2022 CA Propositions 26 & 27: Betcha Can’t Pick Just One

Prop 27’s homelessness promises amount to bailing a leaking boat with a coffee cup. Perhaps advocates will get a fancier cup, maybe with an NFL logo.

In 2022 we’ve got two opportunities on the ballot to make it legal to bet on (for example) whether or not the Los Angeles Chargers will fold in the fourth quarter of any important game. 

To be clear, this doesn’t have to be an either or vote. You can vote yes on both (chances are the courts will get involved) or you can vote no on both (nothing will happen).

However, both Propositions 26 and 27 are problematic, starting with the amounts of money being spent to support/oppose each. As of Sept 17, we're talking about hundreds of millions of dollars. Interest groups don’t shuffle that kind of money around unless the stakes make it a worthwhile investment. 

So what are we missing here? 

Twenty-six is backed by tribal interests, which dominate the gambling industry in California. 

Twenty-seven is backed mostly by the online betting companies who have arisen in states legalizing sports gambling in the wake of a 2018 Supreme Court ruling.

Background: Gambling in California is already complicated. You can bet on a horse race, buy a lottery ticket, put money on poker in a card room and play slots at a tribal casino.

The market for horse racing as a sport is dying along with its aging audience. Revenues from betting at race tracks have declined by 50% since the turn of the century. Younger people, in particular, view the sport negatively and associate it with animal cruelty. 

Roughly 23,000 retailers across the state, including many convenience stores and gas stations, sell scratchers and fill out tickets for drawings, such as MegaMillions and PowerBall. The reality of the much ballyhooed contribution lottery sales contribute to schools is that bettors in poorer communities (which ‘lose’ money from distributed proceeds) are actually funding wealthy school districts.  

At 84 licensed card rooms, you can play games like poker and pai-gow, where players bet against each other. What was once a mom and pop industry has been hurt by the opening of tribal casinos and a negative image stemming from repeated federal prosecutions for money laundering. There are no card rooms left in San Diego. It’s mostly a Los Angeles thing now.

At licensed tribal casinos you can play slots, lottery games and card games, like baccarat and blackjack, where players bet against the house, as well as games like poker, where players bet against each other. In 2021, tribal casinos gross gaming revenue (all wagers, minus winnings) rose to nearly $12 billion.

Californians are missing out on the biggest gambling market of all, namely sports gambling. Various interests have been squabbling over this for years. 

As has been true with the cannabis industry, the illegal side of sports betting still commands a significant market share. Even within states that allow online sports betting, 55% of online sports bettors use an unregulated platform at least some of the time, according to a May 2022 survey commissioned by the Fantasy Sports & Gaming Association.

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Proposition 26 puts control of sports wagering in the hands of California’s Tribal Casinos. 

Language of Prop 26: "California Sports Wagering Regulation and Unlawful Gambling Enforcement Act" 

Yes on 26
Website
Media: Yes on California Proposition 26: Casino gaming measure is a responsible approach

If you think giving First Nations control of most gambling has thus far been a good thing (It’s certainly lifted a lot of people out of poverty) then voting yes mostly amounts to simply adding another feature to the activities available at casinos.

Prop 26 Promises (Via Yes on 26)

• Allows betting on professional, college*, or amateur* sports and athletic events

• Betting on in-state or out-of-state games played by California college teams would remain illegal, except during tournament play. Betting on high school sports and events would remain illegal*

• Imposes a 10% tax on sports betting profits at horse racing tracks only

• No sports betting by persons under the age of 21

• Require 15% of state revenues to be earmarked for problem gambling prevention and mental health at the state and local level; 15% to be earmarked for gambling enforcement and control, and; 70 percent earmarked for the state General Fund

Tax revenues generated by such wagering will be part of the state’s overall budgeting process. By limiting sports betting to actual locations, supporters claim minors will be excluded from participating. 

It should be noted that the only stipulated taxation on Sports Betting via Prop 26 would be 10% on profits at the privately-owned race tracks included in the deal. Other revenues would be determined by compacts between tribal and various government entities. 

The coalition supporting Prop 26 besides 80+ tribes includes many of California’s Democratic clubs, Chambers of Commerce, social justice organizations, along with public safety/law enforcement organizations and individuals. The state’s Democratic Party has adopted a “neutral” stance on this measure. (They are opposed to Prop 27)

The State GOP is officially opposed to both Props 26 & 27.

No On 26
Website / Facebook / Twitter 
Media: No on California Proposition 26: Casino gaming measure will harm communities and workers

The people against Prop 26 are selling the “special interests/monopolies” angle, namely that some “others” who aren’t regular folks like “us” are going to get richer. Those “others” are tribes who have been dealt a piece of the pie (partly) in recognition of past injustices. Given that monopolies are all-but-sacred these days, I’m not sure who will be moved by that argument.

Much (but not all) of organized labor is against Proposition 26 in large part because many of California’s tribes have used their special status to thumb their noses at worker protection regulations. It’s a valid point until you look at the labor record of the other guys, which is that they don’t like unionized workforces, overlap with black market operations internationally, and exist within the culture of internet companies most likely to actively oppose union activity.  

