New Prop 27 Ad Asks Voters To Choose Between California Sports Betting Options

Written By Matthew Kredell on August 18, 2022 - Last Updated on September 12, 2022

Once upon a time, backers of California’s online sports betting measure tried to play nice with the in-person tribal sports gambling proposal.

That didn’t work.

Now the Yes on 27 campaign is asking voters to choose their California sports betting proposal over the other. A new TV ad compares the sports betting measures, providing reasons to vote for Proposition 27 over Proposition 26.

The ad contends that Prop 27 is the only sports betting measure that funds homelessness solutions, protects minors and helps disadvantaged tribes.

Here’s a breakdown of both initiatives.

Detailing new Prop 27 ad claims

Here’s the new Yes on 27 ad. The narrator says:

“Californians have a choice between two initiatives on sports betting. Prop 27 generates hundreds of millions every year to permanently fund getting people off the streets and into housing. Prop 26 – not a dime to solve homelessness. Prop 27 has strong protections to prevent minors from betting. Prop 26 – no protections for minors. Prop 27 helps every tribe, including disadvantaged tribes. Prop 26 – nothing for disadvantaged tribes. Vote yes on 27.”

A press release accompanying the ad attempts to substantiate the claims.

The first one is easy. Prop 26 allocates most of its revenues to the general fund. Prop 27 directs 85% of tax revenue to homelessness and mental health programs.

Prop 27 limits online betting to individuals 21 and over and imposes fines of up to $100,000 for any operator who knowingly accepts bets from minors.

The Yes on 27 campaign claims that Prop 26 has no penalties for operators who knowingly take bets from minors, does not prohibit tribal casinos from taking bets from minors and would allow betting on youth sports.

Prop 27 allocates the remaining 15% of tax revenue to Indian tribes that do not participate in online sports betting.

California gaming tribes contribute casino revenue to the Indian Gaming Revenue Share Trust Fund (RSTF). Money in the fund gets distributed to limited and non-gaming tribes in the state. The press release indicates that nothing in Prop 26 requires an increase in those payments.

Tribes have committed to sharing sports betting revenue

Kathy Fairbanks, spokesperson for the Coalition for Safe, Responsible Gaming, responded to the claims in the ad. The Coalition supports Prop 26 and opposes Prop 27.

She shared a letter tribal leaders backing Prop 26 sent to other California tribal leaders earlier this year committing to including revenue sharing of at least 15% in any sports betting compacts made with the state.

Eligible RSTF tribes currently receive $1.1 million annually. The letter estimates $436 million in statewide net sports gaming revenues by the third year. Adding 15% to the RSTF would provide each tribe an additional $934,320.

That’s a 90% increase in RSTF funds, and the letter mentions that figure should increase as the market matures.

“In contrast to the existing RSTF, which is only available to limited and non-gaming tribes, the Prop 27 fund would allow any tribe not participating in online sports wagering to collect funds, watering down and leaving less for small tribes who currently collect from the RSTF,” Fairbanks said. “Under Prop 27, larger tribes with casinos can collect funds if they don’t partner with an online operator.”

The letter doesn’t mention revenue from dice games and roulette, which also are included in Prop 26.

Santa Rosa Band of Cahuilla Indians Chair Lovina Saul Redner alluded to the Prop 26 RSTF contributions at a Joint Governmental Organization Committee hearing last week:

“Prop 26 would nearly double the funding provided to small tribes and non-gaming RSTF tribes annually. … Prop 26 helps small tribes like mine, that’s why Prop 26 is supported by both gaming and non-gaming tribes from all corners of the state.”

Yes on 26 response to protections for minors

The Yes on 26 response to the ad’s allegations that Prop 26 contains no protections for minors centers around the protections already in place at tribal casinos.

Fairbanks points out that Prop 26 amends the state constitution to require adults to be physically present in a facility to place sports wagers.

“This allows someone to visually look at the person and make sure their ID matches their face and they look of age,” Fairbanks said. “There’s no fool-proof way to ensure minors aren’t gambling. A child could use their parent’s phone, for example, and the online operators wouldn’t know the difference. No one would mistake a child for a parent in a tribal casino or horse race track.”

And while it’s true that tribal sovereign immunity generally prohibits state law enforcement officers from entering tribal lands to enforce state laws, tribes would put at risk all of the economic benefits they’ve gained from gaming by allowing wagering by minors.

Prop 26 also prohibits the marketing and advertising of sports wagering to persons younger than 21 years old.

It is possible that some tribal casinos under Prop 26 offer sports betting with a minimum age of 18 years old.

Some California tribal casinos that don’t sell alcohol currently offer casino gaming to people aged 18, which is still legal age to be considered an adult. Whether or not that would carry over to sports betting would be negotiated in compacts with the state.

The vast majority of California tribal casinos limit gaming to those 21 and over.

No handshake at the sports betting finish line

Last November, representatives from the operators behind Prop 27 spoke at the Indian Gaming Association conference at Pechanga Resort Casino. Pechanga is the leading tribe behind Prop 26.

The operators pitched that the campaigns work together.

FanDuel VP Jonathan Edson and DraftKings VP Jeremy Elbaum spoke much friendlier about Prop 26 then.

“Obviously, the tribal initiative, the retail one, we think is great,” Elbaum said. “We think it makes sense.”

“We view our initiative as complementary to the existing tribal bricks and mortar initiative,” Edson added. “So as ours moves forward, theirs will move forward as well.”

Prop 27 includes language clarifying that it is not in conflict with Prop 26. However, tribal opponents say they would sue to stop Prop 27 if both pass.

There’s no friendliness between the campaigns anymore. The coalition backing Prop 26 is the primary group opposing Prop 27. And now backers of Prop 27 officially are asking voters to pick their sports betting proposal and not Prop 26.

Photo by Yes on Prop 27 ad
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