Written by Nadia Innab

While most of the highest spending races held national importance with the potential to sway control in Congress, two of the most expensive races we recorded this cycle were California Ballot Propositions. Propositions 26 and 27, which aimed to legalize certain forms of sports betting and online gambling in California, pooled in $331M in total ad spend. Proposition 27 saw the third most spending of any race or issue this cycle, trailing only Georgia and Pennsylvania’s high-profile Senate races. Proposition 26 was the 27th most expensive race of this election. Gaming proposition spending was the highest issue in terms of political spending this year, as mentioned in our previous post on state ballot initiatives.

While both gaming propositions were struck down, groups supporting and opposing the two gaming ballot props spent 70% of the total money spent across nine California ballot propositions. The seven other propositions combined saw $145M.

Proposition 26, which would legalize sports betting for people over 21 on tribal lands and horse-racing tracks and require a 10 percent tax on sports betting winnings at horse-racing tracks, saw $57M in gaming proposition spending.

We tracked two advertisers spending on Proposition 26. The group “No on 26 – Taxpayers Against Special Interest Monopolies” spent nearly $40M on ads opposing the ballot prop. The group “Yes on 26, No on 27 – Coalition for Safe Responsible Gaming” spent $17M in support of Proposition 26.

Despite the $17M placed in support of Proposition 26, 67 percent of voters voted no on the ballot prop, resulting in its failure. Just under 30 percent of total money placed was in support of Prop 26, and 33 percent of voters responded Yes on the ballot.

Ads from “No on 26” focused on the effect that online gambling would have on adolescents, warning of its dangers. “Yes on 26, No on 27” aired ads that highlighted the special interests behind the support of Prop 26. The difference in subject matter between the two advertisers chose to highlight could have swayed voters’ choices.

Proposition 27 would have allowed sports betting for adults ages 21 and older on websites that have agreements with Native American tribes and imposed a 10 percent tax on revenues from sports betting. It recorded the third most money of any 2022 race, totaling over $274M.

We recorded gaming proposition spending from three advertisers, two of which were in the top ten highest spending advertisers of 2022. The group “Yes on 27 – Californians for Solutions to Homelessness and Mental Health Support” spent $121M on ads in favor of the ballot proposition. They were the fifth highest spending advertiser of the 2022 cycle, trailing only Senate Leadership Fund, Congressional Leadership Fund, Senate Majority PAC, and House Majority PAC (all of which spent in multiple races across the nation). Californians for Tribal Sovereignty and Safe Gaming was the ninth highest spending advertiser of the 2022 cycle, totaling $94M.

While Yes on 27 was the only group spending in support of the ballot proposition, they made up over 44 percent of the total spending. Californians for Tribal Sovereignty and Coalition for Safe Responsible Gaming totaled $153M in spending. Voters overwhelmingly voted No on the proposition, with just under 18 percent of voters responding Yes, resulting in a failed ballot proposition.

Yes on 27 focused their ad content on the benefits of online sports betting for sports fans and the potential resources generated by the Proposition to combat California’s homelessness crisis. They also spent almost $3M on an ad that criticized Prop 26 and lifted Prop 27. On the other hand, Californians for Tribal Sovereignty highlighted the profits that out-of-state corporations would earn from the passing of Prop 27.

Advertisers began spending back in March 2022, however, their ads did not mention specific propositions until the props were introduced; specific propositions were first mentioned in an ad on July 11, which began gaming proposition spending. An ad from Coalition for Safe, Responsible Gaming, first airing in March, warned California voters of Gaming Propositions that could be on the ballot in November.

Before July, Yes on 27 had spent just over $3M. They ended up spending $118M between July and November. Although they only started ramping up their spending in July, several months after other advertisers, they still became the highest spending advertiser between the two propositions by over $30M. Californians for Tribal Sovereignty, on the other hand, had spent over $27.5M on ads opposing Prop 27 before July 1. The longevity of ads airing against the propositions may have had an impact on voters’ decisions.

Before the election, Proposition 26 was showing 31% support and Proposition 27 had just 27% of voters in support. Nevertheless, advertisers continued to pour money into both propositions. It appears voters had made up their mind prior to the election and whether ad content influenced voting decisions is up for debate. Many believe the fight to allow sports betting in California is far from over, and we expect to see spending on additional Gaming Propositions during the 2024 election cycle.