This election cycle, Props. 26 and 27, which focus on the legalization of sports gambling, are being backed by record-breaking funding. Despite this, polling shows that neither measure looks likely to pass. The campaigns for these propositions both promised that their tax revenue will be spent on services benefiting the community; however, Prop. 27 will adversely affect younger Californians while also hurting the Native communities reliant on gambling as a means of income.
While they seem to target similar matters, the propositions have each been backed by completely different groups of lobbyists. The key difference between the measures is that Prop. 26 would only legalize sports gambling in-state while Prop. 27 would legalize sports gambling online. This immediately put the propositions at odds with one another because the businesses benefitting from either proposition would be in direct competition with those in the other. The key backers for Prop. 26 are Native communities that own and operate casinos on their lands. There are over 75 tribal casinos throughout California which account for nine billion dollars in revenue for the tribes that operate them. That’s an incredible amount of income for tribes that rely on in-person traffic at their casinos to make money. California is a huge market for sports gambling and that revenue could have great impacts on Native Tribes who could use the money to improve social services within their communities.
Prop. 27, on the other hand, is backed by large gambling corporations such as DraftKings, FanDuel and BetMGM. These corporations would stand to gain billions from sports betting in the most populous state in the nation and have spent millions trying to get this measure passed. Their advertisements often focus on the portion of tax revenue that would go to homeless and mental health services as a way to win support. The problem is that 90% of revenue from online sports betting would go out of state as opposed to staying in California like it would with Prop. 26. The majority of Native Tribes oppose Prop. 27 for this very reason, stating it would create competition for their casinos and hurt revenue which is detrimental to their respective tribes.
Another possible side effect to the passing of Prop. 27 would be the negative impact on underage gambling rates in the state. In states that have legalized online sports betting, the rates of high schoolers with gambling addictions has increased. Around 5% of young people nationwide aged 11 to 17 meet criteria for a gambling problem. While that rate is slightly low, it is bound to increase with easier access to online gambling should Prop. 27 pass. Policing who has access to gambling sites can be incredibly difficult and not a good enough deterrent to dissuade those underage to gamble. Regulating underage betting is much more feasible through Prop. 26 as casinos can actively check government IDs to allow entry on their premises.
Presently, U.S. based companies are not able to operate online sports betting within California which has pushed overseas corporations, such as Bovada which is based in Costa Rica, to fill that void as regulating their business within California is near impossible. Their popularity is nowhere near that of FanDuel and as such, they have not been able to gain a big foothold within younger communities.
With both measures on the ballot this November, Californians should focus on Prop. 26 as it will help both the state, Native communities and allow the state to better regulate an activity which would negatively affect younger people.
