Tribal Ad Targets DraftKings CEO’s Comments About Online Sports Betting Initiative

Written By Matthew Kredell on June 29, 2022 - Last Updated on August 22, 2022

A new ad campaign offered by tribal casinos calls out DraftKings CEO Jason Robins for focusing on profits when discussing the California online sports betting initiative.

Backed by seven companies looking to operate sportsbooks\, the initiative highlights using California sports betting revenues to fight homelessness.

The advertisement centers around comments Robins made June 6 at the Goldman Sachs Travel & Leisure Conference regarding the initiative having a “very reasonable” tax rate. In the initiative, operators pay a 10% tax rate on adjusted gross sports wagering revenue.

Californians for Tribal Sovereignty and Safe Gaming contends the operator initiative is about profits, not helping the homeless.

“The out-of-state CEO divulged this backroom tactic when he assured his investors that their California ballot measure is all about corporate profits and controlling the market,” said Rob Stutzman, spokesman for Californians for Tribal Sovereignty and Safe Gaming. “California voters are already catching on to this scam and are poised to thwart his corporate-profit dreams.”

The new video against online sports wagering initiative

The video claims that Robins bragged to investors about setting an industry-friendly tax rate in the initiative.

Here’s a transcript of the newest ad against the online operator initiative:

“They call their California sports betting initiative ‘solutions for homelessness.’

But DraftKings’ CEO recently went a little off script bragging to investors that the initiative has a tax rate set by the industry. Because, he chortled, ‘you can actually write the whole piece of legislation on the ballot, which is nice.’

He said a lot about profits, but not a single word about homelessness. Corporate online sports betting. They didn’t write it for the homeless. They wrote it for themselves.”

What Robins said at conference

At a conference centered around investors, it makes sense that Robins focused his comments on profitability.

Here was his exact phrasing as referenced in the ad:

“The tax rate, everything is set in a very reasonable way because you can actually write the whole piece of legislation on the ballot, which is nice. There’s still licensing and other stuff that will have to go through the regulators, but a lot of that – which could make it faster, who knows – is already defined through the legislation.”

It’s commonplace for companies backing initiatives to put in more industry-friendly terms than they could get through the legislature.

Tribes backing the other sports betting initiative appearing on the November ballot had similar ideas in crafting friendlier language than they would get from the legislature.

The in-person sports betting initiative also establishes a 10% tax rate for sportsbooks at horse racetracks. The measure doesn’t mention a tax rate for tribes. As sovereign nations, they would have to work out their own separate revenue-sharing deals with the state.

Californians for Tribal Sovereignty and Safe Gaming is supported by the same tribes sponsoring an online sports betting initiative for the 2024 ballot.

Backed by San Manuel, Rincon and Wilton Rancheria, it offers a template compact amendment that includes a 20% tax rate. It also puts 10% of adjusted gross sports wagering revenue toward homelessness and mental health. But it sets aside another 10% for non-gaming and limited-gaming tribes.

What else Robins said regarding California

At the conference, Robins talked about what California could do for the company’s market penetration. Once sports betting launches in Ohio, Maryland and Puerto Rico, DraftKings will be available to 46% of the United States population.

Adding California would bring that total to 58.5%, close to the company’s long-term target of 65%.

If the initiative passes in November, Roberts said he hoped for market launch in 2023 ahead of the NFL season.

Robins will provide a keynote speech next week at the National Council of Legislators from Gaming States Conference in Boston.

Operator campaign response to attack video

In response to the video, operator campaign spokesperson Nathan Click pointed out that state fiscal projections for each initiative favored the operator proposal.

“Californians aren’t going to be fooled by these false attacks,” Click said. “California’s nonpartisan budget analyst office estimated that our initiative would raise hundreds of millions in dollars each year for homelessness and mental health and addiction treatment — many times more revenue for the state than any other proposed or qualified sports betting initiative.”

Revenue expectations for homelessness efforts also have garnered support from the mayors of Sacramento, Fresno, Oakland and Long Beach. More than a dozen homelessness and housing service organizations support it as well.

Click added:

“Mayors, homelessness advocates and organizations on the frontlines of our state’s homelessness crisis all support our measure because it would provide substantial and meaningful solutions to help get those experiencing homelessness off the street and into permanent housing.”

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