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What is Prop 27? Explaining California’s online sports gambling bill

You’ve seen the political ads on your television. You’ve heard them on the radio. You may have even seen a billboard or two. There’s been no shortage of money spent on Proposition 27.

But what exactly is Prop 27, and who supports and opposes it?

Let’s start with the “what.”

If you ever tune into a sports broadcast or listen to a sports podcast, the names DraftKings or FanDuel probably ring a bell. Those companies are major players in the mobile and online sports betting worlds.

Even though you see and hear the advertising for those services, unless you’re playing Daily Fantasy Sports (DFS) games, it is technically not legal to make online sports bets if you’re a California resident.

Enter Proposition 27.

Prop 27 wants to clear the way for Californians of legal age to join in on the sports betting that other states enjoy.

If passed, it would allow Native American tribes, as well as gaming companies who make deals with tribes, to offer mobile and online sports betting for adults 21 and older. Large gaming companies like DraftKings and FanDuel would be first in line to make a deal with one of California’s 79 tribes.

So if you’re interested in betting on sporting events, like the NFL or NBA, you might consider voting “Yes” in favor of Prop 27. High school sports are not eligible, in the event your insatiable thirst to bet on sporting events can’t be quenched by the pros.

The tribes and gaming companies would have to pay taxes to the state if the initiative passes. An analysis conducted by state officials estimated that taxes and fees would equal hundreds of millions of dollars each year.

That money would then be dedicated to funding programs for homelessness and gambling addictions, as well as funding Native American tribes that do not have a stake or don’t participate in sports gambling.

Proponents say the added tax revenue will be good for the state, and consenting adults should be allowed to bet on sporting events like other states in the nation. Companies looking to break into the market would be required to pay $100 million for a license. A large chunk of that money would be earmarked for homeless services, affordable housing and other services and support for the tribes.

Opponents argue that the biggest winners with Pro 27 would be out-of-state corporations that could make millions at the expense of California’s Native American tribes. That $100 million fee is seen as a massive hurdle for smaller operations looking to get into the online gambling market.

Some ads in opposition to the bill also draw a line from gambling to other issues like substance abuse and homelessness, but the biggest issues, opponents say, is that the bulk of the gambling profits will be kept by gaming companies.

Still, state officials have crunched the numbers and believe its passing would still bring in millions in tax revenue to the state each year.

The two sides have clearly decided to spend big in an effort to see the vote go in their favor. According to the San Francisco Chronicle, the battle over sports betting is the most expensive ballot measure in the state’s history.

Hundreds of millions have been funneled into advertising for Prop 27, as well as a similar-but-competing initiative, Prop 26.

As of Sept. 20, 116 contributors donated more than $369 million for the cause; $169 million in support and $200 million against.

The biggest supporters are, naturally, the big gambling companies including FanDuel, BetMGM, and DraftKings. Major League Baseball has also voiced its support.

Those spending big money in an effort to stop Prop 27 includes some of California’s largest Native American tribes, notably the San Manuel Band of Mission Indians. Many of the tribes in opposition to the initiative run their own casinos and could, in theory, stand to lose income if Prop 27 were to pass.

Many California tribes have pointed to a similar, but different initiative – Prop 26 – as a better solution for those wanting to place their bets on sports games. That proposition would allow for sports gambling at race tracks and on tribal lands. Prop 26 also allows for tribal casinos to bring in dice games and roulette, which are currently prohibited.

Still confused? Here’s what a “Yes” or “No” vote means on your November ballot:

“A YES vote on this measure means: Licensed tribes or gambling companies could offer online sports betting over the Internet and mobile devices to people 21 years of age and older on non-tribal lands in California. Those offering online sports betting would be required to pay the state a share of sports bets made. A new state unit would be created to regulate online sports betting. New ways to reduce illegal online sports betting would be available.”

“A NO vote on this measure means: Sports betting would continue to be illegal in California. No changes would be made to the way state gambling laws are enforced.”

With millions spent in advertising, both propositions look likely to fail, according to a poll conducted by UC Berkeley’s Institute of Governmental Studies. The study is co-sponsored by the Los Angeles Times, according to CalMatters.org.

With that, if you’re tired of hearing about Prop 26 and Prop 27, you might be in luck. Spending on the ads is expected to quiet down as the Nov. 8 election approaches.

All registered voters in California will be mailed a ballot ahead of the election. Ballots are expected to be sent out 29 days before Nov. 8.

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