LOS ANGELES (AP) – The most expensive election in U.S. history collapsed Tuesday as California voters overwhelmingly rejected sports betting, defeating initiatives by Indian tribes and the gaming industry.
The two groups have raised nearly $600 million in competing efforts to expand gambling and try to capture a slice of a potential billion-dollar market in the nation’s most populous state.
But voters wanted no part of that action.
Supporters and opponents of the dueling measure flooded voters with a flurry of ads about proposals that would legalize sports gambling by allowing it in tribal casinos and horse tracks or through mobile and online betting.
The money raised and spent more than doubled the record amount spent in 2020 by Uber, Lyft and other app-based ride-hailing services to prevent drivers from becoming employees eligible for benefits and job protections.
However, pre-election polls showed that both ballot measures faced an uphill battle to win a majority.
More than 30 other states allow sports betting, but gambling in California is currently limited to Native American casinos, horse tracks, card rooms and the state lottery.
Proponents of the two initiatives proposed different ways to offer sports gambling, and each touted other benefits they said would accrue to the state if their measure were approved.
Proposition 26 would allow casinos and the state’s four horse tracks to offer in-person sports betting. The initiative, funded by a coalition of tribes, would also allow roulette and craps games to be played in casinos.
A 10% tax would help pay for gambling enforcement and programs to help gambling addicts.
Proposition 27 would allow online and mobile sports betting for adults. Large gaming companies would have to partner with a tribe involved in gambling or the tribes could enter the market on their own.
The measure was supported by DraftKings, BetMGM, FanDuel — the latter is the official odds provider for The Associated Press — as well as other national sports betting operators and several tribes.
The initiative was promoted because of the funds it promised to channel through tax revenue to help the homeless, the mentally ill and poorer tribes that did not get rich from gambling.
The nonpartisan Legislative Analyst’s Office found that both initiatives would increase state revenue, but it’s not clear by how much. Proposition 26 could bring in tens of millions of dollars, while Proposition 27 could bring in hundreds of millions, the office said.
However, that income could be offset if people spend money on sports gambling instead of buying or buying lottery tickets.
Democratic Gov. Gavin Newsom has not taken a position on either proposal, but said Proposition 27 is “not a homeless initiative.”
The California Republican Party opposed both proposals. State Democrats opposed Proposition 27 but were neutral on Proposition 26. Major League Baseball supported Proposition 27.
The No on Prop 26 campaign, which is largely funded by losing card rooms, says the measure will give a few wealthy and powerful tribes a “virtual monopoly on all gaming in California.”
Committee 27 said the proposal was based on misleading promises and said the toy companies behind it “didn’t write it for the homeless, they wrote it for themselves.”
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