Proposition 26 would allow sports betting at the four privately owned racetracks and licensed tribal casinos.
At either location — tribal casino or specific racetracks — only people over age 21 may legally bet and all bets must be made in person.
Sports betting on professional, college, or amateur sports and athletic events would now be legal with limited exceptions. Betting on in-state or out-of-state games California college teams play would remain illegal, except during tournament play, and betting on high school sports would remain illegal.
Racetracks would pay the state 10% of net daily sports bets after subtracting prize payments. These revenues would go into a new California Sports Wagering Fund CSWF).
Tribal casinos that choose to offer sports betting must change their compact with the state. These changes would specify the minimum age to place a bet, payments to the state and local governments, and whether tribal payments would go into the new CSWF.
Tribes also would have the opportunity to modify their compacts in order to allow roulette and games played with dice at their casinos.
If payments do not go into the new CSWF, the proposition requires tribes to at least pay the state for the cost of regulating sports betting at tribal casinos.
According to the Legislative Analyst’s Office, the “CSWF revenues must be considered state tax revenues to calculate the minimum amount of spending on K-12 schools and community colleges each year. This means CSWF monies would first be used to help meet this required spending level on education. The proposition requires that monies next be used to support state regulatory costs. Remaining monies would be used in three ways: (1) 15% for gambling addiction and mental health programs and grants, (2) 15% for sports betting and gambling enforcement costs, and (3) 70% to the state General Fund.”
Prop 26 adds a new way to enforce certain state gambling laws. Specifically, it allows people to file a civil lawsuit in state trial courts if they believe someone is breaking these laws. This lawsuit can ask for penalties of up to $10,000 per violation. It can also ask for the court to stop the behavior.
Before these civil lawsuits may be filed, the state’s Department of Justice (DOJ) would have an opportunity to file first. If DOJ does not file a court case within 90 days or a court rejects the case DOJ filed, then individuals may take action. Penalties collected would go into the CSWF.
Arguments and financing for Prop 26
Supporters of Prop 26 argue that “California voters have stood with Indian tribes in an effort to promote Indian self-reliance by operating gaming on their own tribal lands. “Here’s why Californians should once again stand with tribes by voting yes on prop 26, supporting the qualified, in-person, tribal sports wagering act and voting no on Prop 27, opposing the corporate online gambling proposition.”
The committee Yes on 26, No on 27 had received $110 million between Jan. 1 and Sept. 24 to promote Prop 26 and oppose Prop 27. During this period, the committee spent $107 million. As of Sept. 24, its cash balance was $6.2 million.
The greatest contributions were $30 million from the Federated Indians of Graton Rancheria, $25.4 million from the Pechanga Band of Indians and $20 million from the Yocha Dehe Wintun Nation.
Against Prop 26
Prop 26’s opponents argue that it would give tribal nations almost complete control over what is potentially the largest legal sports betting market in the U.S.. As noted earlier, Prop 26 limits sports betting to in-person sportsbooks only.
But this — retail-only betting — is expected to put top online sportsbooks like FanDuel, BetMGM, and DraftKings at a disadvantage in California. And consequently, they believe retail-only betting would likely reduce state sports betting revenues because Californian bettors would not have access to lucrative mobile sportsbook options.
The Vote No on 26 Committee collected $41.5 million during the first nine months of 2022 and expended $36 million, beginning October, with a cash balance of $3.6 million. The California Commerce Club of Long Beach gave more than $10 million in the form of loans.
The Institute of Governmental Studies at the University of California, Berkeley, conducted a poll of likely voters in late September. “No” voters were greater than “Yes” voters for both Prop 26 and 27. However, Prop 26’s “Yes” voters totaled 42% and another 27% were undecided.
In general, the survey found that, “A voter’s exposure to advertisements about the two initiatives also appears to be a factor, with voters who say they have seen lots of ads about props 26 and 27 voting No by wide margins, while those who have seen little or no ads are about evenly divided.”
Two other differences found that Democrats and Independents were less likely to oppose Prop 26. Also, nearly two-thirds of female voters opposed Prop 26, but 40% of male voters chose “Yes” while 39% were “no” and 21% still undecided.
While voters older than 40 opposed both propositions, the percentage that would vote “Yes” for Prop 26 was greater in each age bracket.