A plan for California to use online sports betting revenue to fight homelessness and expand mental health services received significant bipartisan support this week.
A coalition of California mayors and organizations have banded together to back the proposal, called the California Solutions to Homelessness and Mental Health Support Act.
If approved by voters via a statewide ballot initiative in November 2022, the California sports betting initiative would pave the way for legal, regulated sports betting in the state with tax revenue earmarked to fund housing and shelter for the homeless and to expand mental health and addiction treatment services.
Online sports betting revenue used to combat crisis
The group supporting the measure includes the mayors of Fresno, Long Beach, Oakland and Sacramento.
All Home, a Bay Area organization working to alleviate poverty and homelessness, likewise backs the initiative. In addition, the San Diego-based Regional Task Force on Homelessness and the United Way of Greater Los Angeles have each added their support.
The group’s statement on Tuesday shared multiple reasons for pursuing the unique solution of using revenue from online sports betting to help fund housing solutions and provide increased mental health support for Californians.
For example, Jerry Dyer, mayor of Fresno, noted the need to “think both creatively and long term” to address the crisis. According to Dyer, the “ongoing revenue stream” from online sports betting would help do just that and enable the funding of “long-term solutions needed to end homelessness.”
The other mayors echoed Dyer’s argument. By drawing upon online sports betting revenue, they argued, California could create a dependable method to pay for programs without increasing state taxes.
“This initiative will create a stable and reliable funding source to tackle these immense challenges,” said Sacramento Mayor Darrell Steinberg.
Representatives of the organizations also shared reasons why the initiative would benefit not just those in need, but all Californians. Tomiquia Moss, CEO and Founder of All Home, referenced how many other states had already legalized sports betting. According to Moss, California should do so as well.
“If we permit and regulate online sports betting,” said Moss, “California residents should benefit from it.”
Citing a government survey, the Sacramento Bee reported that California’s 161,000 homeless residents comprise 27% of the homeless population nationwide.
Online measure one of three potential sports betting ballot initiatives
The campaign to place the initiative on next year’s ballot has already begun in earnest. Proponents must gather nearly 1 million signatures for the petition for the initiative to appear on the ballot.
The coalition of mayors and organizations joins a number of sportsbook operators already actively supporting and funding the initiative campaign. Those operators include:
- DraftKings
- FanDuel
- BetMGM
- Bally’s Interactive
- Fanatics Betting & Gaming
- Penn National Gaming
- WynnBET
Operators would need to partner with one of more than a hundred California tribes. According to the proposal, operators would pay a $100 million initial license fee. There would be an additional cost of $10 million to renew the license every five years. The state would then tax gross gaming revenue at a 10% rate.
The proposal is actually one of three different sports betting-related initiatives that could potentially appear on the ballot.
One tribe-backed measure has already qualified. The measure would legalize retail sports betting at tribal casinos and at horse racetracks. However, it would not permit online sports betting.
With that measure, a portion of the 10% tax assessed to revenue at horse racetracks would go toward funding the state’s Department of Mental Health. The rest would go toward the state’s General Fund and Bureau for Gambling Control.
Meanwhile, a third measure backed by California cardrooms would allow both retail and online sports betting.
Comparatively, that one would impose a 15% tax rate on revenue. More than half of that would go toward helping local municipalities fund housing and mental health programs. In addition to the card rooms, professional sports franchises, racetracks, and tribes would all be eligible to participate.
