It’s DraftKings & FanDuel vs. Tribal Casinos in Battle for California’s Sports Betting Future

Memo to California voters: Prepare to be confused because you could be facing four competing ballot measures next year to legalize sports wagering.

Indian tribes that now have a monopoly on casino gambling in California are jousting for control of what could be countless billions of dollars in bets on sporting events against big online sports betting corporations, horse racing tracks, and local poker parlors.

Following a 2018 U.S. Supreme Court ruling that made sports betting legal, a number of other states have accepted it, and the major professional sports leagues, which condemned sports betting for decades, have struck deals with major online betting operations.

However, years of efforts in the California Legislature to fashion a system acceptable to all stakeholders fell short. The legislative stalemate meant – as it often does in California – a shift to the alternative arena of ballot measures.

One Ballot Measure Extends Tribal Monopoly

Major casino-owning tribes struck first with a measure that would extend their gambling monopoly to sports wagering, qualifying it for the 2022 ballot.

In reaction, three other initiatives are in the works, each of which would benefit its sponsor in some way, but it’s not certain that all will make the ballot. Although the election is a year away, the calendar for qualifying measures is fairly advanced and sponsors will have to hustle to make it – which means spending millions of dollars for professional signature-gathering campaigns.

The tribal measure already ticketed for the ballot would require sports wagers to be placed either in existing casinos or in locations owned by the tribes. It also would allow sports wagers at major horse racing tracks – an obvious ploy to dampen potential opposition – but would not allow online bets on sports events.

The measure, if passed, would block DraftKings and FanDuel, the two major online wagering outfits that yearn to operate in California. But it also includes a sly legal attack on the local poker parlors, which have long feuded with the casino tribes, and the cardrooms struck back with a measure of their own that would allow them to accept sports wagers.

DraftKings/FanDuel Measure Funds Homelessness Efforts

Very quickly, DraftKings and FanDuel pledged millions of dollars for a third measure that would allow them to operate in California and have drawn support from some big city mayors by promising that their proposal would provide money to deal with homelessness.

Finally, three casino-owning tribes, two of which have backed the original tribal measure, are floating a fourth measure that would allow online betting controlled by the tribes. It’s a hedge against the DraftKings-FanDuel measure because it assumes that given a choice between wagering online or driving to a casino to place a bet, betters would prefer the former.

Millions of dollars are already being spent by the sponsors of the four measures and they’ve commenced hostilities with dueling public relations campaigns in advance of what promises to be a tsunami of television and online advertising to persuade voters to choose one over the others.

Will Legislature Come up With Alternative?

It would surprise no one if hundreds of millions of dollars are spent on the campaigns next year, because the millions would be pocket-lint compared to the billions of wagering dollars that would flow through the hands of whichever interests can claim legal authority.

That said, it’s also possible that the campaigns will be short-circuited by a political deal. Those who sponsor ballot measures can remove them from the ballot if their demands are met by legislation.

Given the years of legislative stalemate on the issue, it’s difficult to see the competing interests agreeing to divvy up the pie, but it’s not an impossible resolution.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. For more columns by Walters, go to calmatters.org/commentary.