The nation’s three biggest California, which, with a population approaching 40 million, will likely be the biggest sports betting state by handle in America.
If enough signatures are gathered to place it before voters, the initiative would be the third on the mid-term ballot. So far, only one has been approved to be offered: a mobile sports betting apps.
Politico first broke the story of California’s operator initiative, saying the operators plan to file paperwork with the State Attorney General’s Office Tuesday. According to Politico, the companies will pony up $100 million for the “California Solutions to Homelessness and Mental Health Act,” which would be “complementary” to the tribal initiative.
“Any online sports betting operator seeking to participate in the California marketplace must do so by partnering with a California tribe,” Campaign Manager Dana Williamson told Politico. “A portion of the measure’s revenue is dedicated to uplifting Tribal communities.”
Open, competitive marketplace 5q5s5w
According to an industry source, the proposal would create an open, competitive marketplace. If approved, it would legalize mobile/internet wagering only; would allow for wagering on professional, college, and amateur sports; would not mandate the use of official league data. and would set a 10% tax rate. The tribal initiative would tax retail sportsbooks at horse tracks at 10% as well, while the proposal put forth by the cities would tax all wagering at 25%.
California tribes, cities share different sports-betting views https://t.co/cMs1gZFHW3 via @reviewjournal
— Joely Proudfit, Ph.D. (@Nativeprof) August 30, 2021
The operators’ proposal does not cap the number of licenses, though since any digital wagering would have to be tied to a tribal casino, there is a de facto cap. There are more than 100 federally recognized tribes operating about 70 casinos in California.
The operators are proposing some of the highest fees in the U.S.: a $100 million initial fee (good for five years) for big-name operators who partner with tribes and $10 million for tribes who go it alone. Annual renewals would be $10 million for operators running their own platforms and $1 million for tribal-branded platforms.
The proposal also puts strict guidelines around who could qualify as a sports betting operator. According to a source, there would be two pathways:
- Any qualified gaming entity that already offers digital sports betting in at least 10 U.S. jurisdictions OR operates 12 casinos in the U.S. and has five live digital platforms in the U.S. could partner with a tribe.
- Any gaming tribe could directly offer digital sports betting. In this scenario, the tribe would contract with a back-end operator to run the platform, but it would be branded by the tribe.
Because the proposal is for digital only, it is not technically in conflict with the tribal proposal, meaning both could . In that scenario, the tribes and four horse tracks would be the only venues for retail wagering, while digital betting would be available across the state.
“We’ve always wanted to work with the tribes, and we tried very hard to be on their initiative,” an industry source said. “This is what we always wanted.”
The operators’ proposal does not address where retail sportsbooks could be located. To that end, card rooms and professional sports venues — which are left out of the tribal initiative and are included in the cities’ proposal — are not mentioned.
About 1 million signatures will be needed 146a5y
While BetMGM, DraftKings, and FanDuel will take the lead on the initiative, BetRivers.
Update on our @POLITICO scoop — These gambling giants also backing 2022 ballot effort for legalized sports betting in CA:
Bally’s Interactive
BetMGM
DraftKings
Fanatics Betting & Gaming
FanDuel
Penn National/Barstool Sportsbook
Wynn ResortsSports https://t.co/Kn2XgEMQ9l— Carla ‘Bluechecked’ Marinucci (@cmarinucci) August 31, 2021
ing the initiative could be a little trickier for companies that operate retail sportsbooks, like MGM, Caesars, or Penn National. Caesars operates a handful of tribal casinos under its Harrah’s brand, while MGM has at least one physical casino in Northern California.
If it es, the referendum would become the first in the U.S. to earmark funds for homelessness and mental health programs.
“California is one of the most important sports betting markets in the world, and BetMGM is committed to bringing legal, regulated mobile sports betting to the state,” BetMGM CEO Adam Greenblatt said in a statement to the media Tuesday morning. “As we’ve seen in states where BetMGM currently operates, regulated sports betting brings in tax revenue that s important causes – in this case finding solutions for homelessness and mental health .”
The first step toward getting on the ballot is Tuesday’s filing of a “Request for a Circulating Title and Summary” with the AG’s office. After that, operators will need to collect 997,139 signatures to get on the ballot. It’s likely that the operators will be able to begin collecting signatures before the end of 2021.
Once the proposal is filed, it will open for a 30-day public comment period. The Department of Finance and the Legislative Analyst’s Office have 50 days to craft a study exploring what costs or revenues the proposal would generate for the state. Once those tasks are complete, the proposal will be sent to the Secretary of State, and those backing the petition can begin collecting signatures to qualify the proposal for the ballot. According to the Secretary of State website, any initiatives for the November 2022 ballot must qualify by June 30, 2022.
