With the 2022 Midterm elections coming up, one state – California – has a lot more on the ballot than the usual mundanity.
This year, the state is considering two separate gambling-related referenda: Proposition 26 and Proposition 27.
So far, interested parties have spent a staggering $362 million on lobbying the state – and the public – both for and against the measures.
George Skelton of the LA Times describes the proceedings this way:
“[Sports] betting — whether online, in tribal casinos or remaining illegal — amounts to the highest-stakes fight among propositions on the November ballot in California.
At last count, an obscene $362 million has been raised to promote or oppose two initiatives to expand legal gambling in California — a gargantuan jackpot for political consultants, ad producers and TV stations. The total will probably reach a half-billion dollars by election day.
That’s the most money ever spent in a California proposition brawl. The previous record was $224 million on a 2020 referendum…
This year, Propositions 26 and 27 are being fought over by Native American tribes in California and out-of-state online gambling interests, including FanDuel and DraftKings. The winners’ pot is a multibillion-dollar stake in expanded legal wagering.”
We’ve covered these two California betting ballot initiatives before, but here’s a brief recap:
CA Prop 26 – Legalizes in-person CA roulette, dice games, and sports betting at California Indian casinos. Sportsbooks would be operated by tribes independently or in partnership with existing commercial sports betting brands (i.e. DraftKings, FanDuel, BetMGM, etc.). Note: Prop 26 is generally supported by most California Indian casino operators and opposed by established commercial sportsbook brands.
CA Prop 27 – Legalizes online/mobile sports betting outside of California Indian casinos. Sportsbooks would be operated by tribes independently or in partnership with existing commercial sports betting brands. Note: Prop 27 is generally supported by established commercial sportsbook brands and opposed by California Indian casino operators.
As you can see, these propositions are somewhat in opposition of one another.
This has resulted in certain CA tribes opposing one or both of the measures for various reasons, though most are in favor of Proposition 26 and are lobbying against Proposition 27.
Naturally, the commercial venues in line to partner with the CA tribes are against Prop 26 in a vacuum, emphasizing their primary support for Prop 27 at expense of the former proposal.
The rationale is simple: It would be generally easier for Indian casinos in CA to operate their own sports betting lounges in-house than it would for said operators to roll out sophisticated mobile sports betting suites with geofencing restrictions, KYC implementation, native iOS and Android apps, etc.
Should Prop 26 be approved and Prop 27 be rejected – which is the outcome for which more and more California lawmakers on both sides of the aisle are campaigning as the Midterms near – the existing casino interests in the state would be able to keep these goliath national gambling brands at bay.
And that’s important long term.
Why?
Well, despite the fact that these ballot measures are nominally focused on sports gambling and/or online sports gambling – the real gambit here is for online casino gambling like the sort you can enjoy at the legit California casino sites we review here.
If Prop 26 passes and Prop 27 doesn’t, CA Indian casinos will maintain their sovereignty over traditional casino gambling in the state. More importantly, they will also maintain their casino gambling profit margins.
Whether or not Prop 26 passes, if Prop 27 passes, CA casinos are in for a world of double-edged-sword hurt.
Yes, they’d make a lot of money on the front end by partnering with the likes of DraftKings et al., but these brands won’t stop at sports betting. They’ve proved that elsewhere in the USA.
They will lobby tirelessly – and spend a hell of a lot more than a paltry $362 million – for the rights to host online casino games.
This, of course, would likely be desired by the voters, so any associated ballot measure would eventually meet its petition requirements, go to a statewide vote, and be approved.
With iGaming then made legal in the state, such convenient online gambling would reduce retail CA casino traffic to a tremendous degree. It would cause tribal venues to spend more on non-gambling enhancements and reinvest in “new” approaches to attracting foot traffic. It would negatively impact the downmarket economies of the CA gambling industry.
And even though CA tribal operators would get a cut of the online gaming revenues generated, it simply wouldn’t be worth it in the end.
That’s what’s really at stake here. Sports betting is just the foot in the door.
The end goal of all online sports betting initiatives in the United States is domestic online casino gambling.
And there are no exceptions to this rule.
So, if you live in California, you should strongly consider voting no on 27. Especially if you already bet legally online at offshore CA casino sites.
(Unless, of course, you own stock in the brands trying to muscle in on the local scene, in which case a “yes” vote might pay out handsomely indeed.)