California voters appeared to soundly reject two measures in Tuesday’s general election that would have legalized sports betting in the nation’s largest state.
With about a third of the vote counted according to the Associated Press, only 29.6% of voters supported Proposition 26, which would have legalized retail sportsbooks at tribal casinos and state-licensed racetracks and allowed tribal casinos to offer roulette and craps. Votes against the constitutional amendment were ahead by roughly 1.8 million out of the 4.4 million that had been counted.
Meanwhile, Proposition 27 was down by an even wider margin. Out of the more than 4.4 million votes counted as of 10:30 pm PT, more than 84%, or 3.7 million, were against the measure that sought to legalize online sports betting across the state.
The AP had not yet called either race as of 10:30, but NBC News projected both to fail less than two hours after the polls closed at 8 pm PT.
With the defeats likely, it would mark the first time voters in any US state rejected a measure to legalize sports betting since the US Supreme Court overturned PASPA in May 2018.
Tribes Focused on Defeating Prop 27
More than $450 million was spent by committees to either support or oppose one of the measures. That made it the most expensive ballot measure fight in California history.
Seven national sportsbook operators – Bally Bet, Barstool Sportsbook, BetMGM, DraftKings, Fanatics, FanDuel, and Wynnbet – spent more than $169 million to support “Californians for Solutions to Homelessness and Mental Health Support.”
They crafted their measure to include a 10% tax on online sports betting revenue, with 85% of that funding going to mental health and housing programs. The remainder would go toward economic development for tribal nations not involved in sports betting.
However, California’s tribal nations established a nearly unified front, with two groups – the “Coalition for Safe, Responsible Gaming” and “Californians for Tribal Sovereignty and Safe Gaming” – raising more than $237 million. Nearly all of that was spent in opposition to Prop 27.
Even as their measure was going down, tribal leaders celebrated Tuesday’s election results as a victory. They had made it clear in the prior weeks that the top priority was to defeat Prop 27.
We are grateful to California voters who rejected out-of-state gambling corporations’ deceptive measure and once again stood with California Indian tribes,” Greg Sarris, tribal chairman of the Federated Indians of Graton Rancheria, said Tuesday night. “Today’s vote is a show of support for tribal self-reliance and a total rejection of corporate greed.”
Prop 27 also faced stiff opposition from a number of political and civic leaders, including both political parties and the Republican and Democratic leaders in the state legislature. Gov. Gavin Newsom, who was re-elected Tuesday on the same ballot, came out against it late last month.
At the Global Gaming Expo last month, FanDuel CEO Amy Howe and DraftKings co-founder and CEO Jason Robins essentially admitted their measure was doomed. Polling had indicated support was well under water and the group also pulled back on advertising in the weeks before the election.
Cardrooms Opposed Prop 26 ‘Poison Pill’
Prop 26 also faced opposition, but that came mainly from cardroom casino operators and their supporters.
California’s cardrooms have long been at odds with the tribal casinos, and the cardrooms were fearful of a provision in Prop 26 that would have allowed tribes and others to take cardrooms to court regarding illegal gambling accusations. The cardrooms feared it would lead to some closing as a result.
Taxpayers Against Special Interest Monopolies, the anti-Prop 26 group, had nearly $44 million in backing from the cardrooms. It also had support from leaders of cities with cardrooms as well as some business and labor groups.
“Prop 26 was not just a sports betting measure but a massive expansion of gambling by five wealthy tribes that included a poison pill aimed at taking market share away from highly regulated cardrooms that provide millions of dollars in tax revenue to communities and tens of thousands of jobs,” the anti-Prop 26 group said in a statement Tuesday night. “Voters made it clear; Prop 26 is bad for communities, jobs, and California.”
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