Seven US Operators Drive Another California Sports Betting Initiative

As many as seven US sportsbooks – including FanDuel, DraftKings, and BetMGM – announced Tuesday an initiative to bring sports betting to California. Besides these three largest operators in the nation, Bally’s Fanatics Betting & Gaming, and Penn National, and Wynn have joined together to bring multiple sports betting questions in the Golden State on the ballot in 2022.

If the measure acquires the required signatures, it will be the third on the mid-term ballot. So far, only a tribal initiative has been approved that would legalize retail betting only at tribal casinos and four horse racetracks. Last month, a coalition of Californian cities filed an initiative that would regulate statewide mobile betting.

If legalized mobile betting comes to California, with a population of nearly 40 million, it will likely become the biggest sports betting state by handle in the United States.

What’s in the Latest California Sports Betting Initiative?

The latest initiative calls for California gambling to include regulated mobile sports betting, with a view to supporting mental health services and homeless people.

The initiative titled “California Solutions to Homelessness and Mental Health Support Act” seeks to break the tribal monopoly in the Golden State. FanDuel, DraftKings, and BetMGM are also collaborating on an initiative to break the Seminole monopoly over Florida sports betting.

However, the recent sports betting initiatives – first moved by a coalition of cities and now by a group of seven leading sportsbooks – are resented by local tribes. Eighteen Californian tribes have recently opposed California mobile sports betting, backing a ballot initiative that would legalize retail betting only.

What Did the Group of 7 Operators Say?

In a joint statement, the group of operators said California – home to many of the world’s most advanced technology companies – should no longer be stuck with outdated, unsafe, and untaxed sports betting options.

The latest initiative will ensure a comprehensive licensing process, creating a competitive marketplace while ensuring the best products and experience for the state consumers. The statement further noted that the future of mobile sports betting is active across the country, arguing why California should be left behind.

Politico first broke the sportsbook operators’ initiative, saying they plan to file the request with the State Attorney General’s office Tuesday. A spokesperson said the companies would spend as much as $100 million on the “California Solutions to Homelessness and Mental Health Support Act.”

Some Tribes Might Be on Board with Operators’ Initiative

However, the initiative would be “complementary” to the tribal initiative. Campaign Manager Dana Williamson said a portion of the measure’s revenue is earmarked to uplifting tribal communities.

Williamson noted any mobile sports betting operator seeking to enter California sports betting must partner with a state tribe.

The statement suggests that some tribes could be on board as the operator-tribe partnership in California for licensing – like many legal sports betting states – could generate revenue for both partners.

What Changes Can the Operator’s Proposal Bring?

The latest ballot initiative will reportedly create an open and competitive marketplace. It seeks to legalize online sports betting only, allowing for betting on professional, college, and amateur sports, levying a 10% tax rate – the same percentage tribal initiative proposed for retail sportsbooks.

However, the cities-led proposal would levy all kinds of sports betting at 25%.

The operators-led initiative does not limit the number of sportsbook licenses. But it’ll automatically be limited by the number of tribal casinos whose partnership will be required to launch in Golden State. Over 100 federally recognized tribes operate as many as 70 casinos in the largest US state by population.

Digital-Only Proposal Allows Peaceful Co-Existence

As the operator’s initiative is for digital-only licenses, it should not be hostile to gaming tribes, which can peacefully co-exist with the mobile operators. The latest initiative allows for the tribes and four horse tracks to have exclusive retail betting, while the operators will be looking for statewide mobile betting.

If approved, the initiative will become the first in the nation’s history to earmark funds for homeless people and mental health programs.

The first step toward getting on the ballot was Tuesday’s filing of an official request with the AG’s office. Now the operators must collect 997,139 signatures to get the initiative on the ballot. They are likely to get that number before the end of this year.

A 30-day public comment period will open once the proposal is submitted. After the Department of Finance and the Legislative Analyst’s Office concluded a 50-day study, the proposal will be dispatched to the Secretary of State.

The proponents can begin collecting signatures to qualify the proposal for the ballot by June 30, 2022, in order for it to be put before the Nov. 2022 referendum.