California Democratic Party Opposes Online Sports Betting Amendment Measure Prop. 27

The California Democratic Party (CADEM) announced Sunday that it opposes the online sports betting amendment ballot measure Proposition 27, one of the largest endorsements against the controversial proposition to date.

According to the Secretary of State’s office, Prop. 27 would create a constitutional amendment and allow gaming Native American tribes, online sports betting sites who have agreements with gaming tribes, or gaming companies who have agreements with gaming tribes to operate online sports betting for those 21 and older throughout the state outside of Indian lands. While online betting would include professional and collegiate sports, youth sports would be prohibited.

If passed, Prop. 27 would create the Division of Online Sports Betting Control within the California Department of Justice, who would then have authority to regulate online sports betting in California and investigate all surrounding matters. Passage would also create the California Online Sports Betting Trust Fund, which would have revenues come in from licensing fees, renewals, and the new sports betting tax. In total, 85% of the fund would go to combatting homelessness and mental health in the state with the California Solutions to Homelessness and Mental Health Support Account. The other 15% would go towards Native American tribal endeavors, such as funds going to public health, infrastructure, and education programs, through the Tribal Economic Development Account.

While mobile and in-person sports betting is currently illegal in California, passage would make it legal on January 1, 2023.

Prop 27 has become one of the more polarizing propositions on the 2022 ballot in California. Those who support it, a list which includes many homeless groups and prominent lawmakers such as Oakland Mayor Libby Schaaf of Oakland, Long Beach Mayor Robert Garcia, and Sacramento Mayor Darrell Steinberg, have noted that the expansion of gambling would bring in hundreds of millions to help combat the homeless crisis in the state.

“I’m joining my fellow mayors in endorsing this important initiative because this is an all-hands on deck moment in our fight against homelessness,” Mayor Garcia said earlier this year. “To solve California’s homelessness crisis over the long-term, we need sustainable sources of funding to house those experiencing homelessness and provide them the medical and mental health services they need. That’s what this measure provides.”

Opponents have noted that the main group supporting the Yes on Prop 27 vote, Californians for Solutions to Homelessness and Mental Health Support, is funded primarily by major betting companies such as BetMGM, FanDuel, and Draft Kings. Opponents, which include many Californian tribes who are pushing for a yes on Prop 26 which would give them a monopoly on in-person sports betting in the state along with certain racetracks, as well as some unions and ethnic Chambers of Commerce, have said that the large gaming expansion would lead to more problem gambling and issues within the state.

“Their measure would authorize the largest expansion of gambling in state history – allowing virtually anyone, anywhere, anytime to gamble,” said Barona Band of Mission Indians chairman Raymond Welch and Federated Indians of Graton Rancheria chairman Greg Sarris earlier this year. “Studies show this unprecedented access would lead to more problem gambling, addiction and crime. In fact, the National Council on Problem Gambling reports online sports bettors are up to five times more likely to develop problem gambling than other types of gamblers.”

CADEM comes out against Prop 27

CADEM, with members on both sides of the issue, finally decided Sunday where they stand after months of debate, ultimately siding against the proposition and the large influx of funds going to homeless and mental health programs. Statements from opponents specifically noted how CADEM’s support against Prop 27 would also protect Indian gaming in the state.

“By opposing Prop 27, California Democrats rejected out-of-state corporations and reaffirmed their commitment to California’s Indian tribes,” said Reid Milanovich, Tribal Chairman of the Agua Caliente Band of Cahuilla Indians, on Sunday. “Prop 27 is not a solution to anything. It would expose children to a massive expansion of gambling and turn every cell phone, gaming console, tablet and laptop into a gambling device. Prop 27 is a direct attack on tribal gaming and Indian self-reliance.”

However, experts noted that both Prop 26 and 27 have less to do with homelessness funding and Native American protections and more to do with a major issue not addressed: who gets the money from the sports betting cash cow in California.

“Right now, Californians have to go to Las Vegas or Reno or another out of state city to place a legal bet on a sports match,” explained Nevada-based gaming legal advisor Richard Monroe to the Globe on Monday. “Props 26 and 27 in California would change this greatly. Casinos here are terrified at losing business, because it really is a big chunk of casino income. Nevada alone gets tens of millions per month from casinos on sportsbooks alone. And since Californians are a huge part of Vegas tourism, it would be a big blow.”

“But in California, it’s really about money. Do tribes continue their rule on gaming in the state and get exclusive sports betting opportunities? Or can betting companies come in for it? That’s really the question here. Who would have control of sports betting there – tribes or companies? [CADEM], by siding with one side this early, is making a huge mistake, because now they are making large companies upset. They aren’t even playing it diplomatically and are ignoring many prominent Democrats who are for the proposition. It’s a mess. The endorsement is a huge misfire on their part.”

Props 26 and 27 are to be decided by voters in California on November 8, 2022 in the primary election.