“I’m very cautiously optimistic that this referendum is going to pass,” FanDuel CEO Amy Howe said about an online sports betting authorization question during this month’s SBC America conference. “The way this has been set up and architected there’s a win-win on many levels.”
FanDuel, DraftKings and BetMGM, the nation’s leading online gaming operators by market share, have contributed more than $16m apiece to the statewide mobile wagering referendum. If approved by voters this fall, 85% of tax revenues would go to support homelessness prevention and mental health support programs.
“We are incredibly excited in the prospect of responsibly bringing online sports betting while protecting minors and other vulnerable populations and providing much-needed funding for critical issues like homelessness and mental health,” DraftKings CEO Jason Robins said during a recent meeting of the National Council of Legislators from Gaming States.
WynnBet, Barstool Sportsbook, Bally Bet and Fanatics have also contributed more than $10m apiece, and would presumably seek licensure. Caesars, which hasn’t contributed directly to the campaign nor taken a public stance on either proposal, will also seem likely to enter the state if either measure passes. Rush Street Interactive officials reaffirmed at recent industry events the company was also monitoring the state closely.
FanDuel CEO Amy Howe: “I’m very cautiously optimistic that this referendum is going to pass. The way this has been set up and architected there’s a win-win on many levels.”
The remaining 15% of tax proceeds on gross gaming revenue would go to support California Native American tribes without casino gaming offerings. A handful of smaller tribes have endorsed the online measure.
The sportsbook-backed statewide mobile measure will be on the same ballot as a competing retail-only initiative backed by many of the state’s larger gaming tribes. The tribes’ measure would only permit in-person betting at certain tribal gaming facilities as well as a handful of horse tracks.The tribes have framed the retail-only measure as a way to preserve jobs at tribal casinos and keep wagering dollars in-state. Industry officials believe that, if approved, the state’s larger gaming tribes will create self-branded, in-house sportsbooks, though smaller tribes may partner with the national brands.
Though the major sportsbook operators portray their initiative as a complement to the retail-only proposal, there is a clear conflict between the two measures. Tribal interests are prepared to spend tens of millions of dollars opposing the statewide mobile proposal, arguing that not only would it hurt existing Californian workers, but also fuel gambling addiction.
Both measures could pass, creating a tricky scenario that would potentially have to be decided by elected officials, regulators and the courts. Even if voters approve both, it’s possible that only the measure with a higher vote total is enacted, depending on how the courts interpret the relationship between the two initiatives.
Polling from both sides has, not surprisingly, shown advantages for their respective measures. With more than three months before Election Day it’s still far too early to determine definitively where California voters stand on the issue – or how they’ll vote this fall.
Major sportsbook officials continue to tout their initiative, which in addition to taxing winnings would require sportsbooks to pay a $100m licensing fee, as a way to combat homelessness and assist mental health; the fact it comes from sports betting is a little-discussed point in campaign advertising.
Meanwhile, the tribes and their supporters present their sports betting proposal as a way to fuel in-state jobs and economic opportunities. Conversely the online measure, as argued by the tribes, would take money out of Californians’ pockets and divert it to massive out-of-state corporations.
“Trying to predict California is really tough,” said BetMGM chief revenue officer Matt Prevost during the SBC conference about the votes on the state’s two sports betting ballot measures this fall. “I’m not going to try to handicap it.”