Propositions 26 and 27 would usher in a new era of sports wagering in California. The competing measures pit tribal gaming interests against online wagering companies including FanDuel and DraftKings. Photo by Tim Hart on unsplash.com

Sports wagering has taken the front seat in discussions since the Supreme Court’s decision in 2018 to strike down the Professional and Amateur Sports Protection Act (PAPSA) signed into effect by President George H.W. Bush in 1992.

Following the Supreme Court’s decision, states throughout the country have taken steps to implement legally authorized sports wagering through various means, with online sports books such as DraftKings and FanDuel playing a large part in the discussion.

California, however, is home to the largest number of gaming tribes (68), more than twice as many as second place Oklahoma (32). Despite having 77 casino locations compared to Oklahoma’s 140, the number of gaming tribes creates a large amount of legislative traffic, with various tribes supporting both propositions 26 and 27.

Here’s a breakdown of the two sports betting propositions coming up on the November ballot.

 

Proposition 26

Prop 26 authorizes federally recognized Native American tribes to operate a variety of new gaming options, including roulette, dice games and sports wagering on tribal lands.

The proposition would impose a 10% tax on sports wagering profits at horse-racing tracks and would direct a portion of taxable dollars to enforcement and programs aiding problem gamblers.

Prop 26 would prohibit marketing of sports wagering to individuals under 21 and would authorize private lawsuits that enforce other gambling laws.

The proposal would not allow sports wagering in any other capacity, including online options such as DraftKings, FanDuel and other online or app-based gaming alternatives, and would require individuals to be physically present to place bets on sports wagering.

Supporters of the proposition say a “yes” vote is a vote to support tribal self-sufficiency. They also believe it will stimulate jobs and economic growth in the state and will generate “tens of millions” of dollars to support state priorities.

Supporters also believe that the proposition would strengthen enforcement against illegal gambling and provide resources to treat problem gambling.

 

Proposition 27

Prop 27 aims to legalize online sports wagering for persons 21 years of age or older.

This proposition opens the legal avenues of sports wagering to businesses not associated with tribal casinos and requires any sports bets to be placed on non-tribal land.

Wagering may only be offered by federally recognized tribes and eligible businesses contracted by these tribes, and wagers must be placed in California.

The proposition implements a 10% tax on sports-wagers revenues and licensing fees, with tax revenues first paying regulatory costs.

Of the remaining funds, 85% will be dedicated to homelessness programs, and the remaining 15% distributed to non-participating tribes.

Supporters hope the increased state revenue will potentially reach up to hundreds of millions of dollars annually, offsetting the increase in regulatory costs, which may potentially reach the mid-tens of millions of dollars.

 

Proposition 26 Supporters Say:

Prop 26 is predominantly backed by Native American tribes who would benefit from the exclusive ability to provide customers with sports wagering options.

Supporters of Prop 26 believe that it will bolster tribal self-sufficiency, potentially providing tribal communities with health care, housing, infrastructure and education services, and will also assist non-gaming tribes by increasing the funding of the Revenue Sharing Trust Fund.

Supporters also state that Prop 26 will create jobs and further economic opportunities for the state, adding to the already booming $26.9 billion generated for the state economy annually. Supporters also believe that the increase in foot traffic would add to the over 150,000 jobs provided by tribal casinos in California.

The proposition would also generate increased state revenues that could be used in public schools, mental health programs, wildfire prevention, affordable housing and other state priorities, according to supporters.

Prop 26 is supported by 31 California Indian Tribes and Tribal Organizations, according to the Yes on 26 website.

 

Proposition 27 Supporters Say:

Prop 27 is largely backed by larger scaled gaming companies such as DraftKings and FanDuel. The proposition has also been officially backed by Major League Baseball, as well as some homeless advocacy groups.

“For the first time in state history, Prop 27 will create a permanent funding source for homelessness intervention efforts,” said Nathan Click, a Spokesperson for Prop 27.

Click said that funds raised under prop 27 will help build tiny homes, emergency shelters and provide other housing and treatment programs to assist people suffering from homelessness.

Three Native American tribes have also voiced their support for prop 27 — Middletown Rancheria of Pomo Indians, Big Valley Band of Pomo Indians and local Santa Rosa Rancheria Tachi Yokut Tribe, who operate Tachi Palace Resort and Casino in Lemoore.

Click said that smaller and rural tribes, who are only able to offer in-person gambling, don’t receive the foot traffic that many larger casinos receive.

“They’re supporting our measure because they want to be able to offer online sports betting,” he said. “They say it will help them finally realize the promise of tribal gaming in California.”

Prop 27 ensures that 15% of revenue is given back to small and disadvantaged tribal communities.

The proposition also creates a safe and responsible online sports betting marketplace, with built-in age restrictions, as well as assistance for problem gamblers.

“Prop 27 is the only one that strictly regulates the online sports betting marketplace,” Click said. “Prop 26 leaves it up to each casino how to regulate sports betting, whereas Prop 27 puts all of the authority at the DOJ and gives the DOJ full control of ensuring a safe and responsible sports betting marketplace.”

The tribes backing the proposition feel that despite not attracting foot traffic, they will still benefit from the potential influx of sports wagers placed at their respective casinos.