iGB Column: Both Proposal 27 and Proposal 26 appear likely to fall short in next week’s vote; Zak Thomas-Akoo inquires what went amiss and how the business can more effectively market itself to voters?
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What’s Amiss with California Sports Wagering?
California, with a population of 39.2 million, is the most populous state in the United States. If it were a nation, it would have the fifth largest economy in the world. The state is home to Silicon Valley, the global gem of the modern economy; boasts one of the most powerful university networks on the planet; and is home to Los Angeles, the second largest city in the United States. But it appears like none of this prosperity will be flowing into sports wagering anytime soon, as the state’s sports wagering proposals are likely to fail.
According to a survey by the Berkeley Institute of Governmental Studies (IGS), both ballot measures are in trouble: the tribal-led Proposal 26, which would only permit retail betting, is supported by 31% and opposed by 42%, while the business-led Proposal 27, which would allow online betting, is only supported by 27% and opposed by 52%.
“We’re definitely going to live to fight another day,” said FanDuel CEO Amy Howe at G2E, acknowledging that Proposal 27 might fail.
The failure of California sports wagering would be a significant setback for the industry.
Nevertheless, this was not the anticipated result.
This will be the consequence of a strategic blunder, one that will fracture the gaming sector, ignite fierce advertising battles, sully the image of sports wagering in the eyes of the electorate, leave many bewildered, and ultimately fail to exhibit the positive vision of its proposal.
The failure of Proposition 27 will be the result of a misinformation campaign that concealed its true objective and treated voters as a credulous group – a string of unnecessary missteps that will harm the sports betting industry for years to come.
The industry must engage in some serious introspection, exploring some fundamental inquiries. Where did things go awry? Why did this transpire? How can we improve in the future?
A Divided House
In the most favorable circumstances, commercial betting operators would face a challenging time competing with tribes, and in California, it proved insurmountable.
“They have been cautioned,” Victor Rocha, chairman of the National Indian Gaming Association, stated to The Washington Post.
“It’s like certain rules in the game, you know: Don’t gaze directly at the sun, look both ways before crossing the road, don’t meddle with California tribes.”
The truly astonishing aspect of the Berkeley IGS report is that voters exposed to more advertising were less likely to endorse either ballot proposition.
The fierce opposition to the campaign, particularly in its final phases, resulted in this outcome, a predictable consequence of an internal industry conflict. California industry advocacy groups spent a staggering $400 million solely to make voters more dubious about sports wagering.
The fact that Native American tribes opposed Proposition 27 was not a secret, a point the industry needed to acknowledge. The business-driven initiative could have been structured to accommodate tribal concerns.
In numerous states with substantial gaming tribes, the path to legalization often follows this pattern, with tribal access to the market constituting a crucial component of the legislation. Even if the two sides couldn’t reach an accord, failing to extend a gesture of goodwill prompted the tribes to retaliate with a robust and unified position that operators couldn’t match.
The tribes appeared to triumph in the advertising battle, effectively portraying the commercial sector as a collection of out-of-state corporate entities conducting a deceptive campaign. Moreover, due to their focus on preserving the current state of affairs, the resources used to oppose Proposition 27 made it more challenging to simultaneously dedicate effort to promoting Proposition 26.
And it didn’t aid their cause that the tribes’ campaign against Proposition 27 wasn’t unfounded.
End homelessness initiative.
The California Proposition 27, labeled “California Proposition 27, Legalize Sports Betting and Homeless Prevention Fund Initiative,” is a proposition to make sports betting legal in California. The proposal includes a stipulation to allocate a portion of the income generated from sports betting to a fund intended to address homelessness. Homelessness is a widespread issue in California, worsened by the state’s escalating housing crisis, and allocating sports betting income to tackle this problem is indeed a praiseworthy objective. However, Proposition 27 is not solely the result of a campaign genuinely focused on addressing homelessness.
It has been observed that many advertisements promoting Proposition 27 barely mention sports betting, instead focusing entirely on the homeless fund. The main committee supporting the ballot initiative, “California Homeless and Mental Health Support Solutions Coalition, a coalition of housing and mental health specialists, concerned taxpayers, and digital sports entertainment and gaming companies,” suggests that the campaign is not entirely honest about its intentions.
Californians are skilled at recognizing when they are presented with false or incomplete information; they are practically experts in spotting insincere behavior.
If operators desire to succeed in their next attempt, they need to ensure they can defend sports betting on its merits, rather than concealing their true aims.
California Sports Betting: We’re Back
Operators have indicated their intention to try again in 2024 – they’ll have another opportunity next time.
Although the setback in this fight is discouraging, it also reveals the path to future triumphs. Initially, the California tribes are a formidable force that cannot be disregarded and must be approached with prudence. Ideally, they should be included in any accord.
Secondly, a compelling argument for your cause must be presented, emphasizing its advantages rather than concealing its true objectives. People find enjoyment in wagering, what’s the issue with that?
A union of tribal operators, launching a genuine, hopeful, and irresistible campaign would be a wise move – this is the trajectory the industry should follow if it desires to profit from sports betting in California.
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