California Sports Betting Initiative Gets Big Boost From MLB

Meanwhile, five sports betting operators spent $50 million in July to get the initiative passed.
California Sports Betting Initiative Gets Big Boost From MLB
August 16, 2022

MLB believes that Prop 27 has the safeguards to create a safe & responsible online sports betting market in California Major League Baseball (MLB) announced Friday that it supports an industry-backed initiative for online sports betting in California — becoming the first major sports league in the US to do so.

The league’s support of Proposition 27, aka the California Solutions to Homelessness and Mental Health Support Act, comes as five operators contributed an additional $50 million toward the initiative’s passage in November.

But an advocacy group for the homeless announced its opposition to Prop 27, illustrating the proposal’s complexity.

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League Backs Prop 27 for Integrity Provisions

In a statement Friday, MLB said that as legalized sports betting expands across the US, the league “remains committed to protecting the integrity of its games and creating a safe experience for fans who wish to wager on those games.”

MLB added that Prop 27 is “the only measure on California’s upcoming ballot that would authorize and regulate online sports betting,[and] includes strong integrity provisions designed to help MLB carry out those commitments.”

The league lauded the initiative for:

  • Requiring sportsbook operators to notify sports leagues of any suspicious wagering activity
  • Allowing sports leagues to propose restrictions on betting markets that are particularly susceptible to manipulation
  • Helping to create other forms of integrity-related cooperation between the State of California, sports leagues, and operators

MLB believes that Prop 27 has the safeguards to create a safe and responsible online sports betting market in California — a state with millions of MLB fans looking for alternatives to illegal offshore betting sites,” the league said.

California is home to five MLB franchises — the Los Angeles Angels, the Los Angeles Dodgers, the Oakland A’s, the San Diego Padres, and the San Francisco Giants. It is home to more MLB franchises than any other state.

Operators Chip in Another $50 Million

Operators continued contributing to help get Prop 27 across the finish line in November.

According to a list of late contributions on Cal-Access — a website from the office of California Secretary of State Shirley Weber that tracks campaign finance and lobbying activities — five operators collectively gave $50 million in July:

Operator Registered in California as Donation
Barstool Penn Interactive Ventures LLC $12.5 million
BetMGM BetMGM LLC $8.3 million
DraftKings DraftKings Inc. $8.3 million
Fanatics FBG Enterprises LLC $12.5 million
FanDuel Betfair Interactive US LLC $8.3 million

The $50 million in contributions follow more than $100 million that operators pledged earlier in the campaign. The five operators were joined by Bally’s and WynnBET as early contributors to the cause.

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Advocacy Group Opposed to Industry-Backed Plan

Despite MLB’s endorsement and the additional $50 million in contributions, Prop 27 still faces opposition. Many Californians support a rival initiative backed by a coalition of Native American tribes. Proposition 26 would authorize retail-only sports betting at tribal casinos and a handful of racetracks in the state.

On Monday, the Non-Profit Housing Association of Northern California (NPH), a group that advocates for the homeless and affordable housing in the Bay Area, announced its opposition to Prop 27, deriding it as an “out-of-state corporate online sports betting ballot measure.”

NPH Executive Director Amie Fishman said the organization “is always working towards solutions that will ensure a future where everyone has a safe, stable, and affordable place to call home, but Proposition 27 isn’t the answer.

“Proposition 27 is unlikely to meet its promises on homelessness and mental health because it is full of loopholes and deductions that will only benefit the online sports betting operators that will take their profits out of state and away from our Native American tribes,” Fishman continued.

Under Prop 27, operators would partner with one of about 70 tribal casinos in the state to offer retail and online sports betting. Revenue would be taxed at 10%, with 85% of tax revenue going toward state programs for homelessness, mental health, and addiction services. The remaining 15% would go to tribes not involved in sports betting.

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