Revised California Initiative Proposal From Sports Betting Operators Slides In Under Deadline

Posted By Matthew Kredell on October 6, 2021 - Last Updated on October 5, 2021

Sports betting operators made small changes to their initiative to address concerns expressed by tribes, sports leagues and homelessness advocates.

The petitioners submitted the changes to the California Attorney General’s office on Tuesday, the last day to amend the proposal.

The Attorney General will issue a title and summary for the petition by about Nov. 4.

At that point, the Californians for Solutions to Homelessness and Mental Health Support campaign can begin gathering the needed 997,139 valid signatures required to make the November 2022 ballot.

“Changes made today ensure funding for homelessness and mental health programs is used efficiently and with the highest order of accountability,” said Nathan Click, spokesman for the campaign. “Our filing also includes provisions that have been adopted in other states designed to protect the integrity of competitions and provide means for sports governing bodies to implement their integrity programs.”

CA sports betting changes made to protect tribal sovereignty

Sports betting operators are doing everything they can to make California’s Native American tribes supportive of their measure.

Many changes made address tribal concerns. The amendments show that there have at least been discussions between the tribes and operators.

One change specifies that operators couldn’t offer sports betting in California without a tribal partner. Petitioners removed the following language seen by tribes as a possible loophole to that provision:

“In the event that Section 19769 is found by a court of competent jurisdiction to be unenforceable in whole or in part under state or federal law, the Division shall adopt, amend, or rescind regulations necessary to permit a qualified gaming entity to apply for, obtain, and renew an individual operator license in order to offer, conduct, and/or operate online sports betting as set forth in this chapter without any involvement whatsoever of a gaming tribe.”

It’s of utmost importance to tribes to retain their sovereignty in all dealings with the state. The amended proposal creates an online sports betting platform provider application. The mobile partner would pay the 10% tax rate, not the tribe itself. So the tribe wouldn’t we waiving sovereignty.

“Other changes further build upon the initiative’s inclusion of California Tribal nations and the complementary nature of the two measures,” Click said. “Our filing reiterates that tribes will be able to operate online sports betting under our measure, and that non-tribal entities can access the market only through a partnership with a California tribe.”

Language amended regarding conflicting measures

Petitioners strengthened language ensuring that the initiative doesn’t conflict with the in-person sports betting initiative submitted by tribes. That initiative, which limits betting to physical locations at tribal casinos or horse racetracks, already qualified for the 2022 ballot.

Now the proposal specifically names the tribal initiative by its number designated by the Attorney General’s Office.

However, if another online sports betting initiative makes the ballot, such as the one backed by some cities and cardrooms, it is held in conflict. If they both passed, the initiative with the most votes would prevail and the other considered null and void.

Restrictions on betting requested by sports leagues

The amended proposal includes language for professional sports leagues to request the exclusion of certain bets. Legislatures in many states have added similar language to bills at the request of sports leagues.

The leagues seek some control over the sports bets offered to ensure they don’t create integrity issues.

The language ensures that sports leagues would be able to request:

“to restrict, limit, or exclude a certain type, form, or category of online sports betting … if the sports governing body believes that such type, form, or category of online sports betting … may undermine the integrity or perceived integrity” of the sports league or game.”

More specifics regarding use of CA sports betting revenue

A key part of the operator initiative is where money generated by regulated wagering would go. As written, 85% of tax revenue and fees from online sports betting goes to homelessness prevention and mental health services. Polling shows that generating revenue for those issues resonates with voters.

After hearing from advocates in those spaces, the petitioners made some additions in directing online sports betting revenue.

The money still goes into the California Solutions to Homelessness and Mental Health Support Account. Now it also specifies using money in the account “for the purpose of delivering permanent and interim housing, including rental assistance, supportive services, and operating subsidies or reserves for these purposes.”

New language adds:

“Moneys in the account shall be made available to cities, counties, and continuums of care according to the same allocation formula for the most recent fiscal year used to distribute moneys to those entities under the Homelessness Housing, Assistance, and Prevention program established in Chapter 6 (commencing with Section 50216) of Part 1 of Division 31 of the Health and Safety Code (the “HHAP law”), or any successor statute.”

Photo by AP / Alex Gallardo
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Matthew Kredell

Matthew has covered efforts to legalize and regulate online gambling since 2007. His reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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