Locally-owned casinos and adventitious outside gaming entities are coming head to head this year as they each vie for territory in legal sports betting states. California has become the focus of 2022, with its rich gambling population and increased tourism.
It has become the gold rush of the 21st Century and commercial sportsbooks are in it to win it.
Ballot Initiatives In California
In August of 2021, DraftKings rallied a band of seven domestic operators to fund a $100 million legal betting campaign. The ballot initiative is similar to an earlier measure in Florida and aims to allow the entry of external sportsbook operators in exchange for 25% of all gross earnings.
This proposition directly counters that of California’s tribal casinos, who are seeking privileges for sportsbook exclusivity in the state. The California Legalize Sports Betting on American Indian Lands Initiative only designates 10% of sportsbook profits to the state.
California’s tribes have already picked up enough signatures for their measure to appear on the 2022 Midterm ballot. DraftKings and its cohorts will have to do a lot of politicking if they want a chance at the California market.
Voters Remain On The Fence
Ultimately, lobbying and advertising can only take an initiative so far. And for those who aren’t already avid bettors, there’s a lot of convincing that can’t be done using bonuses alone.
On Wednesday, UC Berkeley published the results of a poll on California sports betting. The study surveyed 4,447 voters in California and found that only 45% favored the entrance of any legal betting operations.
A third of the voters in this poll voiced direct opposition to any legal sports betting bill, while the remaining 25% claimed that they were undecided on the matter.
While a pool of 4,447 voters is hardly a representative sample, it is indicative of the lengths prospective operators must go to secure legalization for next year.
Right now, the question in Cali isn’t one of control. That comes later.
Proposition To Put People First
At the moment, the focus is on swaying the people of California towards a measure that will improve living conditions in the state. And DraftKings is now shifting pace to do that. Still, the messaging is fairly bland and, to some, disingenuous
“Legal online sports betting is projected to bring hundreds of millions in tax revenue annually to the state to address two of the state’s most pressing issues: homelessness and mental health.”
DraftKings CEO Jason Robins
Shortly after this statement was made, DraftKings’ stock took a 20% hit.
At a 25% tax margin, California is being robbed blind. How could bettors get on board with this plan when New Yorkers are taking home 51% of gross mobile sportsbook earnings and soaring because of it?
Casinos and sportsbooks alike will have to do some serious strategizing if they want to come out on top this November.
Source: LA Times, MarketWatch
