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California: sportsbooks and cardrooms add new allies against tribal sports betting proposal
The battle between sportsbook operators and local tribes over sports betting legalization in California shows no signs of slowing down. With two primary sports betting initiatives on the November ballot, and little time left, the feud between these two initiatives continues to rise. The latest development has seen additional California cities and organizations announce their opposition to Proposition 26, which they described as a measure that “directly harms local communities.”
There are two sports betting initiatives on the November ballot. Proposition 26, a proposed constitutional amendment that would allow retail sportsbooks at Indian Casinos and state-licensed racetracks; and the sportsbooks-backed Proposition 27, which seeks to legalize online sports betting while redirecting a percentage of tax revenue to address homelessness.
State cardrooms-backed group Opposition to Proposition 26 argues that the measure “weaponizes the Private Attorney General Act (PAGA), so it can be used against tribal casino operators’ legally-operating competition.” The opposing side further argues that the measure seeks to grant tribal Casinos a “near monopoly on all gaming in California” by adding exclusivity over roulette, craps, and sports wagering.
Newly announced cities and organizations opposing Prop 26 include local governments and elected officials, among them the City of Bellflower; and Luis Roa, Mayor, City of Hawaiian Gardens. Animal rights organizations have also moved to oppose the proposal, including Central Oregon Wild Horse Coalition; Front Range Equine Rescue; Paw Project; Return to Freedom; and Santa Paula Animal Rescue Center.
As for political organizations, the San Joaquin County Democratic Central Committee has also announced its opposition to the tribes-backed proposition. Business organization San Juan Capistrano Chamber of Commerce also followed suit.
Opposers of Proposition 26 claim the proposed change in the State Constitution “allows tribal Casinos to hire private trial lawyers and replace the role of the Attorney General to sue their non-tribal competitors. As a result, the measure puts more than 32,000 jobs, $1.6 billion in wages, and $5.5 billion in total economic impact at risk.”
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Los Angeles elected officials at a press conference opposing Prop 26
Local cardrooms have described Proposition 26 as a “poison pill,” as it would force them “out of business and result in a loss of $500 million in local tax revenue statewide.” Prop 26, The California Sports Wagering Regulation and Unlawful Gaming Enforcement Act, is supported by a coalition of more than 50 California Indian tribes, led by Pechanga.
Thursday’s announcement of new cities and entities opposing Prop 26 adds to a list that already counts the California Contract Cities Association, Gateway Cities Council of Governments, Disabled American Veterans, California Hispanic Chamber of Commerce, and Los Angeles County Business Federation, among others.
However, Prop 26 also has its supporters. “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, said earlier this week.
Prop 27 is also facing rejection from a number of parties. In addition to most tribes, the proposal is opposed by the advocacy group League of California Cities, which argues the amendment would jeopardize local tax revenues; and by California’s Democratic Party, which holds majorities in the legislature and occupies the governor’s office.
A group of leaders of California Democratic and Republicans in both the Senate and the Assembly also unveiled an anti-Prop 27 stance earlier this month, including Senate President Pro Tempore Toni Atkins, D-San Diego; Senate Minority Leader Scott Wilk, R-Santa Clarita; Assembly Speaker Anthony Rendon, D-Lakewood; Assembly Minority Leader James Gallagher, R-Yuba City.
However, earlier this week, Prop 27 scored a major supporter after Major League Baseball (MLB) announced its support for the online betting plan, which is backed by a number of sports betting companies including DraftKings, FanDuel, BetMGM, Bally Bet, WynnBET, Barstool Sportsbook, and Fanatics.
California ranks among one of the biggest prizes if a sports gambling ban is overturned. Chris Gove, an investor in the sports betting space and partner in consulting firm Eilers & Krejcik Gaming, estimates that a mature, online sports betting market in California could generate as much as $3 billion in annual revenue. In comparison, industry trade publication VIXIO Gambling Compliance estimates retail-only sports betting would generate $356 million in annual gross revenue by the fifth year.
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