History Of 2022 CA Sports Betting Election Battle: Part 2

Written By Matthew Kredell on December 16, 2022 - Last Updated on January 12, 2023
PlayUSA part 2 of four part series recapping 2022 CA sports betting ballot measures

Continued from Part 1.

Read more about the CA sports betting battle: Part 1 | Part 3 | Part 4

Tribal opposition fractures Prop 27 coalition

Ten weeks after filing their initiative, DraftKings and FanDuel made one last desperate pitch on their initiative at the Indian Gaming Association conference at Pechanga.

But Senior VPs Jonathan Edson of FanDuel and Jeremy Elbaum of DraftKings got the cold shoulder from tribal leaders, who left the room before their panel started.

Functionally, when there was no agreement reached with the big-money tribes to support Prop 27 or stand down, that’s when the proposition battle was lost.

The Prop 27 campaign pushed forward. But once the tribal opposition built up, not everyone was fully on board.

Some operators wanted to see the campaign through, believing that letting Prop 26 pass unchallenged would provide tribes time to work with providers to figure out how to run their own platforms and cut them out of the biggest sports betting market in the nation.

Others felt this wasn’t what they signed up for and stopped funding the initiative. To start, DraftKings, FanDuel and BetMGM each contributed $16,667,000. Bally’s, Fanatics, Penn National Gaming and WynnBET added $12.5 million each for a total of $100 million.

In the end, DraftKings and FanDuel twice increased their contribution to about $35 million each. BetMGM increased its contribution only once to $25 million. Penn National and Fanatics doubled their contribution to $25 million. But Bally’s and WynnBET stopped funding Prop 27 following their initial contribution.

Kim: “When it turned out differently from how we thought it would be, we took a step back and reassessed. This was supposed to be a complementary effort. It ended up being so the very opposite of that, and that was never our intention. When it became clear that’s what the situation had come to, we sort of backed off. We didn’t make our subsequent contributions.”

Reeg: “I know the people that wrote Prop 27 well. They have confidence in themselves and they’re in a very big hurry. I told them I was around for Prop 5 [1998] and everything that’s happened since, and the tribes are undefeated against people like yourselves in this arena. So you’re going to lose, I told them this.”

Mejia: “We would have liked them to say, ‘Let us know when you’re ready to do online sports betting in the future. We’re following your lead. We’re respecting that California is your state and the multiple votes in California supporting tribal gaming rights.’ None of that happened.”

Early advertising campaign put Prop 27 in a hole

Although Prop 27 appeared dead when it couldn’t get support from big tribes, tribes opposing the measure didn’t want to underestimate what operators were willing to spend to get online sports betting in California.

Two tribal coalitions formed in opposition to Prop 27, both originally meant to support their own sports betting initiatives. The Prop 26 campaign converted all its efforts toward defeating Prop 27. So too did the coalition led by San Manuel for a tribal-oriented online sports betting initiative that eventually didn’t obtain the needed signatures to qualify for the 2022 or 2024 ballot.

Each launched their opposition campaigns in March, before Prop 27 even had a number. In their own ways, each sought to get out in front of the expected operator advertising by establishing that Prop 27 wasn’t about providing money to the homeless.

The San Manuel coalition particularly spent big during this early period, with $36 million in media buy and voter contact spending during March-through-May. Its attacks focused on the online sports betting proposal coming from out-of-state corporations that will take 90% of the revenue out of state. The campaign used the tagline:

“They didn’t write it for the homeless, they wrote it for themselves.”

The Pechanga coalition focused on defining Prop 27 as an online sports gambling measure, and that online gambling was addictive and a threat to children.

Early spending by tribal opponents put the Prop 27 campaign in a difficult position before it even started. A poll funded by San Manuel in September 2021 showed 53% in support of Prop 27. But by the time the Prop 27 campaign launched in late June, the same pollsters showed it trailing by 23 points.

