Dems Play Losing Hand on Sports Betting
AG Rob Bonta’s opinion declaring online fantasy sports illegal is drawing an expected backlash.
SACRAMENTO, Calif. — On a list of California’s problems — homelessness, high crime rates, punitive taxes, poor infrastructure — the issue of online fantasy sports betting would probably rank around No. 172. That’s right after the problem of yellow-bellied marmots “wreaking havoc” on cars parked at Sequoia National Park (true story) to feed their antifreeze addiction. I don’t gamble or, excuse me, play games of skill for prizes, but it’s enjoyable and benign for the vast majority of participants.
Yet Democratic Attorney General Rob Bonta’s recent legal opinion on the issue has sparked an angry backlash, mainly from the young men who dominate the activity. One prominent Democrat, U.S. Rep. Ro Khanna of Santa Clara, was flabbergasted: “When you’re talking about dumb things the Democratic Party does, it’s like, ‘let’s go ban fantasy sports, and then let’s pay $20 million to understand why we’re losing young men.’ I mean, come on. And you wonder why we’re in the state we are as a party.”
Some reporters, such as the San Francisco Chronicle’s Joe Garofoli, also described it as a “bad bet,” especially given that even the last two AGs — Kamala Harris and Xavier Becerra, both of whom are known for their nanny-state tendencies — passed on similar requests. He found Khanna’s and Newsom’s reaction as a smarter approach. But the ruling certainly raises uncertainty — and assures more rounds of unnecessary legal wrangling.
The legality of fantasy sports betting is not an entirely partisan issue, of course. GOP Assemblymember Tom Lackey of Palmdale asked Bonta to provide clarity on the matter. Why bother sleeping dogs, especially when you can easily guess how they’ll react? And even Democratic Gov. Gavin Newsom went out of his way to disagree with Bonta’s opinion, and instead seeks a “collaborative” way forward, whatever that means.
The AG summarizes his view as follows: “California law prohibits the operation of daily fantasy sports games with players physically located within California, regardless of where the operators and associated technology are located. Such games constitute wagering on sports in violation of Penal Code section 337a.” As CBS News reported, a Sacramento judge said the opinion is “advisory only and does not carry the weight of law.” Nothing will apparently change for now, but “lawmakers could use the opinion as a basis to advance legislation” to implement a ban.
In fairness, the issue probably has more to do with the power of tribal gaming interests than partisanship. The tribes are well funded and major political players who have supported candidates on both sides of the aisle. Different tribes often battle with each other in the political process in what amounts to lucrative turf wars, even if they dress up the battles in terms of “tribal sovereignty” and self-help. The 2022 general election was ground zero for the last big battle over sports betting, with voters asked to consider two competing initiatives.
Proposition 26 would have legalized sports betting, but only at Indian casinos and racetracks, and imposed a 10 percent tax on the proceeds. It was supported by the 20-some tribes that would have benefited from the measure, whose PAC spent eye-popping sums to support it. It was mainly opposed by the card rooms given that — as part of their ongoing turf war with the tribes — the measure would have made it easier to put them out of business.
As the Orange County Register opined, “This is a raw money grab and has nothing to do with ‘self-reliance’ and ‘responsible’ gaming. We strongly support legalizing sports betting, but not by letting tribes crush their old and new competitors alike.” The newspaper called it “an audaciously cynical measure — an effort by tribes to give themselves virtual monopoly control of sports betting in what is likely to be the nation’s largest sports-betting market.” Votes rejected it with a 67 percent “no” vote.
Proposition 27 would have directly legalized online and mobile sports betting and diverted some of the proceeds to homeless funds. The tribes overwhelmingly opposed it, as did most of the state’s political establishment and media. Even those who supported legalized online sports betting complained that it was designed to only allow participation by the largest online gambling companies. Voters rejected it by an almost unbelievably large margin, with 82 percent voting “no.”
But, of course, the battle over this large of a betting market continues. The key legal issue now centers on the distinction between games of chance and games of skill, with the former illegal in California and the latter legal. A legal opinion provided on behalf of the fantasy sports company, PrizePicks, explains that the courts in other states (as well as Congress) generally determine whether the predominant factor is skill or chance as every game of every sort has some element of skill and luck.
They argue that fantasy sports are mainly determined by skill: “all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of individual athletes’ performance in multiple real-world sporting events.” Typically, “contestants select rosters comprising real-world athletes and, using their own skill and strategy, make predictions about how those athletes will perform in certain statistical categories.”
Similar to common office fantasy sports leagues, these “were specifically designed to be a social engagement platform for casual sports fans to compete.” The platforms collect an entry fee and pay out predetermined prizes based on the competitors’ success. It’s not everyone’s cup of tea, but the AG certainly is missing the point — and flubbing a major political opportunity in the process. The tribes are happy about the opinion, but Democrats need to consider whether young voters or old-line interest groups matter more.
Or, maybe, state Democrats can just put the politics aside and do the right thing by leaving Californians alone for a change. The Democratic leadership can pass legislation that fixes the issue — and still have enough time left over to address our actual problems. Not that I would bet on that.