Why California Online Sports Betting Bill Failed

It has been roughly one month since both bills that would have legalized sports betting in California were thoroughly quashed by voters at the polls. And in that time, the focus has shifted to what went wrong and how a similar fate can be avoided next time. This has prompted some revelatory discoveries—including the allegedly real reason the 2022 California online sports betting initiative failed.

For those who might not remember, there were two sports betting bills on the California ballot. There was Proposition 26, which would have legalized on-site sports betting at select tribal grounds. And then there was Proposition 27, which would have legalized California online sports betting in addition to on-site wagering at tribal establishments and select card rooms.

While both initiatives were voted down by the majority, the California online sports betting bill (Prop 27) was absolutely annihilated. According to the election results, this proposal had an 82 percent disapproval rating. That verges on unanimous in this current political climate, where every issue seems to be bi-partisan.

Despite getting clobbered at the polls, commercial online sportsbooks remain committed to cracking the California market over the next few years. To do so, though, they need to completely flip the script. That invariably means learning from their mistakes. And that, in turn, means they need to pinpoint exactly why Proposition 27 was decidedly killed.

Distilling defeat down to a singular reason can be difficult. But recent insight suggests there's one prevailing factor that cost the retail sportsbooks behind Proposition 27 the chance to legalize sports betting in California.

This is Apparently Why the California Online Sports Betting Failed Miserably at the Polls

For anyone interested in the short answer, here's the quick summation of why the California online sports betting bill failed: The counter campaign from the state's participating tribes worked.

The supporters of Proposition 26 (the on-site sports betting bill) invested hundreds of millions of dollars in messaging that was geared against Proposition 27. And while they highlighted a vast array of potential problems with Prop 27, one approach in particular worked quite well. As the Review Journal recently explained:

"Proposition 27, a proposal favored by out-of-state gambling interests that included FanDuel, DraftKings and BetMGM, would have allowed online betting on smartphone apps. Opposed by California’s tribal casinos, the measure was supported by only 16 percent of voters. The tribes apparently convinced voters that betting online is far more addictive than betting in person and potentially too accessible to children."

This was a smart approach by the backers of Prop 26. Concerns over the increase in gambling addictions and underaged wagering have stalled, if not torpedoed, legal sports betting legislation in other states.

By playing up this downside, while also pointing out that the revenue for online sportsbooks wouldn't stay in the state, it seems the backers of Prop 26 were able to sway the vast majority of the voting population against an online sports betting bill that was once upon a time considered a sure thing.

Is There Any Merit to Gambling Addiction Claims Made Against Online Sports Betting?

Coming out of Election Season, many supporters of the California sports betting bill have said that their opponents overplayed the risk of gambling addiction. But a September feature in The Washington Post suggests the counterclaims are more accurate. Consider the following excerpt from the article:

"According to one study in the Addictive Behaviors journal, 'Sports betting, relative to non-sports betting, has been more strongly linked to gambling problems and cognitive distortions related to illusion of control, probability control and interpretive control.' The “illusion of control' may be enhanced by the rapidity of the technology in the bet-by-5G era. There’s no extra step of physically withdrawing cash from an ATM, driving to the casino or even waiting for a blackjack table dealer. The rapid advance of this technology has allowed gambling operators to figure out a lot about customers —when they bet, how much they bet, whom they bet on —and addiction experts maintain that the companies have a responsibility to use that data to help keep bettors from becoming addicts."

This feels like pretty damning evidence. But it also introduces a solution: accountability. States can and should hold sportsbooks accountable for how they advertise and draw in customers. The methods they use can be predatory.

It's the same deal with the on-site casino business. Multiple studies show that these establishments tend to pop up in low-income neighborhoods. That's why some states remain so opposed to the expansion of casino operations as well as sports betting in general. But they have the power to try addressing this.

Remember: The federal government gave state branches ultimate control over if, when and how they legalize sports betting. There's nothing that stops states from capping the amount of money sportsbooks can spend on advertising or assessing them extra fees. California, for instance, could insist certain technological barriers be put in place to spot gambling addictions through betting patterns. They can also mandate stricter clearance terms in place to dissuade underage gambling. They can even ensure sports betting companies contribute a certain amount of money to programs that combat the ill-effects of gambling.

Will Online Sports Betting Ever Come to California?

To be sure, nothing discussed above is meant to be a panacea. Gambling addiction will always be at the forefront of legal sports betting and cannot be eradicated entirely. But if the makers of the California online sports betting bill really want to learn from their mistakes, they will start with their messaging and security standards.

Granted, they still need cooperation from state officials. And many in the government were against Prop 27 more than they were against Prop 26. Even so, the most stubborn opponents understand California is losing a boatload of revenue to all the highly reviewed top online sportsbooks that allow residents in the state to set up accounts and place wagers.

This is why it's considered only a matter of time before California changes course. However, if the 2022 elections are any indication, those in charge of campaigning for online sports betting have a long way to go.

Take a look at this list of the top online sportsbooks so you can find which one works for all of your sports betting needs: