California’s Proposition 27 campaign this week put forward an ad attempting to clearly define what it stands for — supporting an answer to homelessness and “disadvantaged tribes.” But the tone of the ad shows that the campaign is ramping up efforts to not just get its initiative passed, but to keep Proposition 26 from getting votes.
Though the ad does not clearly suggest a “no” vote on Proposition 26, it does use the word “no” in relation to the tribal-backed proposal throughout the 30-second spot.
Proposition 26, backed by the bulk of California’s tribes, would allow only for in-person wagering at tribal casinos and four horse racetracks. It would also allow for certain ball-and-dice games and change the way gaming lawsuits are handled. Proposition 27 would legalize statewide mobile gaming and require that platforms be tethered to tribal casinos. The two could both be approved and implemented, with each needing 50% “yes” votes to pass.
When seven commercial companies — Bally’s, BetMGM, DraftKings, Fanatics, FanDuel, PENN Entertainment/Barstool Sportsbook, and WynnBET — started on the road to legal sports betting in California, they did so by tying their hopes to key causes in California: homelessness and mental health.
Called the “California Solutions to Homelessness and Mental Health Act,” the initiative didn’t even mention wagering in its title when it was filed. The campaign said it did significant research showing these are two key issues for voters. But when the campaign got approval for the ballot and began releasing ads, the focus was more on tribes than homelessness and mental health issues.
The latest ad marries those issues while also lashing out at Proposition 26.
“The choice between Prop 26 and 27? Let’s get real,” says the narrator. “Prop 26 means no money to fix homelessness, no enforcement oversight, and no support for disadvantaged tribes. Yikes. Prop 27 generates hundreds of millions toward priorities like new housing units in all 58 counties. [Proposition] 27 supports non-gaming Tribes and includes strict audits that ensure funds go directly to getting people off the streets and into housing. There’s only one choice: Yes on 27.”
The commentary is over a backdrop that colors Proposition 27 green and Proposition 26 red. It includes depictions of tents and communities of the homeless, construction of affordable housing, and a group of tribal members.
Tribal donation + No on 27 ad = bad look
The ad came out one day before the San Francisco Chronicle reported that an anti-Proposition 27 advertisement featuring the executive director of a domestic violence facility received a $50,000 donation from the San Manuel Band of Mission Indians, which owns and operates the Yaamava Casino Resort near San Bernardino. The story states that while no campaign laws appear to have been broken, the timing of both the ad and donation could bring questions. The tribe, according to the story, has donated to the facility in the past, and on Aug. 8 made a total of $400,000 in donations to eight organizations.
But so far, the only one featured in an ad opposing Proposition 27 is Desert Sanctuary, the domestic violence facility. In the ad, Peggi Fries says, “Don’t let corporations exploit homelessness to pad their profits.” The tribes have focused their “No on 27” campaigns on contention that “out-of-state corporations” have been dishonest and will reap most of the profits from sports betting.
The ad is one of several in which “No on 27” pushes forward the idea that most of the profit from wagering would go to the companies running it, though that is the case for any commercial venture. The initiative proposes a 10% tax rate, which is in line with what many states tax sports betting companies. For comparison, should Proposition 26 pass, the tribes won’t be taxed for sports betting — though as a group, they regularly give back to the state through donations and services — while the four horse racetracks will be taxed at 10%.
Sources told the Chronicle that there doesn’t appear to be anything illegal going on, but that the timing of the donation and the ad could cause voters to question the situation.
“The concern here is this question of timing,” John Pelissero, a senior scholar at the Markkula Center for Applied Ethics at Santa Clara University, told the Chronicle. “You have money going to the domestic violence group, and then a spokesperson for them coming out and saying, ‘I don’t think this is a good idea to support this.’”