Legalized Sports Betting Dead in California - For Now

On November 8, 2022, two sports gambling ballot initiatives were on the ballot for Californians to consider. They considered them, and both of them went down to defeat.

The two ballot initiatives were Prop 26 and Prop 27. Prop 26 was intended to give exclusive sports betting rights to the state of California's Indian Tribes. Sports betting operations would have been restricted to sportsbooks located in Indian retail casinos. The proposition was also designed to allow Indian Casinos a chance to add table games like craps and roulette.

Prop 27 was intended to authorize online/mobile sports betting, which would have been managed by some of the top mobile sports betting operators in the U.S. The problem with both of these initiatives is they were both somewhat non-inclusive, though Indian Tribes would have been permitted to partner with online/mobile sports betting operators.

When the tallying was complete, prop 26 was only able to garner a favorable vote of 29.9%. Prop 27 did far worse only being able to garner a favorable vote of 16.6%. While neither of the initiatives got anywhere near enough votes, Prop 27 was particularly disappointing.

The issues that plague Prop 27 might have been created by a very aggressive propaganda opposition campaign that was initiated by the Tribal community. With billions of dollars of potential sports betting revenue on the line, it's not surprising that California's Indian Tribes went on the attack.

The Prop 27 Misinformation Campaign

Much to the chagrin of Prop 27 supporters, California voters were seemingly vulnerable to the misinformation that was put out by proposition opponents. The attack ads took a two-prong approach.

First, there were ads claiming that a yes vote on Prop 27 would have resulted in 90% of sports betting revenue being sent out of California. That supposedly would have resulted in a spike in gambling addiction among California's teenage population. In fact, Prop 27 had a provision for the allocation of funds to help deal with California's growing homeless problem.

Second, Prop 27 was characterized as a direct attack on the sovereignty of California's Indian nation. It's noteworthy that Tribal concerns currently have exclusive rights to offer retail casino gambling to the state's residents and visitors.

At the end of the day, two warring measures simply had no chance of passing. It's likely that the presence of the two measures left Californians confused and divided on the issues of legalized sports betting.

Now What?

At this point, the only certainty related to sports betting in California is interested parties will now have to wait until the 2024 election cycle. With so much potential revenue on the line for both sports betting operators and the state in the form of taxes, there will be future attempts to bring legalized sports betting to the state.

It would seem that the best chance for any sports betting legislation to get approved in California is for Indian Tribes, poker room operators, race track owners, and online/mobile operators to figure out how to work together.