Well, Actually… : Rebutting The SF Chronicle’s California Sports Betting Editorial

Written By Steven Schult on October 5, 2022 - Last Updated on November 2, 2022
CA sports betting san francisco chronicle

With Election Day about a month away, the electorate is nearly ready to head to the ballot box. Conversely, major newspapers endorse political candidates and ballot initiatives up for a vote.

Two California sports betting ballot initiatives are up for a vote this fall. But the state’s newspapers are coming out in droves against both.

Proposition 26 would legalize in-person sports betting at California tribal casinos and four horse racing tracks. On the other hand, Proposition 27 would allow online sportsbooks to partner with tribes to provide online betting.

As Election Day continues to creep closer, some of the Golden State’s largest outlets are taking a stand against the sports betting proposals.

Just a few weeks ago, the Los Angeles Times released an editorial essentially fearmongering against the two initiatives. Just two days ago, the largest newspaper in Northern California, the San Francisco Chronicle, released an op-ed stating the editorial board’s reasons why residents should vote ‘no’ on Props 26 and 27.

Like nearly every other publication, the Chronicle’s arguments against these initiatives are inherently flawed.

SF Chronicle believes the legislature should write these initiatives

Let’s work backward for a moment. The editorial board laid out four main arguments for why voters should reject these measures. However, at the end of their piece, they tie all four together to explain why the initiatives are poorly crafted.

It’s an argument most newspapers are making. They believe that California lawmakers should craft these proposals. In their eyes, the legislature is the only entity able to write these proposals without bias.

“These types of nuanced discussions should take place in the California Legislature, where laws can be honed for ethics and effectiveness by experts. Yes, the Legislature is limited in that existing gaming laws can only be changed by ballot measure. Any reform driven by public officials would have to pass by a two-thirds vote in both legislative chambers. That effort would then head to the ballot for a vote from the people.”

As I’ve mentioned in past critiques of other newspapers, this isn’t a crazy idea. It’s just too utopian for it to work. In a state as large and diverse as California, it just won’t happen.

There are too many moving parts in the Golden State

Most people would agree that special interest groups and lobbyists buy off federal lawmakers.

But why is that? Why do lobbyists want to get federal lawmakers in their pockets?

Because the United States is a gigantic market. Roughly 329 million possible consumers are living within the country’s borders. Consequently, there’s a lot of money at stake and lobbyists want to ensure their people get a large piece of the pie.

Take that same concept and shrink it down to the state level.

By population, the three largest states in the country are California, Texas and Florida. It’s probably a coincidence that none of those jurisdictions have sports betting available to its residents.

The larger a state’s population, the larger the potential market is. The larger the market is, the more money is at stake. The more money at stake, the more incentive there is for powerful groups and individuals to fight for a larger piece of that market.

Unfortunately, corruption and politics go hand in hand. That could change down the road. But for now, I don’t think there’s anyone that would argue otherwise.

As the Chronicle correctly points out, backers of these proposals spent hundreds of millions of dollars in advertising. But if this process went through the legislature, these groups would inevitably line the pockets of politicians instead of spending it on media campaigns.

SF Chronicle’s arguments against Prop 26

Enough working backward. Let’s examine why the Chronicle is taking a stance against the two initiatives.

It is the nature of a critique, but I usually disparage many of the arguments put forward by these newspapers.

When some smaller newspapers began releasing these articles last month, it was clear that many authors didn’t even read the proposals. Even the Los Angeles Times piece was pretty sloppily done.

But to the Chronicle’s credit, most of the arguments prove the editorial board did at least cursory research on the propositions. While still somewhat flawed, they did at least do some reading.

The bar still isn’t high, but it’s getting raised.

Bad argument #1: Giving sportsbooks to horse tracks will exacerbate horse racing problems

California horse racingThe first argument against the tribal initiative is an easy one to relate to. Horses are beautiful creatures, and the board doesn’t want to help prop up an industry that is possibly abusing them.

It’s a similar sentiment that eventually led to the end of greyhound racing. Enough dog lovers didn’t want to see these animals treated poorly. The movement led to the end of the industry altogether.

However, nobody is outright calling for the end of California horse racing. Instead, most just want to see reforms made to ensure horse safety.

“We’re deeply concerned about Prop. 26’s ties to the horse racing industry. More than 80 race horses have died at Golden Gate Fields alone since 2018. Reforms have been slow, and Prop. 26 provides no new requirements for safety, despite mandating that live racing has to continue for facilities to be eligible for sports betting.”

Well, actually…

The argument about the horse racing industry just lacks a bit of nuance.

Yes, the claims about Golden Gate are factually correct, but they do not address why these deaths happen.

The Stronach Group owns Golden Gate Fields in Berkeley and Santa Anita Park in Arcadia. Both facilities would be eligible for a sportsbook under Prop 26.

But while Golden Gate’s safety record is a bit suspect, Santa Anita Park’s recent safety record is as strong as that of any track in the country. Therefore, this isn’t a top-down problem. Since that’s the case, there is no reason to believe more money in the Stronach Group’s pocket would result in lower safety standards.