There are technical details about Prop 26 that opponents want to make a big deal out of, namely that the fine print on this deal gives the tribes a legal recourse with teeth against competitors (mostly card rooms). This isn’t the big deal they’d like you to think it is if only because so much cash is allegedly laundered through non-tribal players.

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Proposition 27 gives big name sports operators access to the California market, provided they can partner up with a tribe.

Sports bettors would then have access through on-line portals to gamble. 

Language of Prop 27: The California Solutions to Homelessness and Mental Health Support Act

Yes to Prop 27
Website / Facebook / Twitter 
Media: Online sports betting measure boosts homelessness funding

Prop 27 Promises (Via YestoProp27)":

• The California Solutions to Homelessness and Mental Health Support Act is the only measure on the 2022 ballot that will guarantee hundreds of millions of dollars each year to fight homelessness and fund mental health treatment in California. 

• Achieves this by licensing, tightly regulating, and taxing online sports betting. In 2018, the Supreme Court ruled states could legalize betting on sports, and nearly half of the country has safely authorized online sports betting, generating revenue windfalls to fund state priorities. 

• State revenue generated by the initiative can only be used to fund homelessness and mental health solutions like permanent shelter and addiction treatment services. 

• Will also generate millions annually to uplift California Tribal nations and their communities via a new, permanent tribal revenue stream.

Anybody with a cellphone could in theory be plugged in to gamble, provided they go through the process of setting up an account, which would involve verifying identity and connecting with a funding source. 

The claim suggesting that Prop 27 supports non-gaming tribes, while 26 doesn’t is malarkey. Non-gaming tribes already draw from revenues at tribal casinos.

The measure creates extremely high thresholds for gaming companies to do business in California, making it all but impossible for smaller gaming companies to compete. So much for the “we’re fighting a monopoly” riff being played by Prop 27 advocates.

Prop 27 expands the size of the potential market for sports betting, since people won’t have to get off their La-Zy-Boys to participate. Estimated revenues/taxation could be three times as large as with tribal casino only sportsbooks.

No on 27
Website / Facebook / Twitter
Media: Legislative leaders unite against sports betting ballot measure backed by gambling platforms

The anti-27 groups flip the monopoly arguments to say “out-of-state” gambling corporations are involved in promoting broader access to betting on sports.

They make a big deal over the potential for underage people being able to place bets. Trust me, they will, regardless of the “safeguards.” (See: Porn, Internet) 

And who’s to say they’re not already betting on California’s huge underground gambling market. Does your bookie ask for ID? I didn’t think so.

The claim that 90% of profits will flow out of state to the “evil” corporations is just plain hyperbole. 100% of the profits remaining “in state” under Prop 26 will go to tribes, which may or may not pay any taxes on them or spend the money in-state.  

Prop 27’s advertising portraying gambling revenues as a solution to homelessness is a cruel hoax. Yes, some organizations engaged in providing services to homeless humans will get funding. (Yay!) 

But the number of homeless will continue to grow. Prop 27’s homelessness promises amount to bailing a leaking boat with a coffee cup. Perhaps advocates will get a fancier cup, maybe with an NFL logo.

There is no taxation-based “solution” to homelessness, short of enacting economic policies that reverse the perverse effects of trickle down economics while financing construction of affordable housing.. 

The State GOP is officially opposed to both Props 26 & 27.

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The questions and challenges posed by Props 26 and 27 may turn out to be irrelevant. My read on the campaigns thus far is that all the claims and counterclaims are having the effect of encouraging people to say they don’t want either side to win.

Very early (February, UC Berkeley) polling data on Prop 26 shows a plurality (45%) favoring passage, but 22% of registered voters undecided. 

Polling data (Sept 2-11,PPIC) on Prop 27 shows only 34% of likely voters supporting the measure.

My bottom line: The Yes on 27 people are telling more lies, in my opinion. I will vote Yes on 26, if for no other reason than this argument will be repeated every two years until somebody wins. Having said that, the chances of me wagering on a sporting event are slim to none.   

UPDATE (9/21), Via Politico

— “Prop. 27 — which would legalize online sports betting — is scaling back TV ads ,” by the San Francisco Chronicle’s Joe Garofoli: “The Prop. 27 campaign pulled all of its TV advertising from California’s major markets this week and only has broadcast spots scheduled to run in October in Los Angeles with smaller cable buys in the Bay Area, Sacramento, San Diego and Fresno through October, according to campaign ad trackers.” 

Next up: Proposition 28: A Dedicated Stream of Funding for Arts & Music

Previous voter guides:
(More coming soon)

California State Officials
California’s DC Delegation
State Senate Races
State Assembly Races
SD County Supervisors
County Sheriff, Assessor, and Treasurer Races
SD Measure B: Cash Meets Trash 
SD Measure C: Reach for the Sky! Or Else?
SD Measure D: Righting a Wrong to Build a Future
SD Measure H: It’s for the Children (And Their Parents)
CA Proposition One: It’s About More Than Abortion

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Boards of Education Contests:
Analysis by Thomas Ultican

2022 School Board Contests, Part 1
The County Board, San Diego Unified, Sweetwater Union, Poway Unified

2022 School Board Contests, Part 2
Chula Vista, San Marcos, Vista, Grossmont

2022 School Board Contests, Part 3
Oceanside, Escondido, San Dieguito

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Email me at WritetoDougPorter@Gmail.com