Props 26 and 27:  Dueling Ballot Initiatives. Will we be Delivered?

Props 26 and 27:  Dueling Ballot Initiatives. Will we be Delivered?

Remember the classic scene from Deliverance?  Drew invites the backwoods kid with the banjo to play together, but despite their mutual talent for music in the end the kid eerily looks away and refuses to shake his hand? 

Well get ready for the California sports betting initiatives Propositions 26 and 27, already the most expensive dueling ballot measures in state history.  

Prop 26 is sponsored by a few Indian tribes.  It authorizes on-site sports wagering at tribal casinos and four racetracks, as well as craps and roulette at tribal casinos.  Only the racetracks will pay tax.  Because of that and because the initiative does not allow mobile betting – which constitutes 85% of the revenues in other states – the expected tax revenue to California will be minimal. Worse yet, the initiative contains a poison pill designed to harm non-tribal cardrooms which operate only card games. The cardrooms actually do pay hundreds of millions of dollars in state and local taxes, and provide living wage jobs for 30,000 people.  This initiative does a lot for the tribes and absolutely nothing for the State as a whole.  It is opposed by a coalition of cardrooms and cities. 

Prop 27 legalizes online and mobile sports wagering operated by private companies in partnership with tribes. It is sponsored by the private sports betting companies, like BetMGM, DraftKings and FanDuel.  This initiative imposes a 10% tax with hundreds of millions in tax dollars going to homelessness programs. It is opposed by the Prop 26 tribes and a coalition of other tribes who are not backing Prop 26.

The $500 million duel between the two initiatives will come to a head on Election Day, November 8.  But there are already several other duels underway.  Tribal leadership is split.  The Prop 26 tribes are trying to run Yes and No campaigns at the same time, which may only confuse voters and engender defeat.  Other tribes just want to defeat Prop 27.  Even after the election, there will be on-going duels between the tribal chairs over the leadership and direction of the greater part of the tribal community in the years ahead.

If both propositions lose, get ready for the dueling narratives regarding why both failed. Was it because the voters were confused, distrustful, or just opposed to sports betting in one form or another?  How much did on-line gaming or the inclusion of horse racing matter to voters?  Would trying again in 2024, as some tribes are inclined to do, be too soon?  Will lawmakers ever pass their own proposed constitutional amendment to allow sports betting that makes sense from the state’s perspective?

If only one initiative passes, does this mean the issue is locked down for the foreseeable future, or will the Legislature or one of the losing interest groups play again in 2024? 

And if both initiatives pass expect the lawyers to start the duels over whether the initiatives are in harmony or playing different tunes.  The Prop 27 proponents say they play well together, but the Prop 26 proponents won’t be shaking hands on that any time soon.