Voters soundly turned down the idea of legal sports betting in California during the 2022 election. DraftKings and other U.S. online sportsbooks backed Prop 27, a ballot initiative that would legalize online sports betting.
However, more than 80% of Californians voted “no” on it.
After a loss like that, those operators may want to hold off on a second try. But it looks like DraftKings may be open to backing a California sports betting ballot initiative again in 2024 — if the recently filed tribal initiatives gain any traction.
DraftKings CEO: California is one of the ‘big prizes’
During the company’s third-quarter earnings call, DraftKings’ CEO Jason Robins talked about the incredible growth the company is seeing. DraftKings’ stocks roared with an impressive 26.69% gain, reinforcing an amazing year-to-date increase of 196.31%. The company expects to end 2023 with an estimated $3.7 billion in revenue.
Despite all that success, the company still sees potential for more. The future of a Golden State sports betting industry will dictate how much more the company can grow nationwide.
Robins pointed to California, Texas and Florida as the “big prizes” that could help fuel future growth. However, he added it could take some patience.
“Hopefully, we get some traction there this year. Obviously, the big prizes of California, Texas, and Florida are still out there,” said Robin. “But those might be a little longer path with Texas not meeting again until ’25 and Florida and California requiring ballot initiatives. So those are really kind of the big states in terms of population left out there.”
California tribes could stand in the way of DraftKings dominating California sports betting
The road to legal sports betting in California is going to be a bumpy one. For DraftKings and other commercial operators to enter the market, California Native American Tribes are the big obstacle.
The California gambling landscape features a ton of different interests. California tribal casinos have exclusivity over Las Vegas-style casino gaming. But California cardrooms and horse tracks are also interested in any gambling expansion.
In 2022, US commercial online sportsbooks backed Prop 27. The initiative said it would legalize non-tribal entities to operate online sportsbooks. DraftKings and other major operators financially backed the efforts to pass it.
Meanwhile, the tribes supported Prop 26, an initiative that wanted to legalize in-person betting at tribal casinos and horse racetracks. The voters shut down this measure as well.
However, the tribes poured a ton of funding into making sure Prop 27 failed. They spent around $240 million to crush the measure. Robins said that any similar attempts to legalize betting will be met with pushback from the tribes.
Tribal-only sports betting initiative already filed for 2024
Last week, a Californian filed two measures that could be on the ballot in 2024. One initiative gave the tribes control of the sports betting market. The other barred any non-tribal entities from operating a sportsbook.
In other words, if those measures were passed, DraftKings California would never exist. Therefore, DraftKings could run back their 2022 efforts if these measures generate any significant momentum.
However, the measures are not expected to go very far, with several major tribes already voicing their displeasure with them and their lack of input.
A 2024 effort would reverse Robins’ previous course
Earlier this year, Robins said he wasn’t sure about the prospects of the state legalizing sports betting in 2024.
“I don’t think it’s a 2024 thing,” Robins said a March 2023. ” … I think there either has got to be a deal worked out, or we’re just going to be in a stalemate there for at least another (election) cycle or two.”
At shy of 40 million residents, California is by far the most populous state in the country. Experts projected ahead of the 2022 election that a mature California sports betting market could generate as much as $3.2 billion in annual revenue.
