A California advocacy group backed and funded by major online gambling operators DraftKings, BetMGM, FanDuel, Bally’s Interactive, WynnBET, among others, announced on Monday that it had collected enough signatures that would qualify a measure on the November ballot that would allow gaming companies and Native American tribes to provide online sports betting across the state. The tax revenue would address homelessness and mental health in California.
Californians for Solutions to Homelessness and Mental Health Support said it collected about 1.6 million signatures for the measure, more than the roughly 1.1 million signatures required to authorize a ballot measure in the general election. Counties must now verify the number of signatures, and the California Secretary of State has until June 30 to formally qualify the measure.
“The initiative achieves this by licensing, tightly regulating, and taxing online sports betting conducted in partnership with California’s Tribes – following nearly half the country in creating a safe and responsible online sports betting marketplace,” the group said in a press release.
The initiative would authorize a gaming tribe, an online sports betting platform with an operating agreement with a gaming tribe, or a qualified gaming company with a market access agreement with a gaming tribe to operate online sports betting for individuals 21 years of age or older in the state but outside of Indian lands. Qualified gaming companies would be required to be licensed to offer online sports betting in at least 10 states or territories or licensed to offer online sports betting in at least five states or territories and operate at least 12 casinos. These requirements have raised concerns that they could effectively block smaller gaming companies and startups from operating in the state.
After deducting regulatory costs, 85% of the revenue from licensing fees, renewals, and sports betting taxes would be allocated to the California Solutions to Homelessness to the Mental Health Support Account and 15% to the Tribal Economic Development Account. The amendment would take effect on January 1, 2023.
Californians for Solutions to Homelessness and Mental Health Support reported over $100 million in contributions according to its latest campaign finance filings. The top donors to the committee included BetMGM LLC ($16.7 million), FanDuel Sportsbook ($16.7 million), and DraftKings ($16.7 million).
City leaders in California have supported the ballot measure, including mayors from Oakland, Fresno and Sacramento. However, the Coalition for Safe, Responsible Gaming, which is made up of several state tribes, businesses and homeless advocacy organizations, have opposed the proposed ballot measure, saying it would increase the risk of problem gambling and underage gambling. The Coalition also pointed to an April 19 poll that shows 53% of Californians oppose the measure compared to 36% in favor.
A David Binder Research poll conducted from March 28 to April 4 showed about 59% of Californians support legalizing sports betting to tackle homelessness, compared to 28% who oppose it. California’s sports betting legalization, called to be the next big market in the US, would be supported by 45% of voters, while more than 1 in 5 claims to be undecided, according to a poll released late Febraury by the University of California’s Berkeley Institute of Governmental Studies in collaboration with the Los Angeles Times.
Fresno Mayor Jerry Dyer said the ballot measure would “give cities like Fresno a guaranteed funding source to address homelessness.”
“To truly solve this critical issue and give those most vulnerable among us the housing, mental health and addiction treatment they need, there must be an ongoing revenue stream,” Dyer said in a statement, as reported by The Hill. “This initiative would do just that.”
Last month, a group of California local elected officials joined California cities and officials throughout the state in opposition to the only qualified gaming initiative so far, called Tribal Sports Wagering Act, which would allow California Indian tribes to offer in-person sports wagering at tribal casinos. On the same day, the Coalition for Safe, Responsible Gaming announced that a broad coalition of California Indian tribes, civil rights organizations, homelessness advocates, faith leaders, public safety groups, and business advocates has come out in support of the Tribal Sports Wagering Act, and in strong opposition to the California Solutions to Homelessness and Mental Health Support Act.
Two California cardrooms —Hollywood Park Casino and Parkwest Casino Cordova— filed a lawsuit in the Los Angeles Superior Court in March as their second legal attempt to prevent the initiative from going to the voters, after the state’s Supreme Court refused to hear the case.
A third initiative is supported by the mayors of San Jose, Colma, Inglewood and Gardena alongside major cardroom operators, and would legalize online and in-person sports betting while also permitting licensed cardrooms to offer additional card and tile games currently limited to tribal casinos.
There is also a fourth initiative, presented last November by the San Manuel Band, the Rincon Band of Luiseño Indians, the Federated Indians of Graton Rancheria, and Wilton Rancheria, which seeks to give tribes exclusive rights for operating both in-person sports betting on tribal lands and online gambling statewide. It also promises funds to solve California’s homeless struggles as it would send 85% of tax revenue per year toward helping people secure housing. In January, it was cleared to begin collecting petition signatures for the November 2022 ballot.