Ready, Set, Go: California Operator Initiative To Start Gathering Signatures

Written By Matthew Kredell on November 5, 2021 - Last Updated on November 4, 2021

The California Attorney General issued statement and summary for the mobile sports betting initiative backed by sportsbook operators.

The campaign backing the California Solutions to Homelessness and Mental Health Support Act can now begin collecting signatures.

And they don’t intend to waste any time.

“We’ll immediately have our folks around the state with their clipboards ready to attach the petitions and hit the streets,” campaign spokesman Nathan Click told PlayCA. “They have their running shoes on and a Xerox machine.”

Title and summary language for CA sports betting operator initiative

In part, the California Attorney General prepared the following title and summary of the chief purpose and points of the proposed measure:

ALLOWS ONLINE AND MOBILE SPORTS WAGERING. INITIATIVE
CONSTITUTIONAL AMENDMENT AND STATUTE.

Legalizes online and mobile sports wagering, which currently is prohibited, for persons 21 years and older. Such wagering may be offered only by federally recognized Indian tribes and eligible businesses that contract with them. Individuals placing bets must be in California and not located on Indian lands. Imposes 10% tax on sports-wagering revenues and licensing fees. Directs tax and licensing revenues first to regulatory costs, then remainder to: 85% to homelessness programs; 15% to nonparticipating tribes. Specifies licensing, regulatory, consumer-protection, and betting-integrity standards for sports wagering. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Increased state revenues, potentially reaching the mid-hundreds of millions of dollars annually, from online sports wagering-related taxes, licensing fees, and penalties. Some portion of these revenues would reflect a shift from other existing state and local revenues.

That text will be printed on all petitions circulated to California citizens for signature.

Fiscal analysis for operator sports betting initiative

The initiative focuses only on online sports betting in California. Operators must partner with federally recognized Indian tribes in the state to enter the market. There are 104 such tribes in California that operate 66 tribal casinos.

Operators entering the California market must pay a $100 million initial fee. That steep price of entry will limit the marketplace, along with various requirements for operating in other jurisdictions.

Tribes can also develop their own sports wagering platforms and pay $10 million for an initial license.

There’s a 10% tax on adjusted sports wagering revenue. Operators may deduct promotional credits, federal gaming taxes and up to 20% of license fees.

The initiative leaves out sports teams, card rooms and racetracks.

In their fiscal impact report, California’s Legislative Analyst and Department of Finance estimated the initiative would generate increased state revenues potentially reaching the mid-hundreds of millions annually.

CA sports betting initiative path to the ballot

The campaign hired PCI Consultants to run the signature collection. Since its founding in 1992, the Los Angeles-based firm has gathered more than 44 million signatures and qualified hundreds of state and local initiatives.

Signatures must be submitted by April 26. That gives counties enough time to verify them by the June deadline to make the ballot.

As a constitutional amendment, the initiative must obtain 997,139 valid signatures.

One sports betting initiative backed by Indian tribes already qualified for the ballot. Another backed by card rooms began circulating two weeks ago. And three tribes have expressed intent to introduce a fourth initiative.

Click said the campaign intends to collect about 1.4 million signatures to ensure reaching the required number. Collection during the pandemic becomes more challenging. However, Click said most of the gathering likely will occur through the tried-and-true method of dispersing circulators with clipboards across the state.

“The old school way is probably the most cost-effective, but either way we’re confident we’re going to get the signatures and we’re going to have the resources to fund a really successful signature campaign,” Click said.

Money won’t be an issue. The campaign raised an initial $100 million from seven sports betting companies. And Click promised that more money is waiting if needed.

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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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