Although the official name for Proposition 27 is the “California Solutions to Homelessness and Mental Health Support Act,” its solutions are totally dependent upon allowing online sports betting in California. But its collection of supporters argue that Prop 27 will guarantee hundreds of millions of dollars each year to fight homelessness and fund mental health treatment in California.
The purpose of Prop 27 is to make online sports betting over the internet and mobile devices legal in California. It would be limited to individuals older than age 21 who are not on tribal lands. The proposition allows bets on athletic events (such as football games) and some non-athletic events (such as awards shows and video game competitions). However, it bans bets on certain other events such as high school games and elections.
In essence, Prop 27 would allow major sportsbooks operators to partner with tribes in the state to offer mobile sports betting online and through app-based platforms similar to those apps already available from DraftKings, BetMGM and FanDuel in other states.
Future sports betting would not be limited to presence on tribal lands. Computers or mobile devices at home, a coffee shop, a car or anywhere would be where one could place a sports wager.
Consequently, major sportsbooks such as FanDuel, BetMGM and DraftKings, as well as some non-gaming tribes, are the major sponsors and financers of Prop 27.
However, if Prop 27 were passed it would provide substantial benefits to homelessness and mental health programs. After payment to winning betters, prizes and federal taxes, sports betting entities would pay 10% of net revenue to the state.
These new funds would go to a new California Online Sports Betting Trust Fund (COSBTF). This fund would first be used to cover the state’s new regulatory costs. The rest would have two major purposes.
Homelessness and gambling addiction programs would receive 85% of the annual funding. The purpose would provide money for homelessness at the local level. The remaining 15% would be allocated to tribes not involved in online sports betting. These tribes could use these funds for tribal government, health, economic development or other purposes.
Prop 27 acknowledges the California Constitution’s requirements for K-12 funding based on annual total revenues. So, the COSBTF revenue would be exempt from state spending limits and minimum education spending levels.
The measure specifies no more than 40% of that money may be used for interim housing. Monies would be distributed to cities and other jurisdictions in accordance with California law.
“California needs to think big if we are going to be serious about tackling homelessness, and this initiative does just that,” Elise Buik, president and CEO of the United Way of Greater Los Angeles, said in a statement. “It could provide hundreds of millions each year in funding for proven solutions that help people experiencing homelessness come off the streets and into housing with supportive services.”
Since Prop 27 allows the major online gambling companies into California gambling options, many opponents argue that it will be a negative consequence for tribal casinos. “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.”
But supporters point to the 15% funding to help nongaming tribes.
Sports betting would include Major League Baseball (MLB) games. In August, MLB issued a statement in support of Prop 27. “As legalized sports betting continues to expand across the country, [MLB] remains committed to protecting the integrity of its games and creating a safe experience for fans who wish to wager on those games.
“Proposition 27 — the only measure on California’s upcoming ballot that would authorize and regulate online sports betting — includes strong integrity provisions designed to help MLB carry out those commitments.”
The statement then offers three examples of steps to protect MLB. The first was requiring sportsbook operators to notify leagues of suspicious wagering activity.
There is plenty of opposition to the initiative as well. The Los Angeles Times editorial board warns Californians about the addictive dangers of mobile betting, and the San Francisco Chronicle questions the legitimacy of Prop 27’s tie to the state’s homelessness issue.
