Unprofitable public companies gambled more than $200 million in California, and lost big
Other public firms believed they had the power to enact legislation in the Golden State after Uber Technologies Inc. and Lyft Inc. spent a record amount of money on a California ballot issue two years ago, which they ultimately won.
They bet big money on the recent primary election for the fifth-largest economy in the world. They also lost. Big.
The majority of the $217 million spent by public firms on the two failed ballot initiatives in California's election last week went toward the enormous failure to legalize online gambling.
Data from the California Secretary of State's website tracking campaign contributions shows that online gambling corporations contributed the most money to Proposition 27, contributing a total of $169 million.
Due to the overwhelming failure of Proposition 27, which tried to legalize sports betting in California, the online gaming sector spent nearly $108 per vote to get 1.6 million "yes" votes.
The initiative was one of California's most dramatic electoral defeats, losing with 83% of the vote. That astounding per-vote spending information was first analyzed by The Mercury News.
You guessed it: online gaming businesses provided the majority of the funding for Proposition 27, which attempted to legalize online and mobile sports betting for those who are at least 21 years old and to establish rules for the mobile sports betting industry. $34 million overall was spent by DraftKings Inc., $17 million of which was spent in 2022.
Executives from the corporation stated on the company's third quarter earnings conference call earlier this month that the company had stopped investing in the initiative after it was evident from poll results that it would not pass in California.
FanDuel, which contributed $35 million, BetMGM, a division of MGM International, $25 million, FBG Entertainment, $25 million, Penn Entertainment, Inc., $12.5 million, casino operator Bally's Corp., and WSI, a division of Wynn Resorts Ltd., each contributed $25 million.
The proposal called for a 10% tax on betting, with funds going to programs for gambling addiction and homelessness, as well as 15% going to Native American tribes who don't participate in sports betting.
With the assistance of rival Uber, Lyft was able to pass Proposition 22, so it decided to try again with Proposition 30, which suggested an additional 1.75% tax on anyone making $2 million or more yearly.
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