Since the U.S. Supreme Court ruled in 2018 that states can legalize sports betting, California — with 40 million people and numerous professional teams — has avoided the great white whale, gambling companies and tribal communities hosting casinos. According to an industry consulting firm, $3.1 billion in annual revenue is at risk.
It should come as no surprise that voters will face not one but two ballot propositions this fall aimed at taking over California’s sports betting market. Although neither seems to have strong public support, gambling addiction experts worry about one more than the other.
Proposition 26, backed by some of the state’s largest tribal casino owners, would allow sports betting, but only in existing brick-and-mortar establishments that already offer gambling and horse racing venues. In contrast, Proposition 27, designed and funded by national corporate gambling sites like DraftKings, FanDuel and BetMGM, would legalize online sports betting, essentially opening the door for people to bet on games — and athletes and sports among them — whether Why am I sitting on the bleachers or the sofa?
Each measure is likely to increase gambling and gambling addiction problems, but mental health experts say the sheer ease of online betting — scores, player point totals, the number of penalties in a game and almost everything associated with sporting events — increases the likelihood of trouble.
“You don’t get addicted to full-season fantasy football; You become addicted to in-game betting,” says Dr. Timothy Fong, a psychiatrist and co-director of the UCLA Gambling Studies Program. “Instead of a bet on the Rams-Chargers game, I can now earn an infinite amount of money from my phone.”
Sports betting is already legal in some form in 36 states and Washington, DC, and Michigan, Connecticut, New York and other states have called gambling hotlines after allowing gambling. The National Problem Gambling Helpline Network reported a 45% year-over-year increase in 2021, when 11 states went live with some new form of sports betting.
Although gambling addiction does not involve taking drugs or chemicals, it does involve stimulation of brain regions similar to other addictive disorders. The American Psychiatric Association classifies gambling, placing it in the same category as tobacco, alcohol, cocaine, marijuana, and opioids. Research shows that mesolimbic dopamine, which provides the brain with feelings of reward and pleasure, is released in greater amounts in pathological gamblers than in control groups. Gamblers get hooked on that prize.
For many states, the lure is clear: tax revenue. In 2020, Pennsylvania collected $38.7 million from gambling — three-quarters of that generated by mobile sports betting. California’s nonpartisan Legislative Analyst’s Office estimates the state would collect several million tax dollars each year, but no more than $500 million annually if Proposition 27 passes. The office set state revenues at ten million dollars a year from Proposition 26. Some of that money would come from a 10% tax on sports betting at racetracks, and some could come from tribal casinos, which would have to be renegotiated with the state.
For weeks, Californians have been bombarded by competing ads in what has become the nation’s most expensive ballot-initiative fight, at $400 million and counting. The fight could turn voters away. A recent poll by the UC-Berkeley Institute of Governmental Studies found 42% of likely voters opposed Proposition 26, compared with 31% in support. Support for Proposition 27 was even lower, with 53% of likely voters opposed and only 27% in favor.
Both ballot measures provide limited new resources to help people with gambling problems or addictions and do not require states to improve tracking or treatment.
The authors of Proposition 26 included a provision to send 10% of sports betting revenue from racetracks to state departments of public health, with a portion of that money earmarked for “problem gambling prevention and treatment,” according to the provision. KHN by supporters of the initiative. But racetracks have been in decline for decades, and their share of sports betting will be the smallest piece of the pie. Additionally, the amount that could be generated from tribal casinos is uncertain because it will depend on whether the new compact requires additional payments and direct funding to treatment programs.
Cathy Fairbanks, a spokeswoman for the Vote Yes on Proposition 26 campaign, noted that tribes already contribute about $65 million a year to state gambling control commissions, which fund the Office of Problem Gambling. “Before tribes started casino gambling in California more than 20 years ago, there was no dedicated fund for problem gambling,” Fairbanks said. Racetrack betting has been held in California since the 1930s, and the lottery began in 1985.
Proposition 27 requires participating companies to pay 10% of gross gambling revenue to the state. Of these, 85% will be designated for homeless and mental health programs, including for problem gambling.
Nathan Click, a spokesman for the Yes on 27 campaign, said the initiative would enact “the strongest problem gaming safeguards for online sports betting in the country” and require employees at each authorized gambling platform to be trained on how to spot problem gambling.
But psychologists say online betting is instant, accessible and almost effortless. Anyone with a phone, tablet or computer can get started with a credit card And there is virtually no limit to the amount of bets that can be placed on a single game even while playing the game.
“People don’t get addicted to Mega Millions,” Fong says. “They become addicted to scratchers with more bets per minute.”
One way the gambling industry entices people to keep playing is through promotional credits that essentially allow them to start betting without spending their own money. Rick Benson, founder of Algamus Gambling Treatment Services, said “free play” offers are not only common in casinos but also heavily marketed on websites and social media, potentially luring new gamblers into thinking they have nothing to lose.
This makes Proposition 27 a major concern. Researchers at McGill University and the Oregon Research Institute found that online gaming is a gateway to behavioral disorders, including problem gambling, characterized by continued gambling despite negative consequences in a person’s life, or outright addiction, which is out of control. Gambling can lead to harmful outcomes, such as bankruptcy, mental health and family problems, and substance use.
Because Proposition 26 restricts betting at casinos and racetracks, it can regulate activity. “Studies have shown that gambling participation is linked to access in some way,” said Robert Jacobson, executive director of the California Council on Problem Gambling. “Participation rates go up when people are within 50 to 60 miles of a casino.”
Still, it’s not clear how Proposition 26 will affect gambling because the provision clears the way for the addition of Las Vegas-style games such as roulette and craps to tribal casinos.
It’s also unclear how big a problem gambling addiction is in California, largely because the state’s Office of Problem Gambling hasn’t updated its data since 2006. In August, a state audit declared that the office, which has an annual budget of about $8.5 million, “did not effectively evaluate its programs.” The office does not know how many California residents have experienced or recently had a gambling problem
Addiction researchers, however, believe the problem remains consistent, with about 4% of residents experiencing gambling or gambling addiction. That equates to about 1.6 million Californians who may have a gambling problem, although the number could be much higher because fewer than 1 in 10 people with a gambling disorder seek treatment.
The two initiatives would amend the constitution to allow the legislature to create new sports betting laws. State agencies would then have to come up with regulations to implement sports betting, which experts say could be played for the sake of gambling.
“The vote,” Jacobson said, “is just the tip of the iceberg.”
This story was produced by KHN, which publishes California Healthline, the editorially independent service of the California Health Care Foundation.
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