Approval: No on Propositions 26 and 27. Legalizing sports betting puts all odds against Californians
Since the United States Supreme Court ruled in 2018 that states can allow sports bettinglegal gambling has exploded across America, leaving predictable problems in its wake.
Many of the over 30 states that allow sports betting — including Michigan, Virginia and Connecticut — have seen spikes in demand for services to help people with gambling addictions, often without resources to respond appropriately. Online gambling has become common among high school students, although the legal betting age ranges from 18 to 21 depending on the state. And the amount of money some Americans are now spending on sports betting should raise concerns about their financial health. In just one month last year, sports gamblers bet $7 billion – a multiplication by 20 for three years earlier. It is money that they do not spend in other sectors of the economy, or worse, money that they borrowed that they might not be able to repay.
If the companies that own betting platforms and the tribes that run casinos are successful, California will be the next state to adopt this insane scheme. Voters should prevent that from happening by rejecting Proposition 26 and Proposition 27 in the November 8 ballot. These two competing measures would allow sports betting in California, albeit in different ways, and both would usher in a disturbing expansion of gambling.
Proposition 26, backed by several Native American tribes that run casinos, including Pechanga and Agua Caliente, would allow in-person sports betting at four private racetracks and at tribal casinos that enter into agreements with the state. It would also expand the types of games allowed in Indian casinos to include roulette and craps.
Proposition 27, backed by several betting platforms including DraftKings and FanDuel, would allow online sports betting on sites run by California tribes or large corporate partners with them. It would also allow betting on award shows and other non-sporting competitions.
It would essentially turn every mobile phone, tablet and computer into a legal casino where bets could be placed with just a few clicks of an app.
The ubiquity of technology and the familiarity many people feel with sports can make online sports betting more addictive than other game types, experts have found. First, there’s the ease of pulling a gaming device out of your pocket versus the hassle of getting to a casino. Then there’s the fact that people who follow teams tend to believe they have superior knowledge that compels them to bet more than they would at a card table or slot machine. A study comparing people who bet on sports with people who place other types of bets “found that sports bettors are at a greater risk of problem gambling”, according to a study published in the Journal of Gambling Studies.
Proposition 26 avoids the problems associated with Internet gambling, but has other problems. A provision that makes it easier for cardrooms to sue is the latest salvo in a long-running dispute between Indian tribes and cardroom operators over who has the right to offer a certain kind of game. Advocates of the humane treatment of animals fear that by allowing sports betting at racetracks, Proposition 26 will bolster a cruel industry that enjoys declining public support.
Although Proposition 26 aligns with California voters’ past support for allowing gambling on tribal lands, the measure amounts to a toxic brew of corporate interests designed not just to enrich the backers, but also to fend off their competitors. If California ever decides to embrace sports betting, it should be in as unbiased a setting as possible, not one that so blatantly picks winners and losers.
One argument of proponents of both measures is that sports betting happens everywhere, whether legal or not, so California would be better off regulating and taxing the practice rather than relegating it to the shadows. Legalization will reduce the black market, they say, and create a source of tax revenue for the state.
That sounds good, but the experience of legalizing cannabis in California shows that there is reason to be skeptical. The same arguments were made in 2016, when voters endorsed recreational marijuana. But in the six years that followed, the black market continued to thrive. About three-quarters of the weed sold in California is illegal, and legal sellers say all the taxes they face make it difficult to compete with illicit drug dealers.
Although Proposition 27 aims to reduce illegal betting by forcing people who use illegal websites to pay penalties and creating a new enforcement unit at the state Department of Justice, an expert on the program UCLA gambling studies said it was not convinced it would significantly reduce the black market. Other states that have allowed online sports betting still face many unregulated online bets, said professor of psychiatry Timothy Fongand he doesn’t think it’s going to go away in California.
Continued activity on the black market could mean that taxpayer money generated from sports betting is more of a trickle than a gush. Again, this reminds us of the campaign to legalize cannabis, which promised that taxing weed would provide many new funds for youth aid and drug prevention programs. In fact, tax revenues have arrive lower than expected and the just state lower tax rates because the legal market is such a mess.
The amount of new taxes that would be generated under Proposition 26 is uncertain, the nonpartisan legislative analyst says, “but could reach tens of millions of dollars a year.” It would be spent on schools, gambling addiction programs, sports betting enforcement, and the state’s general fund. Racetracks that offer sports betting would pay the state 10% of wagers made, while tribes would negotiate their tax payments through agreements with the state.
Proposition 27 is likely to generate more tax revenue — potentially up to $500 million a year, according to the legislative analyst — but the figure is also uncertain. Tribes and companies that offer sports betting would pay a 10% tax on bets made. They would also pay licensing fees set at $10 million for tribes and $100 million for businesses. The taxes generated would first serve to regulate the sports betting industry. The remaining funds would mainly be used fight against homelessness, by subsidizing, for example, affordable housing, emergency shelters and navigation centres. Part of the funding – 15% – would go to tribes not involved in online sports betting.
Voters are understandably upset by the large number of Californians who have no roof over their heads. But don’t be fooled into thinking Proposition 27 will solve homelessness. As the state budget overflowed with surplus dollars over the past two years, California lawmakers committed $13.5 billion to provide shelter and services to homeless people. Sports betting taxes would provide an ongoing source of funding, but the amount may not be a game-changer.
Worse still, it is possible that the legalization of an addictive form of gambling would lead more people to the shortage and need for government services, which would reduce the real benefits of the state. “Online sports betting could make it more difficult for people with gambling addictions to avoid placing bets,” said the legislative analyst wrote. “It could increase the number of people who may need government help.”
As sports betting has become more socially accepted in recent years, some might view Propositions 26 and 27 as indicative of a cultural shift. Maybe. But it is an evolution driven by greed.
The standardization of sports betting has been encouraged by betting platforms, sports leagues and media companies, which see a profit in convincing people to gamble their money. This is why gambling interests are pay hundreds of millions of dollars in Propositions 26 and 27 — shattering past spending records on state ballot measures.
If both measures are passed, it is possible that both will come into force, Proposition 26 governing the in-person sports betting industry and Proposition 27 governing the online industry. However, there would likely be a lengthy legal battle over whether California can handle two different sports betting systems.
California doesn’t need more gambling or more trials. Propositions 26 and 27 present more risks than advantages, which makes them both a bad bet. Vote no.