California voters will determine this week whether The Golden State will join the booming US online sports betting industry as two competing initiatives take the ballot in the 2022 midterm election.
The ballot initiatives, Proposition 26 and Proposition 27, are the result of an expensive battle between industry leaders like DraftKings and FanDuel and California’s Native tribes who hope to maintain their dominant position in the state’s gambling market.
As The Washington Post reported on Nov. 3, “The expected result of financial juggernauts spending more than $400 million on clashing ads for and against dueling sports betting propositions: mutual defeat. Polls have suggested both propositions probably will lose, victims of widespread voter confusion and apathy. The campaigns have slowed spending, and sports betting executives have signaled they are now focused on trying again with California voters in 2024.”
Disclosure: FanDuel is a part of Flutter Entertainment, a holding company that PokerStars and PokerNews are also part of.
Proposition 26: Sports Betting in Tribal Casinos
The first initiative, Proposition 26 would allow “in-person sports betting at racetracks and tribal casinos” and change the California Constitution and state law “to allow the state’s privately operated racetracks and tribal casinos to offer sports betting.”
In addition to legalizing in-person sports betting, Proposition 26 would also allow roulette and games played with dice at tribal casinos, which currently offer card games like poker and blackjack.
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Supporters of the proposition, including the Federated Indians of Graton Rancheria, Pechanga Band of Indians and Yocha Dehe Wintun Nation, say that passing it will lead to “increased state revenues, possibly reaching tens of millions of dollars annually,” some of which “would support increased state regulatory and enforcement costs that could reach the low tens of millions of dollars annually.”
According to Cal Matters, opponents argue that “the new gaming law enforcement mechanism will be used by tribal casinos to sue competing card rooms and drive card rooms out of business.”
Proposition 27: Online Sports Betting
In contrast to the in-person sports betting proposal is Proposition 27, which would allow “tribes or gambling companies to offer online sports betting” and for licensed gambling companies to “offer sports betting under their own name or brand” if they partner with a tribe through a tribal-state impact.
Additionally, the proposition “limits licenses to larger companies, such as those that have online sports betting licenses in at least ten U.S. states or territories.”
Supporters of the online sports betting proposal include industry leaders like DraftKings, FanDuel and BetMGM as well as the Santa Rosa Rancheria Tachi Yokut Tribe, Middletown Rancheria of Pomo Indians and Big Valley Band of Pomo Indians, according to Cal Matters.
Those supporters note that the proposal would create the California Online Sports Betting Trust Fund and allocate money “to address homelessness and for gambling addiction problems,” while opponents, including both state government parties and Gov. Gavin Newsom, say mobile sports betting would increase underaged gambling.
Still No Movement for Online Poker
If recent reporting and polling is any indication, it seems unlikely that California voters will pass either proposal, meaning California probably won’t be joining the more than two dozen US states with legalized sports betting.
That is bad news for those waiting for legalized online poker to make its way to the West Coast.
Attempts in recent years to regulate online poker in California have failed and, in 2018, attention shifted to sports betting as the US Supreme Court struck down a federal law banning commercial sports gambling.
Many hoped that sports betting, if approved, could open the door for discussions about legalizing online poker in the state. With the 2022 midterm proposals unlikely to pass, it doesn’t look like that door will be opening any time soon.
That said, a recent court ruling in Rhode Island on the federal Wire Act, a ruling that was seen a big victory for US online poker, could lead more states to legalize online poker. Time will tell if California is one of those states.
The 2022 California midterm elections take place on Nov. 8 and early voting began in October.
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