California sports betting set for heavy defeat as voters reject ballot initiatives

Voters went to the ballot boxes on Tuesday, with the Associated Press reporting Proposition 26, the tribal-backed initiative, polling at 29.2% (1,345,721) of votes endorsing, compared to 70.8% (3,258,178) against proceeding with the bill.

Early figures on the multi-operator backed Proposition 27 make for sobering reading for the industry, with 84% of voters rejecting the initiative, compared to just 16% (735,587) supporting Proposition 27.

The AP’s results were based on 33% of votes being counted in the state but serve as an important indicator of the course of each initiative with the voters.

A spokesperson for the ‘Yes On 27’ campaign issued a statement following the early polling, citing the significant obstacles to its passage.

“Our coalition knew that passing Prop 27 would be an uphill climb, and we remain committed to California. This campaign has underscored our resolve to see California follow more than half the country in legalizing safe and responsible online sports betting,” the Yes On 27 spokesperson said.

“Californians deserve the benefits of a safe, responsible, regulated, and taxed online sports betting market, and we are resolved to bringing it to fruition here,” he added.

Despite the defeat of their own Proposition 26, the opposition ‘No On 27’ campaign lauded their pyrrhic victory over their operator opponents as a vindication of tribal rights with respect to gaming.

“California tribes are thankful that voters have defeated Prop 27 and affirmed the mutually beneficial relationship enjoyed by tribes with the state of California,” San Manuel Band of Mission Indians chief intergovernmental affairs officer Dan Little said in a statement.

“The sovereign right of tribes to exclusively operate casino-style gaming in California, as originally confirmed by the state’s voters over two decades ago, has been preserved from the incursion of out-of-state corporations.

“Those corporations should be aware that California tribes will always protect their people and their sovereignty, as well as work with the people of California to improve our collective wellbeing, now and into the future,” Little added.

Both sides seemingly acknowledged defeat in their efforts to sway the voters in September, with the CEOs of FanDuel and DraftKings suggesting a second run in 2024 at the G2E conference.

In the run up to the vote, the Yes On 27 campaign pulled its TV advertising after early polling suggested it had backfired, despite a $400m advertising campaign being waged in the state.

Proposition 26’s backers, a tribal coalition which contributed $132m to the campaign, have similarly found backing among voters in the state hard to come by but have suggested that any future attempts by the out-of-state group to enter the Californian market will similarly be opposed.

Despite the recruitment of early advocates to each respective campaign, as well as passing through a successful signature gathering exercise in California allowing for both initiatives to be included on the November ballot, Propositions 26 and 27 found high-profile support difficult to come by.

Politicians from both sides of the aisle indicated their rejection of both initiatives, with Republicans and Democrats being joined in their opposition by the LA Times newspaper and California Governor Gavin Newsom, who voiced his opposition to Proposition 27 last month.

The rivalry between the two groups could resume in 2024, however both would be required to draw up new initiatives while also garnering more than one million Californians in order to qualify for a second statewide vote.