According to analysts at Southern California-based Eilers & Krejcik Gaming.
But don’t count on that happening.
Analysts believe the odds are that both measures will fail.
They predict that no question will receive more than the required 50 percent of the votes to pass.
“The political power and deep niches of interest with dogs in this hunt … have led us to be negative about the prospects for legalizing sports betting in California this fall,” said Eilers & Krejcik analysts Becca Giden, Chris Krafcik and Adam Krejcik wrote in a research paper published last week looking at Proposition 26 and Proposition 27.
They say competing messages from tribal casinos, online sportsbooks and sports leagues, along with the back-to-back presentation of polling questions, confuse voters more than send positive messages.
Proposition 26, backed by a coalition of nearly two dozen Native American tribes, would only allow in-person sports betting at tribal casinos and racetracks. Proposition 27 is supported by seven sportsbooks, including DraftKings, FanDuel and BetMGM, and would allow online sportsbooks to offer mobile betting across California in partnership with tribal casinos.
Native American tribes and other interested parties have so far spent a combined $364 million on and against the electoral issues, often using spiteful language. Millions of additional dollars are expected to be spent over the next two months. The number has already broken records for most spending on a nationwide referendum campaign.
Eilers & Krejcik predicted that online sports betting would generate $2.8 billion in annual sales, while retail-only sports books would generate $1.3 billion — $3.1 billion in total. That number is larger than the $2.3 billion that analysts projected for Texas if the state legalized the activity and $1.3 billion from a mature sports betting market in Illinois, where the activity is concentrated in casinos and is legal online.
The analysts said that the spread of online sports betting would be immediately dominated by three companies – DraftKings, FanDuel and BetMGM – which could account for 70 percent of the market. The companies are already advertising in the country through various radio and television sports channels and through team sponsorships.
Caesars Sportsbook has taken a neutral stance on the two voting issues due to parent company Caesars Entertainment’s operating partnership with two California tribal casinos.
Additionally, the measure would require a license fee of $100 million for online sports betting, “and a small handful of operators who support this measure are able to meet those requirements.”
Eilers & Krejcik predicted that the passage of Proposition 27 could lead to a consolidation in the sports betting sector with “serious movers” like Fanatics, ESPN and Bet365 merging with other operators including Rush Street Interactive or PointsBet.
The consultancy also warned voters not to “read the fine print” on both election questions.
Proposition 26 would allow tribal casinos to add craps and roulette, which are currently banned. The tribal measure also bans sports betting on games involving California colleges and universities, and the 10 percent gambling tax rate would apply only to racetracks that add retail sports betting.
Proposition 27 would tax all wagers, but only after deducting winnings paid out, advertising credits and state excise tax payments. The measure allows for betting on games involving California colleges and universities. Analysts said that aspects of the online betting action are quite favorable for sports bettors.
Voting questions have been asked about sports betting in Arkansas, Colorado, South Dakota, Louisiana and Maryland since the Supreme Court ruled in 2018 that states could legalize the activity. Eilers & However, Krejcik analysts worry that California could break the streak.
“Two competing sports betting actions occurring back-to-back on the same ballot are unprecedented in the political history of U.S. sports betting, complicating efforts to predict their outcome,” the analysts wrote.
