Jonathan Kraut | Handicapping the Dueling Gaming Props

Jonathan Kraut
Share on facebook
Share on twitter
Share on email

This November we have seven ballot initiates to consider. In a few weeks, most Santa Clarita Valley voters will receive a mail-in ballot at home. It is not too soon to start forming your choices. 

Ad spending on Propositions 26 and 27 have already exceeded $130 million. We have been bombarded with pronouncements that Prop. 27 funds are to cure homelessness and help all native tribes. We have also witnessed representations that some tribes are for Prop. 26 but against Prop. 27.  

Anti-27 ads claim 90% of the profits from 27 go out of state and pro-27 ads claim smaller tribes get free money if 27 is passed. 

These messages are clearly deceptive about both Propositions 26 and 27, so I wish to illuminate what I found out.  

Prop. 26 amends the state Constitution to permit Las Vegas-style gambling, i.e. games of chance such as dice games and roulette, on tribal lands.  

Specifically, this proposition also allows on-site sports wagering at only privately operated horse-racing tracks in four California counties. The proposal would permit an assessment of 10%, a tax, on sports-wagering profits at horse-racing tracks and would earmark a nominal amount to gaming enforcement and gambling addiction rehab programs. 

Bottom line: Prop. 26 expands tribal casino games, assesses a tax on “profits,” whatever that means, and benefits some horse racetracks. This measure specifically is carved out to benefit several selected entities with new revenue opportunities and continues to restrict these benefits to most other betting enterprises.  

Proposition 27 is a completely different measure that essentially asks to allow statewide online sports betting by any device like a cell phone, electronic tablet, or computer.  

Proponents of Prop. 27 are airing ads that the measure is about “funding a cure to homelessness” and giving money to non-gaming tribes.  

Curing homelessness and tossing some money to small tribes by design is a cunning way to divert from the true issue of sports betting. Make no mistake, Prop. 27 is only about legalizing sports betting statewide. 

If one digs deeper, it is apparent that Prop. 27 ads are fostering outright falsehoods.  

Proposition 27 would impose a general 10% tax on sports wagering. This tax, which is over and above an actual amount of profits, would remit 85% of this tax to existing government homelessness programs and 15% to non-gaming tribes. 

The Prop. 27 website states, “Prop. 27 guarantees hundreds of millions of dollars every year for permanent solutions to homelessness, mental health and addiction. Under Prop. 27, 85% of all tax revenue goes to fund solutions to homelessness, mental health and addiction.” 

Unlike the statements advocating Proposition 27, no new housing programs or funding a “cure to homelessness” can be anticipated. The permanent solution to homelessness is not by endless spending: the “solution” to homelessness, mental health and addiction is mandatory in-custody treatment in care facilities until these conditions are cured. Prop. 27 just gives money to existing impotent and futile programs.   

Despite billions already spent by government programs, there has been no significant impact on homelessness, and attempts to move homeless populations off the street voluntarily are a costly pure failure. Promising to spend more on what is not working is just a bribe, not a solution. 

In addition, ads against Prop. 27 state that 90% of the profits will go to out-of-state corporations. In reality, 100% of profits would go to the large betting operations like FanDuel and DraftKings, and just the 10% surtax would be doled out to government programs already flush with Measure H and HHH funds, and to a few smaller non-gaming native groups.   

Proposition 27 advocates also claim sports betting would have safeguards against under-aged betting. This purportedly is done by self-reporting the gambler is of age. Allowing a user to self-authenticate is absurd and offers no safeguards whatsoever. 

Prop. 27, if passed will have no meaningful impact on “funding a cure to homelessness” nor mental illness. The measure would also throw a little scrap bone to some smaller native tribes while hoarding billions for themselves.  

So, voting for Prop. 26 permits certain games of chance and sports betting at a few specific locations, allowing a few operations to make billions but not permitting the same option to other establishments.  

Voting for Prop. 27 should be for a simple reason — do you want to legalize mobile-sports betting, yes or no. 

I am voting no on both. I don’t want to reward  and further encourage special interests for manipulating public opinion and for making false narratives for personal gain. 

Jonathan Kraut directs a private investigations agency, is the CEO of a private security firm, is the CFO of an accredited acting conservatory, a published author, and Democratic Party activist. His column reflects his own views and not necessarily those of The Signal or of other organizations. 

Related To This Story

Latest NEWS