Spending Nears $450M For California Sports Betting Propositions; Most Expensive Ever

Written By Steve Friess on August 9, 2022 - Last Updated on October 4, 2022
Spending soars on California sports betting propositions

With nearly $450 million — and counting — in campaign coffers, California’s dueling sports betting propositions already combine as the most expensive ballot questions in the history of American politics.

And there’s still a month until Election Day.

Two California sports betting propositions will appear on the Nov. 8 General Election ballot.

California sports betting propositions ‘well worth the cost’

Proposition 27 asks voters to approve online sports betting in California. Gaming companies already licensed in 10 states can pay $100 million to apply and must partner with a tribe. Proposition 26 seeks voter approval for in-person sports betting at California tribal casinos and a select number of horse racing venues.

The two questions have become a bitter, costly battle royale between the state’s gaming tribes and some of the nation’s largest gambling interests.

According to Occidental College political science professor Isaac Hale, an expert on Golden State proposition politics, the prospects of owning a big piece of the sports betting market in the nation’s largest state are well worth the cost.

“A big part of the insight as to why these propositions are so expensive is that $300 million is a drop in the bucket compared to the expected sports betting revenue that will be generated in California,” Hale said.

As of Oct. 4, four groups waging this war have already anted up a combined $447.6 million:

  • The Coalition for Safe, Responsible Gaming: Made up of gaming tribes, this committee has raised more than $123.3 million to support the passage of Prop 26 and oppose Prop 27.
  • Taxpayers Against Special Interest Monopolies: Made up of card rooms and bars that offer some gambling, raising more than $38.9 million to oppose Prop 26. The committee is concerned about language in Prop 26 that would allow tribes to directly sue card rooms over alleged violations of state gambling laws.
  • Yes on 27: Seven of the nation’s largest casino companies have kicked in $169.3 million to support Prop 27 and launch online betting in the state.
  • No on 27: The coalition of gaming tribes has raised $116.2 million.

Historical context and confusing math

All of this makes Prop 27 destined to dethrone 2020’s Prop 22 as the most expensive ballot question in U.S. history.

That measure, which passed handily, was the project of the app-based ride-share and food delivery industry – Uber, Lyft and DoorDash, Postmates and Instacart – which shoveled $205.37 million to carve out their drivers as “independent contractors” rather than “employees” in a new state employment law.

An alliance of unions fought that effort to the tune of $18.88 million but lost. That put the total spending on Prop 22 at $224.25 million.

Hale cautioned against combining this year’s totals as if they were one question for the purposes of comparing with Prop 22. He noted the national gaming companies who support Prop 27 don’t necessarily oppose Prop 26.

If Prop 26 passes and Prop 27 fails, the thinking goes, at least sports betting will be legal in some form in California. That will open a market that non-tribal entities might be able to get into later.

Yet it’s impossible to fully disentangle Props 26 and 27 when analyzing the amount of spending because one group – the Coalition for Safe, Responsible Gaming – is spending on both out of the same $121.3 million pot. Official state public finance records tend to count those dollars twice – once as supporting Prop 26 and again as opposing Prop 27.

Operators need to go the extra mile for California online sports betting

Regardless, controversial California ballot initiatives tend to be eye-popping expensive battles with little peer around the nation. Campaigning statewide in the Golden State, the nation’s most populous and home to three of the biggest media markets in America, takes enormous sums, and not every state even has a ballot initiative process.

By contrast, the most ever spent on a Maryland ballot initiative was the 2012 battle that expanded legalized gambling; MGM Resorts, which supported it, and Penn National, which opposed it, spent a combined $95 million.

It’s usually far less clear how much is being spent on legalizing various forms of gambling around the U.S. That’s because, typically, it occurs via legislative action that is spurred on by lobbying, says Eric Ramsey, lead analyst for PlayCA.

“Expansion elsewhere in the U.S. has typically been fostered by direct lobbying targeted toward a few key members of a given legislature, with donations perhaps reaching into the low six figures in extreme cases,” Ramsey says. “These California ballot measures, meanwhile, require the operators to convince the largest voting base in the country to say yes to their plan.”

Where the money to legalize (or not) is coming from

One side – the Yes on 27 group – is unlikely to change rise much. Seven gambling companies, led by DraftKings, BetMGM and FanDuel, have already amassed $169.3 million even as polls are show a likely defeat.

One bit of intrigue — Caesars Entertainment, the largest gaming company already doing business in California, will not be involved. As PlayCA first reported in July, the company sees little upside to offending its tribal partners by joining the Yes on 27 brigade.

