A Tale of 2 Tech Ballot Measures: California Propositions 27 and 30

In this upcoming midterm election, two of the seven measures on the Nov. 8 ballot could heavily impact the tech industry in Los Angeles. They are propositions 27 and 30.

Here’s what you need to know.

Proposition 27 - Online Sports Betting

What is it: The initiative would legalize online and sports betting outside of tribal lands. Sports betting is currently legal in roughly 30 states and California isn’t one of them. According to state law, gambling in California is limited to tribal lands, the state lottery, card rooms and horse betting at race tracks.

Why does it matter: Los Angeles is home to 14 major sports teams, which play close to a thousand games a year. Prop 27 would allow adults 21 years or older to place bets on sites like DraftKings while still prohibiting online sports betting on youth sports. If the measure passes, it would establish the California Online Sports Betting Trust Fund (COSBTF) and the revenue from licensing fees, renewals and the sports wagering tax would then be deposited into the fund. 85% of the fund's revenues would be allocated to California Solutions to Homelessness and Mental Health Support Account for permanent and interim housing, while the other 15% will go towards the Tribal Economic Development Account.

Who supports it: Californians for Solutions to Homelessness and Mental Health Support, Long Beach Mayor Robert Garcia and Major League Baseball are some of the supporters. The top three donors to the campaign come from BetMGM LLC, Betfair Interactive US LLC (FanDuel Sportsbook) and Crown Gaming, Inc. (DraftKings) with a total of $169.2 million.

Who opposes it: Californians for Tribal Sovereignty and Safe Gaming and Coalition for Safe, Responsible Gaming led the campaign in opposition to the initiative. Collectively, the organizations pooled in $214.6 million.

In total, lobbying groups in California have spent $362 million on Prop 27, making it the most expensive piece of legislation in the state’s history. A poll by UC Berkeley Institute of Governmental Studies found that only 27% of voters support Prop 27, while 53% are opposed.

Impact on Los Angeles: If Prop 27 passes, the online sports betting market in California would bring in an estimated $2.8 billion in annual revenue, according to the Eilers & Krejcik Gaming report. While this could rake in a ton of cash for the state, experts warn that online sports betting could increase gambling problems and gambling addiction within the community. Last year alone, the National Problem Gambling Helpline Network received 45% more calls and texts than the year prior.

Proposition 30 - Electric Vehicle Subsidies

What is it: This measure will require those that make above $2 million each year to pay an additional tax of 1.75% on their income that would go to state programs combating the effects of climate change. Zero Emission Vehicle (ZEV) programs would receive 80% of the tax, with the other 20% going to wildfire response and prevention activities.

If passed, the bill would go into effect in January 2023 with an expiration date of January 2043.

Why does it matter: The state recently committed to spending $10 billion over the course of five years on ZEV infrastructure. If passed, the measure would increase state funding for the clean energy initiative by $2.8 billion which will amount to $4 billion annually.

According to a new report by the American Lung Association, Los Angeles, which is currently the most pollution-burdened city in the country, would see the most significant health benefits from a transition to zero-emission trucks.

The initiative also aligns with the recent state mandate which indicates that all ride-sharing companies such as Uber and Lyft use electric vehicles and hydrogen fuel cars by 2030 in an effort to reduce greenhouse gasses that contribute to climate change.

Who supports it: Lyft, Clear Air California, California Environmental Voters and the California Democratic Party are all supporters of the measure and have raised $37.1 million in contributions, with Lyft being the biggest contributor at $15 million.

Who opposes it: Gov. Gavin Newsom (D), the California Teachers Association (CTA) and the Republican Party of California all oppose this measure.

In a written statement on the CTA website, Newsom said “Prop. 30 is a special interest carve-out — a cynical scheme devised by a single corporation to funnel state income tax revenue to their company.” Though his basis in making such a claim is unclear. What is clear is that California has some of the highest personal income tax, gas tax and sales tax rates in the country. As such, opponents say that if passed this measure would bump the tax rate for those making above $2 million each year, already the highest in the nation, to 15.05%.

Impact on Los Angeles: Since many EV companies are based in Los Angeles, including Fisker, Rivian and ChargeNet Stations, the revenue garnered from taxes that would be collected if Prop 30 passes could make EVs more affordable for middle- to low-income families and build more charging stations.