Fact Check Ads for California Sports Betting Propositions

Chances are one of the many advertisements for the legalization of sports betting has caught your eye, given their ubiquity on television, websites, and billboards across California.

You would, however, be forgiven for not having a clear idea of ​​what either initiative do. Some the ads do not mention sports betting at allpotentially leaving Californians in the dark about exactly what they are being asked to decide.

The ads are “oversimplified to the point of not being completely accurate,” said Mary Beth Moylan, associate dean and professor at the University of the Pacific’s McGeorge School of Law, who oversees a journal for California initiatives.

Proposition 26 would legalize sports betting at tribal casinos and at California’s four private racetracks. It is paid for by a dozen Native American tribes. It would also allow tribes to start offering roulette and dice games.

Proposal 27 would legalize online sports betting statewide and is paid for by a handful of major gaming companies. Under Proposition 27, gaming companies and tribes could offer online and mobile sports betting.

But how truthful are the ads? Here’s what you need to know about some of the oft-repeated claims.

To claim: “Tribal leaders support the Solutions Act (Prop 27)”

The leaders of three of California’s 110 Federally Recognized Native American Tribes – Santa Rosa Rancheria Tachi Yokut Tribe, Middletown Rancheria of the Pomo Indians and Big Valley Band of the Pomo Indians — support the proposition of online sports betting.

President Jose “Moke” Simon III of the Pomo Indians’ Middletown Racheria said in an interview with CalMatters that he supports Proposition 27 because it gives the tribe the ability to bring in more funds. The tribe is rural and has a casino about an hour’s drive north of Napa.

“Our brick and mortar (casino) is limited by our area where we are located and mobile sports betting would allow us to reach a much wider audience,” said Simon III.

But, more than 50 tribes and tribal organizations oppose Proposition 27. They say it would disrupt gambling which has operated on tribal lands for decades and drive business away from Indian casinos.

True?

It is true that a few tribal leaders support Proposition 27, but many more tribal leaders oppose the measure.

Affirmation: Proposal 27″supports all California tribes, including financially disadvantaged tribes that do not have large casinos”

It is true that each tribe would see some sort of benefit from Proposition 27. Tribes that have pacts with the State of California that allow them to offer gambling could create their own sports betting app or website mobiles. Or, they could partner with a gaming company that wants to offer online sports betting in California.

The initiative also taxes online sports betting and sets aside 15% of the money for tribes who are not involved in sports betting. But, since it’s hard to know exactly how many people will place bets, how many companies and tribes will want to offer sports betting, or how many tax deductions companies will take, it’s impossible to know exactly how much money it will cost. .

True?

Every tribe has the potential to benefit from Proposition 27, yes. It is unclear to what extent each tribe would benefit.

Claim: Proposition 27 provides “hundreds of millions of dollars in annual funding to finally fight homelessness in California”

This one is a bit complicated. It’s possible the proposal will generate hundreds of millions of dollars a year to address homelessness, but that’s not guaranteed.

Each election cycle, the Office of the Nonpartisan Legislative Analyst examine each proposal and estimates the new costs and revenues that each could create for the state. They found that Proposition 27, via taxes and fees, would increase funds paid to the state by “probably hundreds of millions of dollars, but probably no more than $500 million a year.” The bureau did not include a lower estimate.

First, the money would be used to cover new costs related to the regulation of sports betting, which analysts believe could reach tens of millions of dollars per year.

Of the remaining money, 15% would go to tribes that do not participate in sports betting and 85% would go to homelessness solutions. The legislator could also choose to direct part of it towards the treatment of gambling addiction.

True?

It’s possible that Proposition 27 will end up generating hundreds of millions of dollars a year for the state to address homelessness. But if taxes and fees end up bringing in $100 million or $200 million a year — instead of $500 million — then it won’t. Also, if the Legislative Assembly decided to allocate a large portion to gambling addiction treatment, it would reduce the amount spent on homelessness solutions.

How does this money fit into what California is already spending to address homelessness? California spent $7.2 billion on homelessness-related programs in the 2021-22 budget year, according to state analysts. If Proposition 27 added, say, $300 million, that would translate to a 4% increase.

To claim: “90% of the profits [of Prop. 27] go to out-of-state companies”

This assertion is based on the fact that Proposition 27 taxes online sports betting at a rate of 10%. So the question is: where exactly will the remaining 90% go? The truth is that it is impossible to know precisely.

If Proposition 27 passes, gaming companies headquartered in other states will want to get in on the action, because they are the ones funding the measure. The companies funding the initiative own some of the most popular online sports betting platforms: FanDuel controls 31% of the US market, followed by DraftKings with 26% and BetMGM with 16%, according to Eilers & Krejcik, a specialist research firm. in games. It is therefore reasonable to expect that their platforms will also be popular in California.

Does this mean that these companies would reap all the benefits? The initiative also allows California tribes to offer mobile and online sports betting themselves. If the tribes choose to do so, they will earn a portion of the profits.

Gaming companies headquartered in other states might also have to spend money in California to do business here. For example, businesses will need to enter into an agreement with a tribe in order to operate legally, and that agreement could include some kind of payment or revenue sharing. Gaming companies may also need to pay employees or contractors in California to get their business started here.

True?

The companies funding the campaign are headquartered outside of California. It is impossible to know at this time what percentage of the profits would actually go to them.

Affirmation: The tribes are “pushing Prop 26 to secure a virtual monopoly on all gaming in California by giving private litigators the Attorney General’s power to bury their licensed competitors with frivolous lawsuits.”

This argument contains several claims. It’s based on part of Proposition 26 which allows anyone (or organization) who thinks someone else is violating California gambling laws – by offering illegal gambling, for example – to take legal action. Before they can take legal action, however, they would first have to ask the Department of Justice to act, and could only move forward if the Department fails to act, or if the Department Is file a case and the court rejects the case but allows it to be re-filed. It’s a complicated legal thing. But this is not a totally new idea; California used a similar process for enforcing labor laws.

True?

Buckle up.

Are tribes trying to “ensure a virtual monopoly?” In 2000, Californians voted for allow tribes to offer certain forms of gambling – including casino-backed slots and card games – that no other entity in California is licensed to offer. Proposition 26 would allow tribes to begin offering roulette and dice games, which no other entity can offer, as long as they renegotiate their agreement with the state. Thus, the initiative would extend the exclusive rights of tribes to offer certain forms of gambling.

Would the new prosecution process give “private litigators the power of the Attorney General to bury their gambling hall-holding competitors with frivolous lawsuits?” This would allow private lawyers to bring cases that currently fall under the purview of government lawyers. The Proposition 26 campaign has made no secret of the fact that the tribes intend to sue game roomsthat compete with tribal casinos.

The lawsuit process was “designed to settle the House Banking Gaming Act that governs card rooms,” Kathy Fairbanks, spokeswoman for the Yes on 26 campaign, said in a recent debate. Rules about exactly how cardrooms are allowed to offer certain games have long been a source of contention between cardrooms and tribes. The tribes don’t have standing to challenge them in court, Fairbanks said, so they want a way to do that.

The idea that it would unlock a slew of baseless lawsuits, however, assumes the courts don’t already have a process in place to handle frivolous lawsuits, said Moylan, the law professor. Courts can sanction lawyers who bring frivolous lawsuits, for example, Moylan said.