Voters in California are weeks away from deciding if the state will have sports betting via Prop-26, or Prop-27, or if they will reject both. To clear up some of the confusion around the two competing bills, The Sacramento Bee fact-checked claims made by either side.
Today, the state has 66 tribal casinos, 84 card rooms, 33 horse racing facilities and 23,000 stores selling lottery tickets. To add sports betting, advocates for and against each measure have raised a record total of $470m for their marketing campaigns.
The expenses are high because the stakes are high. According to one analysis by PlayCA.com, California sports betting could generate up to $30bn in sports wagers per year and around $300m in annual state taxes.
Both parties hope to win by focusing their ads on the philanthropic aspects of their respective bills. This can be seen by the first TV spot made by the ‘Yes on 27’ campaign, which did not mention gambling a single time, instead focusing on how Prop-27 proposes to tackle homelessness and mental health issues through sports betting tax revenue.
The Sacramento Bee raised the question of whether the homelessness claims made during the campaign are accurate, along with many other fact-checks.
EVALUATING PROP-27 CLAIMS
The newspaper rated Prop-27’s claim that: ‘tax revenue will create permanent solutions for homelessness, addiction and mental health’ as false. It said that the bill would generate hundreds of millions in state revenue, but not more than $500m annually.
The state already spends billions on homelessness – over $3bn earmarked for this year and $4bn spent last year – making more cash an unconvincing ‘solution.’ The promise of long-term funding has failed to generate widespread support among California’s homeless service providers and low-income housing builders.
A second claim from Prop-27 advocates is that: ‘all Tribes will benefit, including small rural disadvantaged Tribes that don’t own casinos.’ The Sacramento newspaper deemed this statement to be ‘mostly false.’
Californian Tribes that don’t have casinos, or operate small ones, already receive nearly $150m each year from larger, thriving Tribal casinos through the Indian Gaming Revenue Sharing Trust Fund. Aside from the two Tribes that support Prop-27 (Big Valley Rancheria and Middleton Rancheria Pomo) a coalition of 38 Tribes opposes it.
Most Tribal leaders want to avoid the loss of a near-monopoly on gambling in California, which has become an essential source of revenue for Indian Tribes and their reservations. This explains the creation of Prop-26.
Another claim made by pro-Prop-27 advocates states ‘the measure provides strong protections to keep minors from gambling.’ The Bee evaluated this statement as ‘unclear.’
Prop-27 would create a new regulatory unit within the California Department of Justice to set licensing requirements for Tribes and regulate the kinds of bets which are allowed. This unit would be responsible for investigating illegal activities, including underage gambling. It is unclear how effective this unit would be, as online gambling would become available to every single device in the Golden State. It would prove difficult for one unit to regulate this potentially enormous problem.
EVALUATING PROP-26 CLAIMS
Prop-26 advocates say: ‘No tax revenue from Prop-27 will go to homelessness.’ The Bee has certified this claim as ‘mostly true.’
While race tracks will pay for 10% of betting profits after issuing prize payments, tribal casinos will negotiate with the officials to determine the state’s cut. Revenue could amount to tens of millions of dollars annually, but this amount will likely be offset by regulatory costs.
Of what is left, less than half will be used to meet California’s minimum spending requirement for K-12 schools and community colleges. The rest, which could be paltry after this process, would go into the fund that finances state homelessness programs.
Another Prop-26 campaign statement is: ‘There are no benefits for ‘disadvantaged’ Tribes that don’t operate casinos.’ In this case, The Bee sides with Prop-27 supporters’ claim that it will benefit poorer Tribal casinos. California’s Tribes that don’t own and operate casinos already receive a profit share, albeit a small one, from those that do. Offering in-person sports betting at casinos would increase casino profits and indirectly benefit all Tribes.
The result of The Sacramento Bees' fact-checking effort is summarized by its description of ‘dodgy claims’ from both sides of the debate.
