CALIFORNIA, USA — Both Proposition 26 and Proposition 27 would expand legal gambling in California. For this story, we'll be focusing on Prop 26, but Prop 27 will have its own breakdown HERE.
To be clear, this isn't an "either or" situation. People can vote however they want on either one, but there could be court battles if both end up passing. They both focus on changing the constitution to legalize sports betting in California.
What would Prop 26 do?
Prop. 26 would allow tribal casinos and the state’s four horse race tracks to offer in-person sports betting. At race tracks, sports betting could only be offered to people 21 or older. Age restrictions on sports betting at tribal casinos would need to be negotiated by California’s governor and each tribe, and written into each tribe’s compact with the state.
The proposition would also allow tribal casinos to begin offering roulette and dice games, including craps.
It taxes sports bets placed at horse race tracks. It doesn’t tax tribes, which are sovereign nations, but it requires tribes to reimburse the state for the cost of regulating sports betting.
The proposition also creates a new way of enforcing some gaming laws, allowing anyone to bring a lawsuit if they believe the laws are being violated and the state Justice Department declines to act. Any penalty and settlement money that results would go to the state.
State analysts say the proposition could generate as much as tens of millions annually for the state. It’s difficult to know the exact amount for a few reasons. New tribal-state compacts might require tribes to pay more to local governments, for example, and it’s unclear how much money will result from the new private lawsuits. The revenue would first be spent on education spending commitments and regulatory costs. If there’s any money left over, it would go to the state’s discretionary fund, as well as to problem gaming and mental health research, and the enforcement of gaming rules.
Why is it on the ballot?
Tribes have long had the exclusive right to offer certain forms of gambling in California, including slot machines and certain card games, such as 21 and baccarat. But sports betting — besides horse racing — isn’t legal in California currently.
Since the U.S. Supreme Court ruled that states could legalize sports betting in 2018, 35 states plus Washington D.C. have made the leap. In California, lawmakers tried to negotiate a deal on sports betting in 2020, but weren’t able to work it out in time to get a measure on the ballot.
Elsewhere it’s proven popular — and lucrative. Americans bet more than $57 billion on sports in 2021. The massive expansion has also concerned advocates, who say that gambling addiction will increase, and that research into the long-term effects of legalizing sports betting has fallen short.
Two different sports betting measures made it onto the ballot for the 2022 election. Prop. 27 would allow online sports betting across the state, while Prop. 26 would allow in-person sports betting only at tribal casinos and horse race tracks. If both pass, both could go into effect, but in all likelihood a court would decide.
Arguments
For: Supporters argue it will increase tribal self-sufficiency by bringing more business to tribal casinos. Tribal casinos create jobs, and help tribes pay for services like health care and education. Supporters also say it will protect against underage gambling by requiring people to be physically present to make bets, and by prohibiting advertising to people under 21. They also say it will also generate money for the state of California.
Against: Opponents argue the new gaming law enforcement mechanism will be used by tribal casinos to sue competing card rooms and drive card rooms out of business. If that happens, they argue, it will lead to lost jobs and tax revenue, often in communities of color. Some casinos allow 18 year olds to gamble, so opponents argue the initiative could lead young people to develop gambling addictions. They also argue it will revive the shrinking horse racing industry, which they say endangers horses.
Polling Data
Viewing polling data gathered by CalMatters on the proposition below.
This is an abridged version of the full story, which is available at CALmatters.org—a nonprofit, nonpartisan media venture explaining California policies and politics.
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