Brandon Castillo (Pechanga coalition campaign strategist): “We expected they were going to launch an advertising campaign in July and try to dress this thing up as a solution to homelessness. And we knew that if we got out there and beat them to the punch and framed this thing as basically an online gambling measure, it would be very difficult, and it turned out to be impossible, for them to dig out of that hole.”

Frank Sizemore (San Manuel chief of staff): “Our strategy was to get them early, and that’s what we did. They were a group that nobody knew. You go into a Costco parking lot, 75% didn’t know who DraftKings or FanDuel were. So we wanted to define them early. We spent $30 million from March to May, and that’s really where the election was won. They’re out-of-state corporations that are going to take everything out of state, and it’s a bad deal for California. We just continually hammered that throughout the summer.”

Operators begin campaign by claiming tribal support

In calling Prop 27 the California Solutions to Homelessness and Mental Health Support Act, operators showed their hand early.

But following the early framing by tribes, the sportsbooks curiously launched their campaign around having tribal support.

It was a bold claim after having struck out on getting support from big tribes. They went with it anyway, pointing to support from three rural tribes in northern and central California.

Not only was this easily countered by tribes, who ran a commercial simply scrolling through all the tribes opposed to the measure, but it rallied tribes on the sideline to the opposition.

Tribes that initially dismissed the proposition battle as not their fight didn’t like seeing billboards near their reservations claiming tribal support.

Castillo: “When they came out in July in their first round of advertising a bit unexpectedly talking about tribal support and how it’s going to help tribes, we had tribal leaders go on the air to clarify. But we also did candidly a very boring ad that just clarified this question of where tribes stand.”

Siva: “As soon as they put up that billboard trying to pit small tribes and big tribes, virtually all tribes saw what they were trying to do and swelled support against Prop 27. Tribes moved for unity, understanding what was at risk here and the length the other side will go to. It really helped solidify tribal opposition to their proposition.”

Operator campaign burns bridges with tribes

Once the message of tribal support failed to land, the operator campaign went after those big-money tribes they were trying to partner with in the early going.

A TV advertisement claimed:

“Wealthy tribes with big casinos make billions while small tribes struggle in poverty. … So who’s attacking Prop 27? Wealthy casino tribes who want all the money for themselves. Support small tribes. Address homelessness. Vote yes on 27.”

The commercial showed pictures specifically calling out Chairwoman Beth Glasco of the Barona Band of Mission Indians and Chairman Kenneth Kahn of the Santa Ynez Band of Chumash Indians.

More than anything else in the campaign, this made tribal leaders livid.

And small tribes, while they may not see eye-to-eye with bigger tribes on every issue and may feel unheard from time to time, are still going to side with other tribes over outsiders.

California’s wealthy gaming tribes share casino revenue with limited- and non-gaming tribes. And they have promised to increase that revenue share if and when sports betting is authorized in the state.

Mejia: “From my perspective, the biggest tactical mistake they made in the campaign was when they decided to attack tribes. I thought that was a real touchstone moment in the campaign, because what it did was help to unite the tribes and it crystalized that they are not friends. As much as they were trying to say they were friends, their actions spoke a lot louder than their words.”

Castillo: “As people who have done dozens and dozens and dozens of campaigns, we saw their advertising and were just sort of shaking our heads saying where are they going? What are they trying to do? First they started with tribal leaders trying to convince voters that this was good for tribes, then they started attacking our tribal leaders. … California tribal leaders are very well-respected among the voters. The fact that they took to TV, once their claims of tribal support weren’t landing, and started attacking tribes, not only did it coalesce the tribal community but voters started really figuring out where tribes stood.”

Continue reading Part 3 of the four-part series.

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Matthew Kredell

Matthew's reporting on the legalization of sports betting began in 2010 with an article for Playboy Magazine on how the NFL was pushing US money overseas by fighting the expansion of regulated sports betting. After graduating from the USC Annenberg School for Communication and Journalism, Matt started his career as a sportswriter at the Los Angeles Daily News. He has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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