The tide could turn against major online sports betting and their joint efforts to pass Proposition 27, a legislative initiative that would legalize online sports betting in California.
With just two months left until voters head to the polls on Nov. 8 to decide the issue, the state’s indigenous tribes have gained a valuable ally in their effort to defeat the government-backed bill. seven of the major US legal sports betting operators.
Last Friday, the California State Association of Counties (CSAC), which represents the state’s 58 counties, voted against Proposition 27, joining the broad NO on 27 coalition that includes the California League of Cities, both Democratic and Republican Parties, top legislative leaders, major teachers’ unions, and more than 50 indigenous tribes funding the NO campaign.
“California counties are on the front lines of the homelessness and mental health crisis, providing safety net programs and services to homeless residents. We have carefully reviewed Proposition 27 and have concluded that it was a bad deal for the counties and for California,” said Graham Knaus, executive director of the California State Counties Association. “Make no mistake, Prop 27 is NOT a solution to homelessness.”
NO out of 27 suggests gambling addiction is on the rise
CSAC’s opposition follows last Thursday’s press release from the NO on 27 committee that released data from several states regarding the skyrocketing number of calls to problematic hotlines.
According to the release, gambling addiction may be on the rise in states that have reported a massive increase in calls to problem hotlines since online sports betting became legal in 2018.
The Problem Gambling Councils of New Jersey and Pennsylvania reported that calls to their problem gambling hotlines soared 500% and 285%, respectively, while the Department of Health and Human Services of Michigan reported an increase of almost 300%.
While this latest anecdotal evidence of addictive gambling behavior hasn’t gained much traction in the California media, CSAC’s ruling certainly lends additional credibility to the no side – and is likely to feature in future advertisements. who describe Proposition 27 as misleading and misleading.
Meanwhile, the tribal coalition hopes Californians will support their rival Proposition 26, which would allow tribal casinos and state-licensed racetracks to host retail sports betting.
In terms of optics, tribal attack advertisements have repeatedly pointed out that the official wording of Proposition 27 is deliberately misleading, as sportsbooks have made a calculated marketing decision to name their legislation the “California Solutions to Homelessness and Mental Health Support Act”.
Indeed, a bill whose primary goal is to legalize online sports betting in California is masquerading as an altruistic initiative by drawing voters’ attention to the purely charitable provision of the legislation.
The fundamental impulse of Prop 27 is to provide online betting services to Californians and generate billions of dollars in expected revenue for major sportsbooks.
That’s why the tribes have launched a series of attack ads that accuse operators of “deceptive marketing” and hammer home a “Homelessness Solutions” bill that obscures its true intent.
Sports betting too kind… to themselves
The NON à 27 Coalition further argues that the tax rate that sportsbooks wish to impose on themselves is too generous. The tribal group believes the amount allocated to funding homeless care and mental health programs is a pittance compared to the billions of dollars that ‘commercial operators’ will take out of the pockets of Californians – and send out of state.
According to the bill drafted by the operators, California would tax all betting revenue at 10%, which is relatively low when New York, Pennsylvania and New Jersey – three of the largest sports betting states – impose levies. 51%, 36%, and 13% on online betting revenue, respectively.
Of that 10% total, the Treasury would be legally required to allocate 85% of that tax revenue to homeless care and mental health programs. The remaining 15% would be split among tribes not currently participating in the games.
Given that California Governor Gavin Newsom has already allocated $12 billion for such relief measures over the next two years, projected Prop 27 sports betting revenue would only add 4% to that amount. .
In addition, there is a minor contradiction implicit in the legislation, with regard to the mental health care aspect, which can be interpreted as a vague euphemism for “treatment of gambling addiction” – it is claimed that the project Bill will fund a “solution” to a problem that he will be partly responsible for creating.
Analysts Predict Prop 27 Defeat
And just when it appeared that last week’s bad news cycle for sports betting couldn’t get any worse, a team of analysts from Eilers & Krejcik Gaming predicted that Proposition 27 and Proposition 26 were doomed. to failure.
“The political power and deep pockets of interest with the dogs in this hunt … have us leaning negatively on the prospects of legalizing sports betting in California this fall,” reads the research report released last week.
Voter confusion has been cited as one of the main factors preventing both the sportsbooks and the tribes from securing the 51% of the vote needed for their ballot initiatives to become law. Two rival measures on the same ballot, for the same question, dilutes the appeal of each proposition as opposed to a single up-vote or down-vote measure:
“Two competing sports betting metrics occurring consecutively on the same ballot is unprecedented in the political history of sports betting in the United States, complicating efforts to predict its outcome,” the report read.
Inherent Flaw and Lack of Vision in Proposition 27
The confidence of the sports betting masterminds behind Proposition 27 may have been too clever for their own good. They opted for a clever and inspired marketing ploy to set aside funds for homelessness and mental health to provide humanitarian justification for voters to approve a bill to legalize online sports betting.
But that may have simply muddied the waters and ignored a real chance to raise money for green energy development, water conservation, school funding, women’s shelters, food security programs family and similar causes that would have had much broader appeal for the California progressive. leaning electorate.
Such a blanket measure would have been harder for the tribes to attack, while immunizing sports betting against what is described as a very narrow and cynical attempt to woo voters.
An August 31 column by Los Angeles Times economics writer Michael Hiltzik closed out the very bad/not-so-good/pretty-awful week in sports betting:
“…Gambling companies are all corporate citizens in their own way, but do you really think they care about California’s homelessness crisis instead of drinking down potential gambling profits? money online in the vast California market?”
“Neither do I.”