If Prop 26 & Prop 27 Fail, What’s Next for California Sports Betting?

With more than $360 million spent debating Prop 26 and Prop 27 in California, voters may be fatigued from the negativity of this election season. Prop 26 and Prop 27 would both legalize sports betting, but in markedly different ways.

But what if voters are fed up and reject both ballot proposals? Folks have spent hours discussing what could happen if both Prop 26 and Prop 27 pass. But there’s also the distinct possibility neither do.

What would proponents of legal California sports betting do next?

What Do the Polls Say About Prop 26 and Prop 27?

The Republican Party has come out against both Prop 26 and Prop 27. In a rare move reminiscent of “that other place” freezing over, the Democrats agree with the GOP, and also oppose Prop 27. California Dems are neutral on Prop 26, which would allow sports betting, but only at retail sportsbooks at tribal casinos and the state’s horse racetracks. Prop 27, meanwhile, would legalize online and mobile sports betting.

So how do the voters feel? Polling has been inconclusive.

Some polls published by media outlets claim Prop 26 has a large edge in popular support. Others show it much closer. A few polls indicate that California voters in general support legal sports betting, regardless of how it’s implemented. A poll by David Binder Research in May revealed that 59% of respondents intended to vote YES on Prop 27, with 28% saying they would vote NO, and 13% undecided.

An August California Casinos survey of Californians interested in sports betting found 61% wanted both Prop 26 and Prop 27 to pass. It also found 60% preferred the private companies like DraftKings run sportsbooks, rather than California tribes. Another interesting result: 49% preferred Prop 27’s plan for tax funds, compared to 32% favoring the Prop 26 plan.

Many observers expect the Nov. 8 vote to be close for both Prop 26 and Prop 27. A measure must receive at least 50% of the vote in order to go into effect. On Aug. 24, Eilers & Krejcik Gaming, an independent research and consulting firm, released a CA sports betting report that predicts a toss-up — for either to pass.

“We preliminarily put the odds of one or both measures passing at less than 50%,” Eilers & Krejcik said in its report.

Earlier in 2022, several tribal nations pointed out the difficulty of passing one, let alone two sports betting proposals.

James Siva, Vice Chairman of the Morongo Band of Mission Indians in Riverside County, predicted that two measures on the ballot might spell doom for sports betting in California.

“I think it’s a small, small possibility they all pass,” Siva said in May. “I think it’s much more likely that all (will) ultimately fail because of voter confusion.”

WHO WANTS WHAT? Full List of California Tribes Who Support Prop 26 and Prop 27

Could Supporters of Prop 26 and Prop 27 Compromise on Future Sports Betting Laws?

It may seem impossible, but should both proposals fail this November, one possible outcome could be compromise. The tribes that support Prop 26, and the large companies and handful of tribes that support Prop 27, do have one thing in common: They all want legal sports betting in the world’s fifth-largest economy.

Proponents of Prop 26 and Prop 27 both want to see revenue flowing to tribes and the state. Could they bargain away their major differences and arrive at a solution?

MORE: Fact-Checking the New Yes on Prop 27 Ad in California Sports Betting Battle

A compromise might succeed. Both political parties could use that cover to advance a measure that satisfies a broader swath of their constituencies. Here are some possible compromise deals that might be acceptable to Prop 26 and Prop 27 supporters:

• A higher tax rate on mobile sports betting operators, with revenues shared with nonparticipating tribes.
• A limit on the number of mobile sports betting operators, and a ban on those operators running retail sportsbooks in tribal casinos.
• Earmarking a significant portion of sports betting revenue for programs that benefit all tribes in California.
• Offer a state-run mobile sportsbook option to compete with large brands, with revenue going to the state and tribal nations.

NEWSOM TALKS: California Gov. Gavin Newsom on Prop 27: ‘It Is Not a Homeless Initiative’

How Does a Prop Reach the Ballot in California?

In California, ballot measures can be placed on the statewide ballot in two ways: gathering of signatures by interest groups, or through legislative action. In the case of Prop 26 and Prop 27, neither was introduced by the state legislature.

To get their favored proposals on the ballot, groups must acquire 997,139 verified signatures from registered voters. Since California has roughly 22 million registered voters, that means less than 5% of voters must sign.

IF PROP 27 PASSES … Potential California Sportsbook Bonuses

Thus, even Prop 26 and Prop 27 supporters would no doubt try again if their measures fail. Legalizing sports betting in California a tantalizing opportunity worth a second effort for supporters of both props. California is by far the most populous state in the US, with just under 40 million residents. Experts estimate its sports betting market could gross $3 billion in annual revenue.

So, yes, California’s tribes and US sportsbooks would certainly give this a second go. (And a third, fourth, fifth … )

California Tribes Working on 2024 Online Sports Betting Initiative

Before we even know if Prop 26, Prop 27, both, or neither pass this November, a group of California tribes is working on gathering signatures to get an initiative on the 2024 ballot.

This initiative, called the Age-Verified Tribal In-Person and Online Sports Wagering Regulatory Act Initiative, would legalize online sports betting in California through the state’s tribes. It stipulates that 15% of state tax funds would go toward nonparticipating tribes. Then, 10% would go toward homelessness and mental health programs.

Supporters didn’t gather the required 997,139 verified signatures in time to get this on the 2022 ballot. But they’re continuing to gather signatures in an effort to get it on the 2024 ballot. As of Aug. 25, a random sample count from the state government estimated they had roughly 75% of the needed amount of verified signatures.

The main proponents of this sports betting measure are the Rincon Band of Luiseño Indians (which owns Harrah’s Resort SoCal), the Wilton Rancheria (which owns Sky River Casino), and the San Manuel Band of Mission Indians (which owns Yaamava’ Resort & Casino).