DraftKings, FanDuel, BetMGM Join Forces for California Mobile Betting Initiative

  • The US gambling giants have teamed up to get mobile betting on the 2022 ballot in California
  • The initiative would work in tandem with a proposal backed by 18 tribal nations for retail betting
  • Four California cities have also proposed an initiative for retail and mobile wagering
  • Under the operators’ proposal, California will have a competitive market with a 10% mobile tax
California road sign
In California, DraftKings, FanDuel, and BetMGM have put their weight behind a new mobile betting initiative in the hope of getting the proposal on the state’s November 2022 ballot. [Image: Shutterstock.com]

A group effort in California

DraftKings, FanDuel, and BetMGM are more used to competing against each other than working together. However, the US gambling giants have decided to join forces for a campaign aiming to bring online sports betting to the state of California.

the California Solutions to Homelessness and Mental Health Support Act

The three sports betting companies are the main proponents in a new digital betting initiative which aims to provide funding for homelessness and mental health efforts. Together, the gambling firms have contributed $100m toward the campaign for the California Solutions to Homelessness and Mental Health Support Act (CSHMHSA).

As reported by Politico, the operators have established a campaign committee headed by manager Dana Williamson, who confirmed their plans to file the act with the state attorney general’s office on Tuesday. If it receives enough signatures, the initiative will make it to the November 2022 ballot.

Multiple initiatives in the running

More than two dozen states across the US have now introduced legal sports betting since the repeal of the Professional and Amateur Sports Protection Act in 2018. With its population of more than 39 million, California is one of the most highly-coveted states yet to introduce legal wagering.

That could all soon change, though. With this latest initiative backed by DraftKings, FanDuel, and BetMGM, the state of California may have as many as three betting measures up for vote on the November 2022 ballot. Williamson, manager for the operators’ campaign, told Politico that the measure will work in tandem with a betting initiative backed by 18 California tribal nations.

The tribal initiative is the only betting measure already approved for the mid-term ballot. It would legalize retail wagering only at tribal casinos and four horse racetracks. Meanwhile, the CSHMHSA would legalize internet wagering on professional, collegiate, and amateur sports. “Any online sports betting operator seeking to participate in the California marketplace must do so by partnering with a California tribe,” Williamson explained.

Added to this, another proposal backed by a group of four California cities is also aiming for the November 2022 ballot. It would legalize mobile wagering statewide along with retail betting at tribal casinos, horse racetracks, card rooms, and professional sports stadiums. Unlike the tribal proposal, this initiative has not yet received enough signatures to gain approval.

What might the market look like?

If DraftKings, FanDuel, and BetMGM have their way, California will introduce an open and competitive mobile wagering market. The proposal does not mandate the use of official league data and sets a tax rate of 10%. Similarly, the tribal initiative would set a retail sportsbook tax of 10% for horse racetracks.

an initial fee of $100m for five years

In terms of the number of licenses, the proposal does not include any cap. However, operators would have to partner with one of the state’s tribal casinos to take bets. California has around 70 casinos run by more than 100 federally recognized tribes. To enter the market, the operators have proposed an initial fee of $100m for five years and $10m for a tribe to offer mobile wagering on its own.

Speaking with Politico, Williamson made clear that the new market will aim to “raise hundreds of millions of dollars” annually to fight homelessness and expand mental health support in California.