Second Sports Betting Initiative Qualifies for 2022 Ballot in California

[NOTE: An earlier version of this post incorrectly stated California has “certified” the second sports betting initiative discussed herein. We have since updated the post to reflect that the second initiative merely secured enough signatures to qualify for the ballot and will officially be certified once the signatures are verified by the California Secretary of State]

On May 3, 2022, the backers of a second sports betting initiative announced they have secured the requisite number of signatures to qualify for the November 2022 ballot in California. As we reported in September 2021, the state previously certified an initiative proposed by 18 of the state’s federally-recognized Indian Tribes, which would allow for legalized retail, but not online, sports betting at the state’s tribal casinos and licensed racetracks (the Tribal Initiative). Two other initiatives were proposed — one by a group of California cities (the Cities Initiative) and another by a group of leading commercial online betting platform operators (the Operator Initiative). But only one — the Operator Initiative — secured the requisite number of signatures by the April 26 deadline. Assuming the signatures are verified by the California Secretary of State on or before June 30, the Operator Initiative will be “certified” (i.e., listed on the ballot).

If approved by voters in November, the Operator Initiative would amend the state’s constitution to (i) give the state’s tribes the right to offer online and retail sports betting and (ii) permit the Tribes to contract with commercial sportsbook operators to conduct online betting operations on the tribes’ behalf. The initiative would cap operators’ share of net online betting revenue at 40% and would limit the term of any agreement between a tribe and operator to seven years.

Article II of the California state constitution provides that to the extent two or more ballot measures approved at the same time conflict, the measure with the most votes shall prevail. The operators insist their initiative complements the Tribal Initiative, as it merely adds an online component to the retail betting framework set forth in the Tribal Initiative. They insist further that because the Tribal Initiative doesn’t specifically prohibit online sports betting, the measures do not conflict.

Proponents of the Tribal Initiative reject the notion the two measures are complementary, insisting the intent behind the Tribal Initiative is to limit sports betting exclusively to in-person wagers. Because the Operator Initiative permits online wagering, they maintain, the measures are irreconcilably different.

If both measures receive 50% or more approval from voters in November, it will likely be up to a California court to decide whether — and to what extent — the measures can co-exist.

We will continue to monitor the situation in California and provide further details upon any new developments.