LOS ANGELES — The costliest nomination game in US history went bust on Tuesday as California voters overwhelmingly rejected sports betting and repelled initiatives by Native American tribes and the gambling industry.
The two groups raised nearly $600 million in competing efforts to expand gaming and try to capture a slice of a potential billion-dollar market in the nation’s most populous state. But voters didn’t want a piece of the action.
Supporters and opponents of the dueling measures inundated voters with a barrage of ads supporting proposals that would have legalized sports gambling by allowing it in tribal casinos and horse racing tracks, or through mobile and online betting.
The money raised and spent more than doubled the record amount spent in 2020 by Uber, Lyft and other app-based ride-hailing and delivery services to prevent drivers from becoming employees who are entitled to benefits and job protections.
Still, pre-election polls showed that both voting measures faced an uphill battle to win a majority. More than 30 other states allow sports betting, but gambling in California is currently limited to Native American casinos, racetracks, card rooms and the state lottery.
Proponents of the two initiatives proposed different ways to offer sports betting, and each touted different benefits that they said would accrue to the state if their measure were approved.
Proposition 26 would allow casinos and the state’s four racetracks to offer in-person sports betting. Funded by a coalition of tribes, the initiative would also allow roulette and dice games in casinos. A 10% tax would help fund enforcement of gambling laws and programs to help addicts.
Proposal 27 would allow online and mobile sports betting for adults. Large gambling companies would have to partner with a tribe involved in gambling, or tribes could enter the market themselves. This action was supported by DraftKings, BetMGM, FanDuel – the latter is the official odds provider for The Associated Press – as well as other national sportsbooks and some Tribes.
The initiative was promoted for funding, which it pledged to channel through tax revenues to help the homeless, the mentally ill and poorer tribes not enriched by casinos.
The bipartisan Legislative Analyst’s Office noted that both initiatives would increase government revenue, but it was unclear by how much. Proposition 26 could bring in tens of millions of dollars, while Proposition 27 could bring in hundreds of millions, the bureau said.
However, that revenue could be offset if people spend money on sports betting instead of shopping or buying lottery tickets. Democratic Gov. Gavin Newsom did not comment on either proposal, but said Proposition 27 was “not a homeless initiative.”
The California Republican Party rejected both proposals. State Democrats opposed Proposition 27 but were neutral on Proposition 26. Major League Baseball endorsed Proposition 27.
The No on Prop 26 campaign, largely funded by loser-sight card games, said the measure would give a handful of wealthy and powerful tribes “a virtual monopoly over all gambling in California.”
The No on 27 committee said the proposal was based on misleading promises, saying the gambling companies behind it “didn’t write it for the homeless, they wrote it for themselves”.