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2 California initiatives would legalize sports betting at tribal casinos and online

ARI SHAPIRO, HOST:

The largest expansion of sports betting in America is on the ballot this November. California voters will see a pair of dueling initiatives to legalize it there. The campaign has sparked historic spending from tribal gaming groups and national betting companies. From member station KQED, Guy Marzorati reports.

GUY MARZORATI, BYLINE: For months, it's been hard to watch TV in California without hearing about sports betting.

(SOUNDBITE OF MONTAGE)

JOSE MOKE SIMON III: ...Supports California tribes like ours...

UNIDENTIFIED PERSON #1: ...Solutions to the homelessness crisis...

UNIDENTIFIED PERSON #2: ...Tribes overwhelmingly oppose Proposition 27...

UNIDENTIFIED PERSON #3: ...Written and funded by big out-of-state gambling...

MARZORATI: One ballot campaign is the most expensive in U.S. history. And together, supporters and opponents of the two props on the ballot have raised more than $400 million.

DANIEL WALLACH: California is poised to basically be the gold standard and the holy grail of U.S. sports betting markets.

MARZORATI: Daniel Wallach started the Sports Wagering and Integrity Program at the University of New Hampshire Law School. He says the record spending is an indication of how much both sides have to gain, as legalization could mean billions of dollars of wagers every month. But Propositions 26 and 27 offer two paths to a betting bonanza.

WALLACH: What's at stake for Californians is a stark choice in contrast between two entirely different systems of sports wagering.

MARZORATI: Prop 26 is backed by the state's Native American tribal governments. It would legalize sports betting at tribal casinos where other forms of gambling are already allowed. Jacob Mejia represents the Pechanga tribe in Southern California.

JACOB MEJIA: If you think about where tribes are located, they tend to be in rural areas - rural parts of the state that, frankly, need as much economic development as they can get.

MARZORATI: Mejia argues that tribes have been responsible stewards of slot machines and card tables and that rights for sports betting should be expanded to these communities with deep roots in the Golden State.

MEJIA: California has been home to tribes for thousands and thousands of years. They aren't going anywhere.

MARZORATI: On the other hand, Prop 27 would legalize online betting, allowing Californians to wager on sports from their computer or phone. Prop 27 spokesman, Nathan Click, is quick to tout that the measure taxes betting revenue and earmarks that money for homeless services.

NATHAN CLICK: ...To help build more housing, help finance more housing, help create mental health services that help get folks off the streets and into housing.

MARZORATI: But the companies bankrolling Prop 27, like betting giants DraftKings and FanDuel, see a potential goldmine in California. The campaign wouldn't make any of those companies available for an interview, but Peter Jackson, CEO of FanDuel's parent company, talks about opportunities for growth on a call with investors last month.

(SOUNDBITE OF ARCHIVED RECORDING)

PETER JACKSON: Clearly, the big one is California. Look, it's worth fighting for, the fifth-largest economy in the world, but it's going to be a tough fight.

MARZORATI: And likely an uphill fight, with recent polling showing most voters oppose the online betting measure. The ballot fight is the result of years of gridlock on betting policy in the state legislature. In true California fashion, both sides decided to take the issue directly to voters. Timothy Fong, co-director of the UCLA Gambling Studies Program, argues there's reason to be wary of what's happened in the nearly three dozen states that have legalized sports gambling.

TIMOTHY FONG: We know that in states that have more sports betting, they have had more calls to the help lines regarding gambling problems.

MARZORATI: Many political analysts say the record spending on both propositions could end up turning voters off to both measures. One safe bet is that this issue is not going away in California, as another proposition to legalize sports betting could go before voters here again in 2024.

For NPR News, I'm Guy Marzorati in San Jose. Transcript provided by NPR, Copyright NPR.

Guy Marzorati