Odds are, one of the many ads for legalizing sports betting has snagged your attention, given their ubiquity on TV, websites and billboards across California.
You鈥檇 be forgiven, though, for still not having a clear sense of what either of the initiatives do. Some of the , potentially leaving Californians foggy on what exactly it is they鈥檙e being asked to decide.
The ads are 鈥渙versimplified to a point of not being fully accurate,鈥� said Mary Beth Moylan, an associate dean and professor at the McGeorge School of Law at University of the Pacific who oversees a journal dedicated to California鈥檚 initiatives.
would legalize sports betting at tribal casinos and at California鈥檚 four private horse race tracks. It is being paid for by about a dozen Native American tribes. It would also allow tribes to begin offering roulette and dice games.
would legalize online sports betting across the state and is being paid for by a handful of large gaming companies. Under Proposition 27, both gaming companies and tribes could offer online and mobile sports betting.
But how truthful are the ads? Here鈥檚 what you need to know about some of the often-repeated claims.
Claim:
Leaders from three of 鈥� Santa Rosa Rancheria Tachi Yokut Tribe, Middletown Rancheria of Pomo Indians and Big Valley Band of Pomo Indians 鈥� support the online sports betting proposition.
Chairman Jose 鈥淢oke鈥� Simon III of the Middletown Racheria of Pomo Indians said in an interview with CalMatters that he supports Proposition 27 because it gives the tribe an opportunity to bring in more funds. The tribe is rural and has a casino about an hour鈥檚 drive north of Napa.
鈥淥ur brick and mortar (casino) is limited by just our area where we鈥檙e located and the mobile sports betting would allow us to reach a much broader audience,鈥� said Simon III.
But, . They say it would disrupt the gaming that has been operating on tribal lands for decades and would drive business away from Indian casinos.
True?
It is true that a few tribal leaders support Proposition 27, but far more tribal leaders oppose the measure.
Claim: Proposition 27 鈥溾��
It鈥檚 true that every tribe would see some kind of benefit from Proposition 27. Tribes that have compacts with the state of California that allow them to offer gambling could create their own mobile sports betting app or website. Or, they could partner with a gaming company that wants to offer online sports betting in California.
The initiative also taxes online sports betting and sets aside 15% of the money for tribes that 补谤别苍鈥檛 involved in sports betting. But, because it鈥檚 hard to know exactly how many people will place bets, how many companies and tribes will want to offer sports betting, or how many tax deductions companies will take, it鈥檚 impossible to know exactly how much money that will be.
True?
Every tribe has the potential to benefit from Proposition 27, yes. It鈥檚 unclear to what degree each tribe would benefit.
Claim: Proposition 27 provides 鈥溾��&苍产蝉辫;&苍产蝉辫;
This one is a bit complicated. It鈥檚 possible the proposition will generate hundreds of millions of dollars annually to address homelessness, but it鈥檚 not guaranteed.
Each election cycle, the non-partisan Legislative Analyst鈥檚 Office and estimates the new costs and revenue each could create for the state. that Proposition 27, via taxes and fees, would increase money flowing to the state by 鈥減ossibly in the hundreds of millions of dollars but likely not more than $500 million annually.鈥� The office didn鈥檛 include a lower-end estimate.
First, that money would be used to cover new costs related to regulating sports betting, which the analysts estimate could reach tens of millions of dollars annually.
Out of the money that remains, 15% would go to tribes that don鈥檛 participate in sports betting and 85% would go to homelessness solutions. The Legislature could also choose to direct some of it to gambling addiction treatments.
True?
It is possible that Proposition 27 would wind up generating hundreds of millions of dollars per year for the state to address homlessness. But if taxes and fees end up bringing in $100 or $200 million a year 鈥� as opposed to $500 million 鈥� then it would not. Also, if the Legislature decides to direct a large portion to gambling addiction treatments, that would reduce the amount that goes to homelessness solutions.
How does this money fit into what California is already spending to address homelessness? California spent $7.2 billion on homelessness-related programs in the 2021-22 budget year, according to . If Proposition 27 added, say, $300 million, that would translate to a 4% boost.
Claim:
This claim is based on the fact that Proposition 27 taxes online sports betting at a rate of 10%. So the question is: Where exactly will the other 90% go? The truth is that it鈥檚 impossible to know precisely.
If Proposition 27 passes, gaming companies headquartered in other states will want to get in on the action, since they are the ones funding the measure. The companies bankrolling the initiative have some of the most popular online sports betting platforms: FanDuel commands 31% of the U.S. market, followed by DraftKings with 26% and BetMGM with 16%, according to Eilers & Krejcik, a research firm focused on gaming. So, it鈥檚 reasonable to expect their platforms would be popular in California, too.
Does that mean those companies would reap all of the profit? The initiative also allows California tribes to offer mobile and online sports betting on their own. If tribes choose to do that, they鈥檇 be earning some of the profits.
Gaming companies headquartered in other states might also wind up needing to spend money in California to do business here. For example, companies will need to make a deal with a tribe in order to legally operate, and that deal could include some kind of payment or revenue sharing. Gaming companies may also need to pay employees or contractors in California to get their business going here.
True?
The companies funding the campaign are headquartered outside California. What percentage of profits would actually go to them is impossible to know right now.
Claim: Tribes are 鈥�.鈥�
This argument contains several claims. It鈥檚 based on a part of Proposition 26 that allows any person (or organization) that believes someone else is breaking California gambling laws 鈥� by offering an illegal game, for example 鈥� to sue. Before they could sue, though, they鈥檇 need to first ask the state Department of Justice to act, and could only move ahead if the department doesn鈥檛 take action, or the department does file a case and the court rejects the case but allows it to be re-filed. It鈥檚 complicated legal stuff. But it鈥檚 not a totally novel idea; California has used a .
True?
Buckle up.
Are tribes trying to 鈥済uarantee themselves a virtual monopoly?鈥� In 2000, Californians voted to 鈥� including slot machines and card games backed by the casino 鈥� that no other entity in California is allowed to offer. Proposition 26 would allow tribes to begin offering roulette and dice games, which no other entity can offer, so long as they renegotiate their agreement with the state. So, the initiative would expand tribes鈥� exclusive rights to offer certain forms of gambling.
Would the new lawsuit process give 鈥減rivate trial lawyers the powers of the Attorney General to bury their licensed cardroom competitors with frivolous lawsuits?鈥� It would allow private attorneys to bring cases that are currently under the purview of government lawyers. The Proposition 26 campaign hasn鈥檛 hidden the fact that tribes intend to sue , which compete with tribal casinos.
The lawsuit process was 鈥渃rafted to settle the house bank games law that governs cardrooms,鈥� said Kathy Fairbanks, a spokesperson for Yes on 26 campaign, at a recent debate. The rules over exactly how cardrooms are allowed to offer certain games has long been a source of disagreement between cardrooms and tribes. The tribes don鈥檛 have standing to challenge them in court, Fairbanks said, so they want a way to do that.
The notion that this would unlock a slew of meritless lawsuits, though, assumes that courts don鈥檛 already have a process in place to handle frivolous lawsuits, said Moylan, the law professor. Courts can sanction lawyers who bring frivolous lawsuits, for example, Moylan said.
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