Yet one of those partners is the Rincon Band of Luiseno Indians, which owns Harrah’s Resort Southern California. The tribe has kicked in a total of $10.6 million to the two committees opposing Prop 27.

Caesars’ other partner, the Buena Vista Rancheria of Mi-Wuk Indians, has not spent on either proposition. Caesars operates Harrah’s Resort Northern California, an hour southeast of Sacramento for that tribe.

Contributors to California online sports betting propositions

Until Election Day, PlayCA will keep tabs on the biggest donors to each of these committees and update this information.

Coalition for Safe, Responsible Gaming

ContributorContributions
Federated Indians of Graton Rancheria$31,859,359
Pechanga Band of Indians$27,436,094
Yocha Dehe Wintun Nation$22,242,734
Agua Caliente Band of Cahuilla Indians$11,501,868
Barona Band of Mission Indians$11,380,475
Sycuan Band of Kumeyaay Nation$5,882,944
Chumash Casino and Resort Enterprises$5,750,000
Saboba Band of Luiseno Indians$2,500,000
Shingle Springs Band of Miwok Indians$2,010,218
San Manuel Band of Mission Indians$1,650,000
Rincon Band of Luiseno Indians$600,000
Viejas Band of Kumeyaay Indians$200,000
Total$123,263,691

Taxpayers Against Special Interest Monopolies

ContributorContributions
California Commerce Club, Inc.$10,085,001
Hawaiian Gardens Casino$10,085,000
Park West Casinos, Inc.$2,085,000
The Bicycle Hotel & Casino$2,085,000
Knighted Ventures LLC$2,060,000
Bumb & Associates Inc. and Affiliated Entities$2,000,000
Garden City Inc. dba Casino M8trix$2,000,000
PT Gaming LLC$1,585,000
Blackstone Gaming, LLC$1,485,000
Flynt Management Group, LLC$1,000,000
Artichoke Joe's, Inc.$1,000,000
California Grand Casino$500,000
Elevation Entertainment Group$500,000
Oaks Card Club$400,000
Delta C LP$350,000
Napa Valley Casino$302,016
Sahara Dunes Casino$300,000
Oceans Eleven Casino$250,000
Celebrity Casinos aka Crystal Casino$250,000
Capitol Casino$250,000
East Sea Investment Group$150,000
LE Gaming$100,000
Palace Poker$75,000
Stars Gaming$50,000
Total$38,947,017

Yes on 27: Solutions to Homelessness, Mental Health and Addiction

ContributorContributions
Betfair Interactive US LLC d/b/a Fanduel Sportsbook$35,009,850
Crown Gaming Inc. d/b/a DraftKings$34,326,311
Penn National Gaming Inc$25,000,000
FBG ENTERPRISES, LLC$25,000,000
BETMGM LLC$25,000,000
WSI US LLC$12,500,000
Bally's Interactive LLC$12,500,000
Total$169,336,161

No on 27: Californians for Tribal Sovereignty and Safe Gaming

ContributorContributions
San Manuel Band of Mission Indians$103,077,414
Rincon Band of Luiseno Mission Indians of the Rincons Reservation California$10,000,000
Pala Casino Resort Spa$3,000,000
Wilton Rancheria$50,000
Pala Band of Mission Indians$28,131
Elk Valley Rancheria$6,000
Torres Martinez Desert Cahuilla Indians$5,000
California Democratic Party$1,307
Total (From Top Contributors)$116,166,852

 

Photo by YouTube | Yes on 27
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Written by
Steve Friess

Steve Friess is the national gambling industry correspondent for PlayCA. He is also a contributing writer for Newsweek. A Long Island native who earned a journalism degree at Northwestern University, Friess worked at newspapers in Rockford, Ill., Las Vegas, and South Florida before launching a freelance career in Beijing, China, where he served as chief China correspondent for USA Today. After his return to the U.S. in 2003, he settled in Las Vegas, where he covered the gambling industry and the American Southwest regularly for The New York Times, Playboy, The New Republic, Time, Portfolio, BusinessWeek, Newsweek, New York magazine, and many others. During that time, he created and co-hosted two successful and groundbreaking podcasts, the celebrity-interview show The Strip and the animal affairs program The Petcast. In 2011-12, Friess was a Knight-Wallace Fellow for at the University of Michigan. That was followed by a stint as a senior writer covering the intersection of technology and politics at Politico in Washington, D.C., In 2013, he returned permanently to Ann Arbor, where he now lives with his husband, son, daughter and three Pomeranians. He tweets at @SteveFriess and can be reached at [email protected]

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