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Election 2022: State voters to decide two sports betting measures

REGION — The future of legal sports betting in California is being placed before voters in two vastly different measures this November, as Proposition 27 aims to open up online gambling throughout the state and Prop 26 seeks to allow it only in person at racetracks and tribal casinos.

The two measures have made California the latest sports betting battleground in the United States, where 32 states have already legalized sports betting in some capacity, either online or at in-person sportsbooks or tribal casinos.

Few issues on the Nov. 8 ballot spell out such major local impacts for San Diego County, which is home to the Del Mar Racetrack, where an existing horse race betting operation could expand to include lucrative onsite sports betting under Prop 26, as well as home to 18 Native American reservations represented by 17 tribal governments —  the highest concentration of reservations in the United States — and 10 tribal casinos.

Spending on Prop 26 and 27 campaigns has exceeded $300 million, making it one of the most expensive ballot issues in California history. Voters have been assailed with television ads for and against both propositions.

If neither proposition passes, sports betting would remain illegal in California. There is also the  possibility of both measures passing, which could become complicated — in a situation where two measures are passed that conflict with one another, the California Constitution states that the measure with the highest margin of votes will prevail.

Here are the main differences between the two measures:

Prop. 26

Proposition 26 would allow in-person sports betting specifically at California’s four racetracks and tribal casinos, which would pay a share of bets made to the state. In-person sports betting as well as roulette and dice games would be allowed at tribal casinos, which would shoulder some of the state’s regulatory costs.

Racetracks would be required to contribute 10% of bets made to the state, while individual tribes offering sports betting would decide the terms in their compact with the state regarding how much revenue to contribute.

Revenue from Prop 26, anticipated to be in the tens of millions of dollars annually, would be placed into a California Sports Wagering Fund. Around 40% of this money would go toward state spending on K-12 schools and community colleges, and the remaining 60% for related costs and other state spending priorities.

The measure is officially supported by 31 California tribes and tribal organizations, including eight tribal governments in San Diego County. Proponents say it not only supports tribal sovereignty, but also offers a well-regulated avenue for sports betting.

“Prop 26 continues the promise that California voters made to tribes to give them the exclusive rights to casino gambling,” said campaign spokeswoman Kathy Fairbanks. “If you’re looking between 26 and 27, we believe 26 is hands down the better approach, the more responsible approach, and the more regulated approach to establishing sports betting in California.”

The 22nd District Agricultural Association, which manages the Del Mar Racetrack, is all but banking on the proposition being passed. The district is currently in the process of selecting an operator to develop a first-class sportsbook at the track where residents could place sports bets in addition to continuing to bet on horse races.

Opponents to Prop 26 allege that the measure gives tribal governments offering in-person sports gambling more leeway to sue smaller cardrooms not operated on tribal lands, potentially limiting a crucial revenue source to many jurisdictions.

Prop. 27

Backed by out-of-state gaming companies like DraftKings and FanDuel, Proposition 27 would allow licensed gambling companies and tribes to offer online and mobile sports betting to Californians 21 and older outside of tribal lands.

The measure would allocate 10% of bets made after subtracting certain expenses to a California Online Sports Betting Trust Fund, with proponents expecting these revenues to be in the hundreds of millions of dollars annually. Eighty-five percent of the fund would go towards homelessness, mental health and addiction programs and 15% toward underprivileged tribes.

Prop 27 also requires the creation of a new unit to regulate online sports betting and set licensing requirements within the California Department of Justice, costs for which would be supported by revenue from the measure.

Supporters of the measure include various homelessness organizations and a handful of small, rural Native American tribal governments.

“The passage of Prop 27 will create the ongoing investment that will provide permanent solutions for our homelessness epidemic,” said Tamera Kohler, CEO of the San Diego Regional Task Force on Homelessness. “We need to create a permanent source of revenue for homelessness and affordable housing programs that is specific to state and local needs if we are ever going to implement permanent solutions to the degree necessary to solve this crisis.”

Those in opposition include over 50 California tribal governments and organizations, including eight tribal governments in San Diego County, who allege it will harm the sovereignty of tribes that rely on having sole operation of gambling operations and make little difference in addressing homelessness. 

Gambling companies would be required to partner with a local tribal government and pay $100 million to obtain a five-year license to offer online gambling, with an additional $10 million required to renew the license.

Tribes seeking to offer online gambling under their name would be required to pay $10 million to obtain a five-year license and $1 million for each license renewal.

In both measures, sports betting on high school games would be prohibited.

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