California Mayors Back Sportsbooks’ Plan, Cardrooms Fund Anti-Tribal Group

Posted on: October 23, 2021, 11:01h. 

Last updated on: October 24, 2021, 04:37h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

This past week featured a lot of movement on initiatives that would legalize sports betting in California. And chances are good there will be some more movement in the week ahead.

California sports betting
Two proposed sports betting measures that could appear on the November 2022 ballot would allow people to make wagers online from anywhere in the state, including from the famous Hollywood sign. Tribal gaming leaders, who already have a retail sports betting measure on next year’s ballot, have raised concerns about the potentially competing measures. (Image: Thomas Wolf/Wikimedia Commons)

None of it will likely settle anything, as the Golden State still looks at the possibility of having two or potentially three initiatives on the November 2022 general election ballot. All three would allow for sports betting in completely different ways.

But first, here’s a quick reset of where things stand. Earlier this year, the state verified that a petition drive backed by tribal gaming interests got enough signatures from registered voters to be included in next year’s election. That measure proposes retail sports betting only at tribal casinos and four thoroughbred racetracks. It also would allow tribal casinos to offer roulette and dice games.

Last Monday, the California state officials posted the summary for a measure backed by the state’s cardrooms and officials in some of the cities where those state-licensed facilities are located. The summary posting means supporters can start the signature-gathering process. They have until April 18 to get 997,139 valid signatures from registered voters in order to get their measure on the ballot in just over a year.

The cardroom proposal would allow for retail and online sports betting at their venues. It would also open it up to tribal casinos, racetracks, and professional sports franchises. It would also allow non-banked card games like blackjack and baccarat at the cardrooms.

Sports betting revenues would be taxed at 15 percent under the cardrooms’ proposal.

Third Sports Betting Petition May Get OK

While cardroom backers can start circulating their petitions, supporters of another measure that would allow statewide mobile sports betting await receiving the go-ahead from state officials.

That initiative is backed by Bally’s Interactive, Penn National/Barstool Sportsbook, BetMGM, DraftKings, Fanatics, FanDuel, and WynnBET.

On Wednesday, the state provided a fiscal analysis of the amended measure. The six-page report from Gabriel Petek was not too dissimilar from what he wrote about the cardroom proposal a week earlier. The legalization of mobile betting would increase state revenues, but potentially at the cost of some other tax revenues. Still, mobile sports betting is expected to bring hundreds of millions of dollars into the state’s coffers, while regulatory costs are expected to run in the mid-tens of millions.

Mobile operators would put up $100 million each for sports betting licenses in the country’s largest state. That’s under a plan that’s being proposed by several major current and aspiring sports betting operators,

The sportsbooks’ proposal would allow tribal gaming entities to also offer mobile sports betting. Their licenses would cost just $10 million. However, tribal casinos would only be allowed to offer sports betting under their casino name. It also calls for revenues to be taxed at 10 percent.

Mayors Backing Sportsbooks’ Proposal

Earlier this month, the backers of the sportsbooks’ measure filed an amended proposal that, among other things, would require the mobile operators to partner with a California-based tribe in order to operate in the state.

The proposal calls for the proceeds from sports betting to provide funding for services to combat homelessness and boost mental health services. A portion also would go toward economic development for tribal entities. It’s not too different from what the cardrooms-backed proposed initiative would fund. That calls for money to go for homelessness prevention, mental health services, public education, and affordable housing.

The proposed initiative backed by the sportsbooks received some big endorsements in the past week. The mayors of Fresno, Long Beach, Oakland, and Sacramento all came out in support of the plan. So, too, did the Regional Task Force on Homelessness for the San Diego area and the United Way of Greater Los Angeles.

Instead of leaving funding for homelessness and mental health services up to the whims of the economy, this initiative will create a stable and reliable funding source to tackle these immense challenges,” Sacramento Mayor Darrell Steinberg said in a statement.

The California Attorney General could deliver the title and summary for the sportsbooks’ initiative this week. That means it would then be able to start gathering signatures to get on next year’s ballot. It also would need 997,139 signatures from registered voters to qualify.

California Tribes Still Have Concerns

As is the case with pretty much any referendum, there will be groups supporting measures and opposing others.

On Friday, a group called Taxpayers Against Special Interest Monopolies received more than $1 million each from two cardroom casinos and a third-party vendor. That’s according to data from the California Secretary of State’s office, showing the deposits in the last two weeks. The large contributions came from The Bicycle Hotel & Casino, The Commerce Casino, and Blackstone Gaming. According to its LinkedIn page, Blackstone is a “rapidly growing third-party provider of proposition player services” in California.

The cardroom-sponsored initiative includes language solidifying its position. It says that if it and any competing sports betting initiative appear on the same ballot, then the one receiving the most yes votes would be the one implemented by the state.

While the group behind the sportsbooks’ proposal has said it considers its proposal complementary to the tribal gaming measure, tribal leaders have expressed concerns about it. At the Global Gaming Expo earlier this month, tribal leaders noted that in previous years, gaming measures have not succeeded when multiple ones have appeared on the same ballot. In addition, not all tribal leaders are on board with mobile sports betting.