California, with a population of 39.2 million, is the most populous state in the US and boasts the fifth largest economy worldwide. However, despite its wealth and influence, the state’s sports betting proposals are expected to fail. Both ballot initiatives, Proposition 26 led by tribes for retail betting and the commercial-led effort allowing online betting, have low support according to polling by the Berkeley Institute of Government Studies (IGS).
Proposition 26 has 31% in favor and 42% against, while the online betting proposal has only 27% in favor and 52% against. The failure of these initiatives can be attributed to a poorly conceived strategy that divided the gaming industry and resulted in a divisive ad war. The negative campaign eroded public support and failed to effectively convey a positive vision for sports betting.
This failure will have significant consequences for the industry, and it is important to understand what went wrong and how to improve for the future. The gaming industry must address fundamental questions, learn from this experience, and find ways to collaborate rather than compete.
This was evident in the battle between commercial gaming operators and tribes. The tribes are a formidable force in California, and disregarding their interests proved to be a critical mistake. The industry should have considered accommodating tribal interests to increase support for their proposals.
Another issue was the negative nature of the campaign, with millions of dollars spent by the industry to make voters skeptical of sports betting. The tribes successfully portrayed the commercial sector as out-of-state corporate interests running a deceitful campaign. Moreover, the focus on defending the status quo against Proposition 27 limited resources available to promote Proposition 26.
The campaign for Proposition 27 highlighted its goal of contributing to homelessness prevention funds, which is a crucial issue in California. However, many of the ads barely mentioned sports betting, leading to criticism of the campaign’s honesty. To be successful in future attempts, operators need to make an honest and positive case for sports betting, clearly stating their intentions.
Despite the failure of the current campaign, operators are already planning to try again in 2024. The lessons learned include acknowledging the powerful influence of gaming tribes and working towards an inclusive agreement. A transparent and optimistic campaign that highlights the enjoyment of betting could be the key to success in California’s sports betting industry.
