New September Prop 27 Ad Makes Claims on Homelessness. Are They True?

When the California election is over and we find out if Prop 27 passed or failed, it might be the decision to tie the initiative to California’s homeless problem that proves crucial to the outcome.

The latest ad from Yes on 27 stresses that Prop 27, which would legalize online sports betting only, will help solve homelessness in the largest state in the country.

Is that claim more fact or fiction?

After months of being barraged by ads supporting or opposing Prop 27 and Prop 26, which would legalize sports betting only in-person at casinos and racetracks, do voters even care to make it legal to bet on sports in California?

Is the natural tendency to be suspicious of government programs and out-of-state money too much for Prop 27 to be successful?

The Yes on 27 folks hope their efforts will sway voters to pass an initiative that would create the largest betting market in North America.

SURVEY: Many California Sports Bettors Are Already Using Offshore Sportsbooks, VPNs Illegally

Yes on Prop 27 Ad for September 2022

The above advertisement is running now in California.

Prop 27 Responds to Concerns That Taxes Won’t Help All Tribes

A primary criticism of Prop 27 is that it will generate millions for out-of-state gaming companies and a few large California tribes, but that tax revenue will never get to small tribal nations nor address the homeless problem — even though the measure says 85% of tax funds would go toward homelessness and 15% would go toward non-gaming tribes.

Yes on 27 counters that argument in its latest ad, claiming that those issues are instead tied to Prop 26.

“Prop 26 means no money to fix homelessness, no enforcement oversight, and no support for disadvantaged tribes,” the ad says.

Prop 27 will create “new housing units in all 58 counties,” says the Yes on 27 ad. And the commercial claims Prop 27 will establish “strict audits” to ensure the tax revenue goes toward housing for homeless, “getting them off the streets.”

Tying homelessness to Prop 27 could backfire. Twitter user @Twolfrecovery wrote, “Prop 27 masquerading as a measure to fund homelessness when it’s really an attempt to open up online sports betting to anyone in #California has to be one of the most egregious political ploys I’ve ever seen. Hard NO on Prop 27.”

Funding for Yes on 27 may Turn Off Some Voters

One needn’t look closely to see a name at the conclusion of the new Yes on 27 ad: BetMGM. Yes, BetMGM has spent millions ($25 million, specifically) in support of Prop 27. Other sports betting companies (DraftKings and FanDuel, for example) have also spent oodles of money to back Prop 27.

Even if BetMGM, FanDuel, and DraftKings have good intentions in regards to the homeless issue in California, the companies can’t avoid looking self-serving by opening their checkbooks to fund Yes on 27.

One Twitter user in California Tweeted, “@DraftKings and @FanDuel COULD CARE LESS about homeless as long as they collect RECORD PROFITS. In fact, Prop 27 would probably work just as well for the homeless as the lottery does for education.”

Fact-Checking the Latest Yes on 27 Commercial

“Prop 26 means no money to fix homelessness”

As written, Prop 27 stipulates that 85% of tax revenue from sports betting in California must be earmarked for homelessness programs. Yes, it does provide for bi-partisan auditors to ensure the money is spent in that manner. Sure, we can quibble over whether sports betting will generate enough money to “fix” homelessness. But it will definitely help in many poor areas.

Conversely, it’s true that Prop 26 does not explicitly call for tax revenue from sports betting to be used on housing and homelessness. However, 70% of tax funds under Prop 26 would go toward California’s General Fund. That fund addresses, among many other things, homelessness.

Verdict: Misleading, but true if we’re talking about specific language in the measures.

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“Prop 26: no support for disadvantaged tribes”

Under Prop 27, tax revenues used for homelessness would be required to be used in all 58 counties in the state. Technically, that means it would assist all tribes. In addition, 15% of tax funds under Prop 27 would go toward non-gaming tribes.

Prop 26 claims it would help non-gaming tribes by adding more money to the Revenue Sharing Trust Fund. More money is great. However, as laws are currently written, each non-gaming or limited-gaming tribe eligible for RSTF money receives $1.1 million annually. That would need to be changed to allow higher payments to make Prop 26’s claim true.

Also, the word “support” is vague here. Is that just financial support?

Verdict: Vague, but there could be truth to it in the financial sense.

IF PROP 27 PASSES … Potential California Sports Betting Bonuses

Prop 27 would provide for “new housing units in all 58 counties”

Prop 27 would be required to establish housing projects for the homeless in every county in California. So, yes this is accurate. However, the language of the proposal states that legislators can issue the funds by need. So, larger counties and those with more homeless may receive more money.

Verdict: True.

Prop 27 will get the homeless “off the streets”

If Prop 27 passes, 85% of the money from sports betting activity would have to be spent on homelessness. The language does not stipulate exactly how the funds must be spent, but it does ensure it’s done equitably.

Let’s do some quick math: A recent report from an independent research firm estimated online sports betting in California would drive $2.8 billion in annual revenue. Revenue tax under Prop 27 would be 10%, so that’s $280 million in tax funds. Then, 85% of that would mean $238 million annually allotted to address homelessness.

An issue like homelessness is complex, especially in a state in excess of 160,000 square miles and with more than 39 million people. It’s impossible to say any measure will “solve” or “fix” a problem like homelessness.

But, given the potential size of an online sports betting market in California, the tax revenue that could go to the state via Prop 27 could do a lot of good for people who struggle to find a home.

Verdict: In a perfect world, true.