One month before voters decide the fate of sports betting in California, a new poll finds two competing ballot initiatives — each of which would allow sports betting in very different forms — are both trailing badly and are likely to be defeated.
Reacting to the grim outlook, a coalition of operators led by DraftKings and FanDuel have reportedly decided against throwing millions more into the effort to get Proposition 27, aka the California Solutions to Homelessness and Mental Health Support Act — over the finish line on November 8.
The operators had chipped in $19.2 million around mid-September, in addition to the millions they had contributed previously, despite a poll by the Public Policy Institute of California (PPIC) at the time that showed only 34% of likely voters supported Prop 27 while 54% were opposed.
The numbers haven’t improved since then.
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Poll: Only 27% Support Industry-Backed Plan
On October 4, a poll by the Institute of Governmental Studies (IGS) at the University of California-Berkeley and the Los Angeles Times found that Prop 27 trailed by a two-to-one margin (53% No, 27% Yes).
IGS found that support for a rival ballot initiative, Proposition 26, was also under water but at a narrow margin — 42% opposed and 31% supporting.
Prop 27 would allow online sports betting through partnerships between operators and 70-odd tribal casinos in the state. There is no online sports betting component in Prop 26 — retail sports betting would be allowed at tribal casinos and a handful of racetracks.
“These results suggest that the sports wagering initiatives are foundering in the face of the opposition advertising campaigns,” said IGS Co-Director Eric Schickler. “The lack of support among key demographic groups makes the passage of each an uphill climb, at best.”
Other sportsbooks — specifically, Bally’s, Barstool, BetMGM, Fanatics, and WynnBET — have poured millions into the effort to get Prop 27 passed, in no small part largely because of projections that California’s sports betting market could total $3.6 billion annually. The industry has collectively spent about $170 million on the effort.
But the industry appears to have its work cut out for itself. IGS Co-Director Mark DiCamillo, director of the IGS poll, said California voters have a 53% favorable opinion of tribes that run casinos in the state, compared to 19% unfavorable.
“By contrast, the reverse is true with regard to opinions of the companies that operate online sports betting websites, like DraftKings and FanDuel, with only 14% of voters offering a favorable opinion and 48% viewing them unfavorably,” DiCamillo said.
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Report Says $11 Million in Ads Canceled
A report by the Wall Street Journal suggests that the industry has seen the writing on the wall.
The newspaper reported Monday that an analysis of ad-buying data through October 6 revealed that about $11 million in broadcast TV and cable ads were canceled recently. The ads had been ordered by the coalition of operators in support of Prop 27.
Despite the billions operators could make in California, there were a couple of noteworthy exceptions.
Rush Street Interactive (RSI) had telegraphed to analysts in mid-July that it might not launch either its BetRivers or PlaySugarHouse brands in the state because of the expense of licensure — $100 million initially for five years, and then $10 million for a five-year renewal.
Caesars Entertainment was also reluctant to endorse either Prop 26 or Prop 27 and took a neutral stance instead. The operator said it feared damaging its business relationship with tribal casinos in California and other states if it took a position on the issue.
