California Prop 26 & Prop 27: How Sports Betting Would Look Under Every Election Outcome
Photo by Justin Sullivan/Getty Images.
In a few weeks, California voters head to the ballot box to decide the future of legal sports betting in the Golden State as they vote on Prop 26 and Prop 27.
The Nov. 8 statewide election could play out in a few different ways — each election outcome impacting if sports betting becomes legal in California and how and where bettors will be able to place their bets, be it through online apps or in-person.
Early voting has already started, so to clear through the confusion between two competing bills on the ballot, we created this guide for every sports betting-related outcome based on whether Prop 26 and Prop 27 each pass or fail.
Prop 26 & 27 Voting Outcomes
What You Need to Know About California’s Prop 26 and Prop 27
What exactly is being voted on with Prop 26: Prop 26 would specifically legalize in-person sports betting in California at select tribal casinos and racetracks.
Each prop can pass independently, and both can pass or both can fail; their election outcomes bear no impact on the other’s ability to be passed by the voters.
Online Sports Betting Becomes Legal
… if Prop 27 gets more than 50% of the vote
If more than 50% of California voters select “Yes” on Proposition 27, also known as the California Solutions to Homelessness and Mental Health Support Act, online sports betting becomes legal, and 11 operators likely join as California’s approved sportsbooks.
Anyone in California over the age of 21 and not located on tribal land would be able to place bets online by September 2023 at the latest.
Betting on college sports (including in-state teams), the Oscars, eSports and league-awards like NFL MVP would all be allowed. (Other states like New York and New Jersey limit or exclude those.)
The bill imposes heavy financial requirements that could prevent smaller apps from entering the market: a $100 million licensing fee (four times New York’s, the current highest state) and a $10 million renewal fee every five years.
It also requires that operators are already licensed in 10 states, or own 12 casinos and operate in at least five states. Under those conditions, only about a dozen apps qualify:
- Bally Bet
- Barstool Sportsbook
- Hard Rock
Each would have to partner with one of California’s 110 federally recognized tribes. While many tribes in California have opposed Prop 27, not all have. Tribes could also offer sports betting, but they’d have to give up rights under federal law and be subject to further state regulation.
Operators would pay a 10% tax on revenue, which is low compared to other states like New York, where they pay 51%, and Pennsylvania, where they pay 36%.
Eighty-five percent of that revenue would be used to deliver permanent and interim housing across the state. Additional tax revenue would be sent to California tribes.
Most of California’s tribes staunchly oppose Prop 27, as it would allow commercial competition, disrupting their monopoly on California gaming and create an eventual path for iGaming. They’ve spent $233 million to stop it.
In-Person Sports Betting Becomes Legal at Select Locations
… if Prop 26 more than 50% of the vote
If more than 50% of California voters select “Yes” on Proposition 26, sports betting becomes legal in-person at up to 66 casinos and four racetracks.
Anyone in California over the age of 21 would be able to place a bet at a tribal casino that amends its state compact to offer sports wagering, or at a privately owned racetrack.
Those compacts would need to be ratified by the California legislature, which would take about a year, according to Kathy Fairbanks, a spokesperson for the tribes campaigning against Prop 27.
Tribes and racetracks would pay a 10% tax on revenue, with 70% of proceeds sent to the General Fund, 15% to programs that address problem gaming and 15% to fund industry regulation.
Online and In-Person Sports Betting Both Become Legal
… if Prop 26 and Prop 27 each surpass 50% of the vote
Typically, competing measures on the California ballot mean the one with the most votes supersedes the other.
But Prop 27 is written in a way that online sports betting and in-person sports betting can both become legal if each measure gets 50% of the vote. That would mean around a dozen sports betting apps by September 2023 and in-person betting likely launching a few months later.
Tribes would likely sue in any scenario where Prop 27 passes. They’ve claimed that could delay sports betting for a while, but it is unclear how a judge might rule. The gaming companies backing Prop 27 aren’t likely to sue under any of these scenarios.
California Sports Betting Remains Illegal
Prop 26 and Prop 27 both fail
Sports betting will remain illegal in California if neither ballot measure surpasses 50% of “Yes” votes.
Next path for legal sports betting?
The native tribes opposing Prop 27 and backing Prop 26 are working to bring their own online sports betting measure to the ballot in 2024.
FanDuel and DraftKings have also expressed interest in the 2024 ballot.
At a recent gaming industry conference, FanDuel CEO Amy Howe vowed commercial operators “will live to fight another day” should it come to that.
Her comments came in response to a UC Berkley poll that projects both propositions to fail. If that happens, California would be the first state where voters reject legal sports betting.