Can online sports betting help the homeless? California mayors back ballot measure

The mayors of four big California cities are backing an online sports betting initiative that they say will help “countless Californians” struggling with homelessness by providing more state revenue for housing.

Sacramento Mayor Darrell Steinberg, Fresno Mayor Jerry Dyer, Oakland Mayor Libby Schaaf and Long Beach Mayor Robert Garcia on Tuesday announced their support for a measure that would allow Californians to bet on sports games online. The proposal was introduced in August and is backed by major sports betting operators, including DraftKings, FanDuel and WynnBET.

The proposed initiative would use tax revenue from online sports betting to fund permanent shelter and housing for homeless people and expand mental health and addiction treatment services. It’s one of three sports-betting related ballot measures Californians could see in 2022.

The act will raise “hundreds of millions of dollars” for services, according to the campaign, and spending will be subject to audits and “strict oversight” to ensure money is spent for its intended purposes.

Homelessness is a pervasive problem across the state. California’s 161,000 homeless residents make up more than 27% of the total homeless population in the country, according to the U.S. Interagency Council on Homelessness.

“Instead of leaving funding for homelessness and mental health services up to the whims of the economy, this initiative will create a stable and reliable funding source to tackle these immense challenges,” Steinberg, a Democrat, said in a statement. “If passed, this initiative will help countless Californians in times of crisis.”

Dyer, a Republican, said the state needs to think both creatively and long-term to address the homelessness crisis.

“This initiative helps do that by generating hundreds of millions of dollars in badly needed revenue -- without raising taxes on residents,” Dyer said in a statement. “Here in Fresno, and in communities across the state who are looking for ways to house their most vulnerable residents, this ongoing revenue stream will help us craft the critical long-term solutions needed to end homelessness.”

Several advocacy groups also backed the proposal, including All Home, the Regional Task Force on Homelessness for the San Diego area and the United Way of Greater Los Angeles.

Under the proposal, 85% of revenue would go to a new dedicated fund for homelessness and mental health, and the remaining 15% would go to the existing Tribal Economic Development Account.

Funds in the homelessness and mental health support account would be made available to cities, counties and regional or local groups that serve homeless populations for the purpose of providing permanent and interim housing. The measure stipulates that no more than 40% of the funds in the account shall be used for interim housing.

32 states allow sports betting

The U.S. Supreme Court in 2018 overturned a federal ban on sports betting, opening the gates for states to legalize the practice. If California passed the initiative, it would join 32 other states that have legalized sports betting in the last three years, including 21 that approved online wagering.

Sports betting operators have already put up $100 million to back the measure. Advocates argue that unregulated and untaxed online sports betting is already happening throughout California on the illegal, offshore market without any consumer or responsible gambling protections.

The measure requires sports betting operators to partner with a California gaming tribe in order to operate in the state.

Multiple initiatives aiming for California ballot

Supporters argue the measure complements another 2022 ballot initiative introduced by tribal leaders earlier this year, which would legalize retail sports betting at tribal casinos and horse racetracks, but not online.

The tribal-backed measure, known as the California Legalize Sports Betting on American Indian Lands Initiative, has already qualified for the ballot. It would allow sports betting outside of tribal settings, but apply a 10% tax on profits derived from sports betting at horse racetracks, to be divided among the state’s Department of Mental Health, Bureau for Gambling Control, and General Fund.

Voters could also see a third sports-betting measure on the November 2022 ballot, which would legalize in-person and online sports betting through American Indian tribes, licensed racing associations, state-licensed gaming establishments (like poker parlors) and professional sports team leagues.

The initiative will require nearly 1 million signatures in order to appear on the 2022 ballot. If voters approve the measure, betting could take place as early as 2023.