The Chronicle is correct that horse racing reforms are needed. The industry certainly needs a standardized method to track deaths and their reason. But there’s also no reason to believe that keeping these facilities from operating sportsbooks will expedite those measures.

Bad argument #2: Voters don’t know the intricacies of the proposal

At the outset of this argument, I thought the board was in fact, making a solid argument.

They cited the clause in the proposal allowing tribes to sue California cardrooms over their gaming options. In addition to poker, most cardrooms offer variations of house-backed card games.

This is a point of contention for most tribes who argue they have exclusivity over these games per their compact with the state. In practice, this clause could spell the end of cardrooms that serve most of the larger, urban areas in California.

Since the cardrooms mostly operate in the most-populated areas, it’s a big deal if these facilities were to disappear.

But the Chronicle doesn’t argue that this clause is the reason to vote no. They think it’s just one of many examples where voters don’t know what they are voting on.

“We’re not overly concerned about tribes bringing frivolous lawsuits; there are strict rules within the civil litigation system to prevent abuse and we trust the courts to uphold them. But are voters really equipped to weigh in on what’s clearly a confusing and long-standing legal battle between cardrooms and tribal casinos? Are they even aware of what they’re voting on?”

Well, actually…

Dear San Francisco Chronicle: Remember when you argued for the legislature to do their job? Pot, meet kettle.

The whole point of a free press is to educate the public on the day’s issues.

Is the public aware of what they are voting on? If they aren’t, isn’t that an indictment of the media? Not the ballot initiative.

PlayCA’s Matt Kredell began reporting on the possible legal fallout between tribes and cardrooms last year. He even detailed the cardrooms’ legal efforts to block Prop 26 from appearing on the ballot earlier this year.

If you want your readers to be more informed about the sports betting initiatives, just send them here.

The arguments for a ‘no’ vote on Prop 27

The Chronicle’s arguments against the online betting initiative are just lazy. Regarding this initiative, the newspaper resorts to the same fearmongering tactics used by anti-gambling advocacy groups.

Bad argument #1: Online betting will lead to a rise in addiction

I’ll just let you read their words for this one.

“Studies from the United Kingdom show that online gaming is particularly ripe for addictive behavior, suggesting far more of that $500 million will be needed for problematic gaming prevention and treatment than backers are letting on.”

For some missing context, the California Legislative Analyst Office said the proposal could result in $500 million in new annual tax revenue for the state. PlayCA projected that number to be closer to $200 million.

However, the actual amount is irrelevant to the argument.

Well, actually…

California sports bettingThis is my third “Well, actually…” column. It’s also the third time I’m forced to rebut this argument. And it’s getting old because it’s simply not true.

Why are they using a study from a different country? There are countless states in this one that allow online betting.

Do you know how many of those states report any significant increase in problem gambling? Zero.

According to the Reason Foundation, gambling addiction in the U.S. flatlined in 1970. In 1970, there were barely any legal forms of gambling outside of Las Vegas. Atlantic City didn’t even get casinos until 1978.

If problem gambling rates didn’t rise during that time frame, it doesn’t make any sense that California would see a spike from the passage of Prop 27.

Bad argument #2: The new regulatory body would have too many people in it

Their final argument against the initiative is that there are “22 pages of unintelligible legalese.” But the example they chose to harp on was the size of the new regulatory body.

“Among the potential landmines buried in its text is the creation of an entirely new 17-member oversight committee to regulate online gaming. Why are California’s existing regulatory bodies not good enough to handle online gaming? Is an aberrantly large 17-member commission really necessary, or does it simply offer more opportunities for the industry to try to place cronies in positions of power?”

Well, actually…

Why are California’s existing regulatory bodies not good enough to handle online gaming? Well, because they’ve never had any experience with the differences between the online and brick-and-mortar markets.

Furthermore, let’s take the gambling aspect out of this and look at it from a labor perspective. You work for a company and have a set of responsibilities. The company then expands into other areas you don’t have any experience with and puts that work on your plate.

Would the Chronicle’s editorial board think the company made a good decision? Of course not. Would they think it’s fair to that employee? Not a chance.

So why is it different when that hypothetical company is the state of California?

Regarding their second critique: Yes, a 17-member regulatory board is rather large. Especially since the internet gaming aspect should streamline some of their workloads.

Therefore, it’s reasonable to have skepticism about the motives behind its size. It’s probably even a good thing they question why.

But don’t just spread fear about the board. Instead, just stay on top of the story. Report on who fills those seats, what their background is, and how they could affect the market.

They would do the same thing if a bunch of former Goldman Sachs employees infiltrated the U.S. Treasury Department, right?

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Steven Schult

Steve serves as managing editor for PlayCA and a handful of other sites across Catena Media. The New York native is a veteran of the gambling world. He started covering high-stakes tournaments in 2009 for some of poker's most prominent media outlets before adding the broader US gaming market to his beat in 2018.

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