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Filip Mishevski September 1, 2021 5 min read
New Gaming-led Measure in California to Fund State Health Programs
Some of the biggest gambling players are planning to create an initiative that will fund mental health efforts and homelessness. This initiative concerns online sports betting and it is likely to be around $100 million. These gambling players spoke to POLITICO this past Monday, and they said that they will have the state attorney general’s office help them file the California Solutions to Homelessness and Mental Health Support Act. The act was backed by the likes of BetMGM, DraftKings and FanDuel, among others.
According to Dana Williamson, the campaign manager, these companies were scheduled to create a campaign committee yesterday. Dana Williamson is a political strategist with tons of experience and is Gov. Jerry Brown’s former advisor.
The Act Will Raise Hundreds of Millions of Dollars Each Year
After the ruling of the US Supreme Court back in 2018, 21 states, as well as the District of Columbia and Puerto Rico, consider online sports betting legal. However, the ballot measure in California would be the nation’s first in dedicating revenue streams for mental health programs and homelessness. This revenue stream is permanent.
In a statement to POLITICO, Williamson said that permanent funding sources are the key to finding permanent solutions. Hence, the California Solutions to Homelessness and Mental Health Support Act will fight homelessness and provide mental health support in the state by raising hundreds of millions of dollars each year. It will do that by allowing regulated operators to provide safe online betting services.
The best part about it is that the potential is huge. The online sports betting industry is growing – Illinois recently became the quickest US state to reach a $5 billion handle, and, according to Forbes – the total revenue that the online sports betting industry generated in 2020 was around $1 billion. Additionally, experts believe that, by 2023, the revenue will grow six-fold.
According to proponents, this measure does not conflict with the sports betting initiative by the gambling tribes in California that is headed to the ballot in 2022. The initiative by the gambling tribes would allow sports betting to take place in person at all tribal racetracks and casinos. Those that have backed the new proposal stated that the measure is complementary to the one of the tribal.
Tribal Communities Will Also Be Lifted
Williamson stated that tribal communities will also be uplifted due to the fact that any operator that wants to take part in the California market will have to partner with a tribe from the state. As for how the tribal communities will be uplifted, a part of the revenue will be dedicated to them.
However, this initiative might very well open a third front in the gambling sector. To qualify for the measure and ultimately have control over sports betting, Native American tribes have donated around $12 million. Card rooms are the second front, as they spent around $450,000 to pass a proposition that will give them a piece of the pie. These two parties have been in a battle to control the gambling sector for a long time.
Governor Newsom faces a risk of losing a majority of his supporters, which are Native American tribes, due to the fact that many of his consultants are actually connected to the new initiative. So far, Newson has raised roughly $60 million, $3.2 million of which come from the tribes, accounting for around 5%.
Williamson served as the cabinet secretary of Gov. Brown and he heads several powerful California players in politics to get this measure through the finish line. Some of those include Kamala Harris, Bearstar Strategies, which is Newsom’s political consulting team, as well as Newsom’s former communications director and the current anti-recall campaign spokesman, Nathan Click. Other backers include US Senator Alex Padilla, London Breed, the Mayor of San Francisco, and David Binder, the pollster for Barack Obama’s campaigns and Newsom.
The issue might be resolved in the state Capitol next summer with three separate proposals heading to the ballot. Lawmakers could come up with a measure that will prompt all race tracks, major sports betting brands, card rooms and tribes to withdraw their proposals. The waiting period would be until next fall, but the interest groups have been trying to pass their own bill versions through the Legislature for years, but with no success.
Even though it is still not clear how the revenue will be split between homelessness, mental health services, and tribes affiliated with online gambling companies, according to the initiative, 85% of that revenue will go to mental health and homelessness, while the other 15% will belong to the tribal communities, as stated by the proponents.
Sacramento Mayor Is Open To The Initiative
The Mayor of Sacramento, Darrell Steinberg, stated that the measure is welcomed. He spearheaded the initiative that increased millionaires’ income tax, which was used for mental health services in 2004, working as a Democratic assembly member. Steinberg stated in an interview that an initiative that dedicates hundreds of millions of dollars for the cause is a rare occasion. Fighting homelessness and giving money to mental health programs is the economy’s whim at the moment.
Parties that are concerned about the expansion of California’s gambling access could oppose the backers. However, according to proponents, online betting is only available to individuals who are older than 21 and, to enforce these restrictions, the most advanced technology will be used. Operators that willingly accept minors will face fines of up to $100,000.
The California Department of Justice will also have massive power in regulating online sports betting and making sure that there are no illegal activities in the market with the initiative, as stated by proponents.