DraftKings Email Urges California Customers to Vote Yes on Prop 27

What are the chances Prop 27 will pass in November, legalizing online sports betting in California? A recent move from DraftKings suggests the sportsbook giant might not be extremely confident.

This week, the company sent a mass email to DraftKings customers who live in California, urging them to vote yes on Prop 27. The email leverages the FOMO (Fear of Missing Out) psychological factor.

“Football season is right around the corner and California STILL does not have mobile sports betting,” the DraftKings email reads.

California would be the largest state to have legalized sports betting if either Prop 27 or Prop 26 were to pass. It’s the fifth-largest economy in the world, and DraftKings hopes to launch DraftKings California there.

But gaming companies like DraftKings have a lot at stake financially in the success of Prop 27. If it passes, Prop 27 would allow online sports betting operated by DraftKings and other sports betting companies. Prop 26 would only allow sports wagering at retail sportsbooks governed by state tribes and California horse racetracks.

What Does the DraftKings Email Say?

“Nearly half the country can place legal, safe bets on sports from their mobile devices, but California still cannot,” the email message from DraftKings reads. “Come this November you can vote for change by voting YES on Proposition 27, which will authorize online sports betting in California, in partnership with the state’s Tribes. The tax revenue generated by legalizing online sports betting will be dedicated to solving California’s homelessness and mental health crisis, providing the state with hundreds of million of dollars in dedicated, annual funding — for the first time — to address some of the state’s most pressing challenges.”

The DraftKings email urges recipients to visit Prop27Sports.com, a website launched Aug. 24 that’s run by the Yes on 27 campaign. It goes on to call Prop 27 “a win-win for you and the State of California!” DraftKings also includes a link to California’s state website for subscribers to see if they are registered to vote. Election day is Tuesday, Nov. 8.

Is Prop 27 in Danger of Not Passing?

A recent independent report gave a “less than 50%” chance Prop 26 or Prop 27 passes in November. The sour prediction was mainly due to voter confusion with two similar measures on the same ballot and advertising being forced down their throats.

Polling regarding Prop 26 and Prop 27 has been inconclusive, other than suggesting it’s going to be a tight race. An August 2022 survey conducted by California Casinos found that, among Californians interested in sports betting, 61% want both Prop 26 and Prop 27 to pass. Only 15% wanted just Prop 27 to pass, and only 15% wanted just Prop 26 to pass.

Other interesting results: 60% prefer private companies run the sportsbooks over tribes and 49% prefer Prop 27’s revenue tax funding plan, compared to 32% favoring the Prop 26 model. Under Prop 27, 85% of revenue tax funds would go toward homelessness programs and 15% would go toward non-gaming tribes. Under Prop 26, 70% of revenue tax funds would go toward the state’s General Fund, 15% would go toward problem gambling programs, and 15% would go toward the state regulator.

How Much Money Would DraftKings Make in California?

The same independent report that cast doubt on either Prop 26 or Prop 27 passing projected FanDuel, DraftKings, and BetMGM would own 70% of the California sports betting market. The report also predicted Prop 27 would generate $2.8 billion in annual revenue.

When the math plays out, that would come down to roughly $653.3 million for each of the three sportsbooks, if they split revenue evenly. That far surpasses projections for 2022 revenue in New York, the most lucrative US sports betting state so far.

In addition to the email, DraftKings has also added just shy of $1 million in financial contributions to the Prop 27 campaign since Aug. 31. It had already donated $25 million before Aug. 31. And FanDuel is chipping in, too. It unloaded a $6 million donation to Prop 27 on Sept. 1, as well as $5,000 in two other September contributions. That brings FanDuel’s total contributions to more than $31 million.

Supporters of Prop 27 and Prop 26 have spent nearly $400 million on their campaigns. The state has been a battleground over the issue, which has resulted in both the California Democratic and Republican parties opposing Prop 27 in a rare sign of unity.