Prop 26: CA’s Tribal Legalized Sports Betting Measure Explained

CALIFORNIA — Proposition 26 is one of two rival gambling measures on the Nov. 8 ballot, and proponents of both are spending big money to see them passed. However, neither has been polling well with voters heading down to the final stretch of the election.

California does not currently allow sports betting, but since the U.S. Supreme Court opened the door to legalized sports wagering three years ago, California has become the jackpot for the gambling industry since it has the most professional and college teams in the nation in addition to the largest population and concentration of wealth.

Proposition 26 is a constitutional amendment that would allow it in tribal casinos and racetracks.
Proposition 27 is a constitutional amendment that would allow some tribes and gambling companies such as FanDuel and DraftKings to operate online or mobile sports betting outside of tribal lands. The dueling propositions present a political cage match between gambling entities battling for control over the future of the billion-dollar sports betting industry in California. Because both propositions are diametrically opposed, the passage of both would likely trigger legal battles.

If Proposition 26 passes, roulette, dice games and wagering on professional, college, or amateur sporting events would be allowed at tribal casinos and racetracks. High school sports would be excluded from legalized gambling under both dueling propositions.

The tribes and racetracks would pay 10 percent of profits to the state. Thirty percent would go to prevent and treat gambling addiction and enforce gambling regulations. The remaining 70 percent would go to the state’s general fund.

According to the state’s Legislative Analyst’s Office, revenue from Proposition 26 could reach tens of millions of dollars annually.

“Some of this revenue would be new. For example, the state currently does not receive any share of illegal sports bets. This means the state would receive new revenue when people make sports bets legally rather than illegally,” according to the Legislative Analyst’s Office. “However, some of this revenue would not be new. For example, the state currently receives revenue when people spend money on certain things, such as lottery games or shopping. This means the state might not receive new revenue when people spend less on those things so they could make sports bets.”

If it passes, Proposition 26 would also establish a novel new approach for enforcing gambling laws.

It would allow people to file a civil lawsuit against entities breaking state gambling laws if the Department of Justice won’t file a criminal case within 90 days or the court rejects the justice department’s case.

“This lawsuit can ask for penalties of up to $10,000 per violation. It can also ask for the court to stop the behavior,” according to the legislative analyst’s office.

Penalties collected would go back to the state.

Not surprisingly, that aspect of the measure has drawn fierce opposition from the casinos that compete with the tribal casinos. Among its opponents are Hawaiian Gardens Casino, Bicycle Casino, Parkwest Casinos, and groups such as the California Animal Welfare Association and the California Republican Party.

Opponents of the measure argue that it gives tribal casinos a monopoly on sports wagering without giving much back to the communities impacted by gambling.

"This initiative does nothing to advance sports wagering, and instead expands the tribal casinos’ tax-free monopoly on gaming and rewards those operators for prioritizing their own wealth over public health and safety,” Kyle Kirkland, president of the California Gaming Association told the Los Angeles Times.

Its supporters contend it would usher in California’s era of sports wagering in a highly regulated and responsible manner.

Supporters include about two dozen tribes including those that operate major casinos such as the Morongo Band of Mission Indians, the Agua Caliente Band of Cahuilla Indians and the Pechanga Band of Luiseño Indians. Other supporters include San Diego police and sheriff’s unions, the Los Angeles Urban League.

"A strong, well-regulated gaming industry is of utmost importance to California’s tribal governments and the public,” said Steve Stallings, chairman of the California Nations Indian Gaming Association. “This initiative allows sports wagering in a responsible manner and provides for transparency and strict regulation."

Both sides have been pouring money into the election.

Supporters have given more than $122.8 million to the campaign. By the end of September, $117 million had been spent to persuade voters to allow sports betting in tribal casinos.

Opponents have raised $43 million and spent more than $39.6 million by the end of September.
The massive amount of money spent on the Proposition 26 and 27 campaigns seems to be having a limited effect on skeptical California voters. According to a poll by the UC Berkeley Institute of Governmental Studies, voters who had seen the ads for or against the measures were more likely to oppose them than those who hadn’t.

The poll found Proposition 27 garnering support from only 27 percent of likely voters compared to 31 percent support for Proposition 26.