California Democratic Party Votes Against Online Sports Betting Initiative Ahead of November Ballot

On Sunday, the California Democratic Party voted to join the growing group of opposition to Proposition 27, the online sports wagering initiative presented by seven national online gaming companies, including DraftKings, FanDuel, and BetMGM. While the Democratic Party supported several propositions on Sunday, they rejected Prop 27 and remained neutral on Prop 26, the tribal sports betting measure.

Democratic Party Takes a Stand

Over ten million Californians are registered to vote with the Democratic Party, which is almost twice as many Republicans in the state – this is the most significant advantage of any political party in any state. The Democratic Party controls both chambers of the California State Legislature and the governorship. It’s assumed that the party leaders’ actions will influence voters in November.

Across the state, California Democratic State Central Committees and clubs, including the California Young Democrats, have overwhelmingly voted to support Prop 26 and oppose Prop 27, according to a press release from Kathy Fairbanks of BCF Public Affairs.

Prop 26 is the “most responsible approach to authorizing sports betting in California” with “safeguards in place to prevent underage and illegal gambling. It will help create jobs and economic opportunities that support Indian self-reliance, while benefiting all Californians, generating tens of millions of dollars annually in new revenues for public schools, wildfire prevention, and other state priorities.”

Democratic Party Still Neutral on Prop 26

While the opposition to Prop 27 is good news for the Indian Tribes, it doesn’t necessarily mean the Democratic Party will be in favor of Prop 26. In the vote over the weekend, the party remained neutral on Prop 26. According to individuals who attended the Resolution Committee session on Saturday, a key issue is related to private entities taking action on what are believed to be illegal gaming activities.

Cardroom supporters have argued that their business would be endangered by tribal nations having the private right to enforcement. Representatives have insisted Prop 26 would lead to cardroom casinos being shut down, and cardrooms have remained in opposition to Prop 26 since their ballot initiative did not receive enough signatures.

Concerns Over Licensing Fees Arise

One of the most common concerns of opponents of Prop 27 has been the massive application fees for potential operators. The license fee would be $100 million for operators, and they would have to be licensed in ten or more other U.S. jurisdictions. In other words, only national brands would have market access in California, and these rules would sideline the tribes.

The proponents of Prop 27 have spoken about the hundreds of millions of dollars in potential tax revenue that would go toward interim and permanent housing. Of the 10% tax on gross gaming revenue, 85% would be earmarked for the state’s homelessness and mental health issues, and the remaining 15% would be given to tribes uninvolved in sports betting.

Prop 27 Still Surging Towards Ballot

While the lack of endorsement hurts, Prop 27 still has plenty of financial backing from significant sportsbook operators who raised around $100 million. In addition, history is on the side of Prop 27 as the California Democratic Party took positions on 11 initiatives in 2020, and their endorsed side lost seven of those races (about two-thirds).

Nathan Click, a spokesperson for the Prop 27 initiative, told that “Californians across the political spectrum support our measure because it’s the only one that provides hundreds of millions of dollars in solutions to homelessness, mental health, and addiction, and it’s the only one that supports small and disadvantaged tribes.”

In May, the initiative received 1.6 million signatures, the necessary number to appear on the ballot in November. Under Prop 27, online sports betting would begin in California by August 2023. As we near what will be a pivotal election for the future of sports betting in the state, we will keep you apprised of all the latest news.