California may be the Golden State, but it is not golden for people who want to play poker online or bet on sports. Lawmakers have been fighting over said issues for many years.
Lawmakers themselves are divided on igaming and sports betting issues, not even typically along party lines. And ongoing battles between card room operators and Native American tribes run deep, and there doesn’t appear to be any room for compromise in the near future.
The latest news shows that two propositions on the November ballot pertaining to sports betting are widely opposed, with the Republican Party just noting their official objections this week.
Tale of Two Propositions
There will be two gambling-related measures on the ballot for the November 2022 election. On (or before, for early voters) November 8, residents of California will express their opinions on two propositions.
Proposition 26 will legalize sports betting only at Native American casinos and licensed racetracks in California. Further, though, it will allow tribal casinos to offer roulette and dice games like craps at their properties.
Of that tax, the California Department of Health will take 15% for problem gambling research and programs, as well as for grants to local governments for the same purpose. The Bureau of Gambling Control will take 15% to develop, implement, and enforce sports wagering laws. The remaining 70% will go to the General Fund.
The force behind the bill is the Coalition for Safe, Responsible Gambling, but its primary donors include tribal casino owners like Pechanga, Agua Caliente, and Barona.
https://twitter.com/playgraton/status/1559683973193891840?s=20&t=c_bNWjpBVEFMy8pQjFx7Og
The Taxpayers Against Special Interest Monopolies is the primary opposition group, and its top donors include card rooms like Commerce, Hawaiian Gardens, Bicycle, and Park West. The card clubs oppose the bill because more games at Native American casinos will give those properties even more of an advantage over card rooms, which cannot offer slot machines, traditional table games, or sports betting.
https://twitter.com/VoteNoonProp26/status/1555246185274695680?s=20&t=c_bNWjpBVEFMy8pQjFx7Og
Proposition 27 is officially called the Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative. The goal of supporters is to legalize online and mobile sports betting and implement a 10% tax on revenue. That tax, along with licensing fees, will go to a special fund for homelessness programs and to aid tribes that choose not to operate sports betting.
The homelessness program to benefit will be California’s Solutions to Homelessness and Mental Health Support for permanent and interim housing. The tribes to benefit will find their money in a Tribal Economic Development fund to be used to expand tribal governments, public health and education programs, infrastructure, and overall economic development.
Californians for Solutions to Homelessness and Mental Health Support is the group heading up the campaign to pass this proposition. Much of their funding comes from BetMGM, Betfair Interactive (owner of FanDuel), and Crown Gaming (owner of DraftKings).
https://twitter.com/CASolutions_Act/status/1562165030212145152?s=20&t=03OUZY8aVZJG1fyHthTQWg
On the other side of the issue, Californians for Tribal Sovereignty and Safe Gaming has been working with the Coalition for Safe, Responsible Gaming to oppose the measure. Top donors include the San Manuel and Pechanga tribes, both major casino operators in California. They believe that sports betting in the state will “undercut tribal sovereignty and self-sufficiency.”
https://twitter.com/NoOnProp27/status/1562510952578236416?s=20&t=c_bNWjpBVEFMy8pQjFx7Og
Bipartisan Opposition
The California Democratic Party was the first to oppose the most prominent of the two bills, Prop 27. The party’s Resolutions Committee voted unanimously in July to oppose Prop 27. One member said that supporters of the bill who made their case to the party did so in a disingenuous and clumsy way. They could not explain how the revenue from this new industry would truly make any progress toward solving homelessness.
As for Prop 26, the party chose to remain neutral on it. While they are not in staunch opposition to it, they will not com out in support of it, either. They are concerned that the card rooms of the state will be negatively impacted.
Just this week, in late August, the California Republican Party proclaimed its opposition to both bills.
https://twitter.com/RLinnehanXl/status/1561708525797130240?s=20&t=c_bNWjpBVEFMy8pQjFx7Og
Expensive Failures
For many years, online poker operators worked in the California landscape to try to legalize state-regulated online poker. There were serious bills put before the legislature starting in 2006 and every year for more than a decade after. The last year of a serious effort was 2016.
Lobbyists and online poker operators, along with card rooms and tribes, spent millions over the years to support or oppose the idea. There were numerous sticking points, but one major one was the tribes’ demand that PokerStars not be allowed in the California industry because it operated in the USA after Congress passed the UIGEA (Unlawful Internet Gambling Enforcement Act). After all those years, the various factions never found common ground to move forward.
Sports betting has been the newest hot-button issue for lawmakers across the United States.
In May 2018, the US Supreme Court ruled on a case pertaining to the constitutionality of the Professional and Amateur Sports Protection Act of 1992. New Jersey won the case, which nullified that law and allowed states around the country to legalize sports betting if they chose to do so.
From that moment forward, dozens of states began considering sports betting laws. As of August 2022, there are 29 states and Washington DC that have legalized some form of sports betting under state regulators.
The issue is now in the hands of the voters and will be decided in early November.
Both sides of both propositions have spent hundreds of millions of dollars to date and will only spend more in the months and then weeks leading up to the election.
If they win, they will recoup that money but may have to fight legal battles for years. If they lose, they will need to start the process over again.
https://twitter.com/SuziQSchneider/status/1562426220821630976?s=20&t=c_bNWjpBVEFMy8pQjFx7Og
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