CA Sports Betting Ballot War Already The Most Expensive In US History

Written By David Danzis on October 24, 2022 - Last Updated on October 31, 2022
CA sports betting fail cost

The high-stakes attempt to legalize sports betting in California is punctuated by record-setting expenses and astronomical projections but may be best remembered as an epic failure.

Nearly every gambling industry expert and observer predicts California sports betting to be a 21st-century Gold Rush. Some estimates suggest that legal online sports betting would make California the largest US market within the first year.

Interested parties are spending big because of California’s potential. More money has been raised on campaigns to support or oppose sports betting in California than any other topic in American history.

When all is said and done, the efforts surrounding Proposition 26 and Proposition 27 may go down as the two most expensive ballot defeats. Recent polling shows the two competing initiatives face double-digit deficits ahead of Election Day.

California’s sports betting market would almost certainly be largest in US

Is it surprising that industry experts expect California to be the country’s largest sports gambling market?

The state’s 40 million residents have a higher median income than the national average and a proven affinity for gambling. California is the top U.S. tourist destination for domestic and international travelers.

California also boasts 21 professional sports franchises and 25 Division 1 college teams, easily the most in the country.

Taken together, PlayCA forecasts nearly $40 billion in annual sports bets. That would produce roughly $3 billion in revenue and almost $200 million in taxes.

For comparison, New Jersey, the largest US sports betting market until earlier this year, has only taken $30.5 billion in wagers since May 2018.

Money well spent?

The battle for control of a legal California sports betting market gives new meaning to the old saying, “you need to spend money to make money.”

Online sportsbook operators and tribal casino owners recognized this early on, putting nine-figure totals into separate spending pots to back their respective measures. Then, opposition donations started pouring in to defeat the two propositions.

As of the most recent PlayCA update last week, the various entities involved have reported more than $454 million to state campaign officials.

Seven of the largest casino companies put in $169.3 million to support Prop 27 and launch online betting. A coalition of gaming tribes has raised $116.2 million against Prop 27.

Favoring Prop 26, California tribal casino operators pitched in nearly $130 million to the campaign. Fearing what Prop 26 would do to their businesses, a coalition of California cardrooms raised $39 million to defeat it.

Polling trends of CA sports betting proposals

Millions of dollars have been spent in the last few months to flood California media with advertisements surrounding sports gambling.

At least some of it backfired. The odds of voters approving either Prop 26 or Prop 27 are long, according to independent polls.

In February, UC Berkeley’s Institute of Governmental Studies found almost 45% of California voters supported legalizing sports betting. That poll did not ask about the eventual sports betting ballot proposals, only whether the gambling expansion should be legally permitted.

The most recent IGS poll indicates that 42% and 53% oppose Prop 26 and Prop 27, respectively.

Editorial boards of major California newspapers are also encouraging voters to oppose Prop 26 and Prop 27.

However, smart money says California will take another swing at legalizing sports betting. A handful of tribes are already working on a ballot question for 2024. And earlier this month, online operators vowed to keep pushing if their current efforts fail.

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David Danzis

David Danzis is a lead writer and analyst for CatenaMedia's network of Play sites, appearing on PlayNJ, PlayCA and PlayOH. He is a New Jersey native and an honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. After years of reporting on Atlantic City casinos, NJ online gambling and sports betting, his focus is now on emerging gaming markets. David lives in NJ with his wife and two children. When not on the beach, golf course, or snowboarding, David enjoys watching his beloved New York sports teams — Yankees, Jets, Rangers, and Knicks.

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