The major online sportsbooks may be sensing a shift in voter sentiment against their campaign on behalf of Proposition 27, the bill that would legalize online sports betting in California.
The operators may not be panicking, but a failure to pass the bill would prevent the sportsbooks backing the legislation — which include FanDuel, DraftKings, and BetMGM — an estimated $3.5 billion in annual revenues.
A new statewide ad late released last week by the sportsbooks hammered home the ongoing message as to why Prop 27 should be supported: the proposed 10% tax on mobile wagering would raise substantial sums for underfunded homeless and health care groups in the state.
The ad also took dead aim on the rival Proposition 26, which is backed by a coalition of 50+ native tribes and would restrict all legal sports betting only to tribal casinos and four horse-racing tracks (retaining the tribes' monopoly on in-state gaming). The latest video conveyed the increasing urgency by sportsbooks to get their message across — and convince voters that they have a vested interest in voting for Proposition 27 on November 8.
"The choice between Prop 26 and 27? Let’s get real," intones the narrator. "Prop 26 means no money to fix homelessness, no enforcement oversight, and no support for disadvantaged tribes. Yikes!"
The ad also noted that Prop 27 would 'generate hundreds of millions toward priorities like new housing units in all 58 counties,' and supported non-gaming Tribes and strict audits to ensure funds go directly to solving the mentioned issues. It reflects growing concern from sportsbooks that voters may not feel sufficiently motivated to support the online sports betting legislation — unless they are given a legitimate humanitarian reason to do so.
Prop 27 attracts support from organizations supporting the homeless
Sammie Rayner, COO of Community Forward in San Francisco, an organization that is currently building a new shelter for homeless women, certainly believes that the sportsbooks' bill — whatever its main objective — will still go a long way to helping alleviate the burgeoning homeless crisis in the state.
"Prop 27 builds in funding that is long-term and really matches the size of the crisis that we're facing," Rayner said to a local news outlet last week. "If we don't have a secure pot of funds, a sustainable pot of funds to support homeless services, we're never going to end the cycle of homelessness."
The potential windfall for homeless and mental health care initiatives is a primary reason that several Democratic mayors — including Oakland’s Libby Schaaf, Long Beach’s Robert Garcia, and Sacramento’s Darrell Steinberg — in major California cities have also spoken in favor of Prop 27, plus a handful of homeless advocacy and social service groups have also endorsed the measure.
However, the latest ad may also be one of many previous TV and social media spots that are at risk of provoking a backlash among voters inundated with rival messages — or adding to public confusion over the rival bills.
On Sept. 1, Eilers & Krejcik analysts issued a research report that predicted both Props 26 and 27 would be defeated due to voter confusion, citing that the "Competing messages from tribal casinos, online sports betting operators and sports leagues, along with the back-to-back presentation of the ballot questions, are confusing voters more than sending positive messages."
Los Angeles Times editorial advises voters to vote against both bills
This weekend, however, the sportsbooks suffered another setback when the Los Angeles Times — which hosts over 40 million monthly unique visitors on its digital platforms and 1.2 million daily readers on print — urged voters to reject both Propositions 26 and 27 and maintain the status quo.
"The amount of money some Americans now blow on sports bets should raise concerns about their financial health," read the article. "In just one month last year, sports gamblers wagered $7 billion — a 20-fold increase from three years earlier. That’s money they’re not spending in other parts of the economy..."
The article cautioned that if the companies that own betting platforms — or the tribes that run casinos — come out victorious, California will be 'the next state to embrace this foolish scheme'.
"Voters should prevent that from happening by rejecting Proposition 26 and Proposition 27 on the Nov. 8 ballot," the Times piece bluntly stated.
Ad spend on betting legislation now stands at $424 million
With less than 60 days to go before voters go to the polls and decide on a variety of ballot measures, the sportsbooks are faced with a decision to go all-in and increase ad spending further — or cut their losses by scaling back their marketing efforts.
As of last week, the committees backing Prop 27 and the rival Prop 26 bill have spent a combined $424 million in their aggressive bid to legalize (or restrict) various forms of sports betting. At the current rate, it is likely that over $600 million will have been spent on dueling ads by voting day on November 8.
This shatters the previous record of $224 million in ad spend set during the lead-up to the November 2020 California ballot that saw Uber and Lyft successfully support a mesaure that exempted their drivers from state labor law.
Tribal duplicity and hypocrisy
The sportsbooks may, however, be able able to cash in on recent revelations about tribal duplicity and hypocrisy with — respect to their opposition to online sports betting.
First came a report published in the San Francisco Chronicle last week that called into question the dubious ethics of an anti-Prop 27 ad: a spot that saw Peggi Fries, executive director of Desert Sanctuary (a domestic violence support facility), look into the camera and state that Proposition 27 is "not a solution" to homelessness, that "very little is left for the homeless," and "don’t let corporations exploit homelessness to pad their profits."
This wouldn't be an issue until it was revealed that Desert Sanctuary had received a $50,000 donation from the San Manuel Band of Mission Indians — one of the main funders of the anti-Prop 27 campaign.
Even more damning was a subsequent article published Sunday in the Chronicle, which revealed that several native tribes, originally positioned as worried that neither Prop 26 nor 27 will pass this year, are preparing to propose an entirely new ballot measure in 2024 to legalize online sports betting in the state.
This bill would leave control of mobile wagering entirely in the hands of the tribes rather than the sportsbooks — bringing into question the motivations of the tribes right now, with respect to the real reason for voicing the current "dangers" of online sports betting.
The article quotes Brandt Iden, head of government affairs at Sportradar, as saying that the tribes are determined to protect their "exclusivity" over the state's gaming industry.
"It’s not so much about mobile sports betting as it is the tribes have said, ‘Look for years we’ve had exclusivity in California. We’ve earned that, right?" said Iden. "We don’t want the commercial operators coming into the market. We will do mobile sports betting on our terms later."
