe, Middletown Rancheria of Pomo Indians and Big Valley Band of Pomo Indians. However, there are 50 Native American tribes and tribal organizations that oppose the proposition.
The 50 tribes against Prop. 27 say if 27 passes it will threaten their self-efficiency and drive business away from their casinos. If people place bets online, they won’t need to go to tribal casinos, resulting in less overall revenue. Gaming companies would only have to partner with one tribe, leaving behind the vast majority of California tribes.
Not only will the proposition hurt tribes, but it will make gambling in California an even bigger problem than it already is. The California council of problem gambling estimates that 1,200,000 Californians have a gambling problem. Gaming revenue reached $53 billion in the U.S. last year, and that number is expected to jump even higher with more states adopting online sports betting.
Allowing for online sports betting will make it even more accessible to those in recovery.
Prop. 27 is only on the ballot because of funding from wealthy out-of-state gaming companies, and those companies are the only ones that would benefit if 27 passes. Both the California Democratic Party and the California Republican Party oppose Prop. 27. If you care about California tribes, prevent more people from falling into debt through a gambling addiction.