DraftKings “cautiously optimistic” over California as MLB throws weight behind online initiative
MLB has become the first US sports league to take a side in the California sports betting ballot battle between online gaming companies and tribal operators.
Two competing sports betting bills are on the November ballot in California. Proposition 26 would limit wagering to in-person bets at tribal casinos and race tracks, while proposition 27 would allow online sports betting and open up one of the most lucrative states in the US.
Leading US operators have backed proposition 27, also known as the California Legalize Sports Betting and Revenue for Homelessness, Housing and Education Initiative.
Firms including DraftKings and FanDuel have so far ploughed more than $350m combined into the campaign as the industry looks to educate Californians over the benefits of legal online sports betting.
Their lobbying efforts are being met by fierce resistance from local tribes, however, and the battle is expected to become increasingly bloody and expensive as November approaches.
Online operators received a boost on Friday (12 August) however, after the MLB told ESPN it would support proposition 27. FanDuel and DraftKings are among the league’s official betting partners.
“As legalised sports betting continues to expand across the country, MLB remains committed to protecting the integrity of its games and creating a safe experience for fans who wish to wager on those games,” said MLB in a statement.
DraftKings CFO Jason Park: “We feel good and polling looks solid, but you never know in these situations.”
“Proposition 27 — the only measure on California’s upcoming ballot that would authorise and regulate online sports betting — includes strong integrity provisions designed to help MLB carry out those commitments.”
MLB said the measure would require sportsbook operators to notify the league over suspicious wagering activity and would also allow the league to propose potential restrictions on betting markets that are susceptible to manipulation.
“MLB believes that Prop 27 has the safeguards to create a safe and responsible online sports betting market in California — a state with millions of MLB fans looking for alternatives to illegal offshore betting sites,” it added.
Other prominent US operators such as Caesars Entertainment have declined to take sides.
Experts have so far suggested California – which is the largest US state by both population and economy – could generate up to $3bn in annual revenue should the state legalise online sports betting.
Discussing the ballot battle at an Annual Growth Conference hosted by Canaccord Genuity on 10 August, DraftKings CFO Jason Park said: “I think cautiously optimistic is the right phrase to describe how we’re feeling about the potential in November.
“We passed that first step, which was to get the required signatures to get on the ballot. We feel good and polling looks solid, but you never know in these situations.
“We’ll be investing in good ROI to educate the citizens of California on the topic and make sure they understand what’s really in there and then we’ll leave it up to them,” he added.
DraftKings stock has risen more than 60% in the last month, with the prospect of legalised sports wagering in California counted as one potential driving force behind the surge.