Would the Legalisation of Gambling Help Curb California’s Homelessness Problem?


Californians were asked the question

The question of whether the legalisation of gambling would help curb California’s homeless problem being asked now could be regarded as locking the stable door after the horse has bolted. The issue has already been settled. Last November, Californians rejected the legalisation of sports betting in the state. And it was not a close call but an overwhelming rejection of initiatives put forward by Native American tribes and the gambling industry.

The proposals were some of the most expensive ballot propositions in the history of U.S. elections. Around $460 million was spent to persuade voters that expanding gambling in the nation’s most populous state would be beneficial. If the organisations behind the expenditure had really wanted to help people experiencing homelessness, it could be argued that they might have been better off donating the advertising spend directly to homeless initiatives.

Proposition 26 aimed to allow casinos and the state’s major horse racing tracks to offer sports betting in person. A coalition of first nation tribes put forward this proposal and would also have allowed roulette and dice games at casinos. In addition, it was proposed that a 10% tax would pay for a regulator to enforce gambling laws, create a regulated market and put programs in place to help people with gambling problems.

How can a regulated market be a benefit?


One of the advantages of a regulated gambling market is that the revenues raised can be used to fund good causes and infrastructure. The argument is that people will gamble on off-shore platforms regardless of the legality. For example, people find online casinos that accept bank accounts or credit cards, open an account and play. However, there is no regulation and no protection for players. In addition, the state does not have any revenue share.

It was Proposition 27 that promised to funnel tax revenues to help the homeless, mentally ill, and poorer first nation tribes. It was promoted very much on this platform. Prop 27 would have allowed adults to participate in online and mobile sports betting. Large betting companies would partner with a tribe already involved in the gambling industry, or the tribes could create their own platforms. This proposition was, unsurprisingly, supported by the gambling industry and backed by big names like DraftKings, BetMGM, and FanDuel.

How bad is the problem?

There can be denying that California has a huge homeless problem. More than half a million people are sleeping rough or in temporary accommodation in the United States, with Los Angeles, New York City, and Seattle having the most homeless people. California has the country’s highest homeless rate. There are vast encampments on the streets with people living in temporary make-shift structures.

In February, Culver City voted three to two to ban tents and other structures. However, they say the change will not come into effect until housing schemes for people without homes become available. These include a development called Project Room Key and a designated homeless area. Last year, Los Angeles Mayor Karen Bass pledged to get over 17,000 homeless people off the streets through temporary and permanent homes. Culver City fears people who refuse housing will cross the street to their district.  Los Angeles County has 88 cities, of which Culver City is one.

Could gambling revenues still be raised?

While voters rejected Proposition 26 and Proposition 27, this does not mean that the question of gambling funding good causes is closed. This is because, while mobile sports betting has not been sanctioned, gambling is not outlawed in California – far from it. Legal forms of gambling in the state include cardrooms, tribal casinos, parimutuel wagering on horse racing, and charitable gaming. In addition, the California State Lottery is big business. It is single-event sports betting and commercial casino-style gaming that is prohibited.

There can be no denying that the gambling allowed is popular, and there is no reason why the revenues raised could not be used to help solve the homelessness problem across the state. However, it will require serious joined-up thinking and vast reserves of cash.

The Lottery won over Californians in the 1980s by promising to help fund better public education. It funnels billion of dollars to schools, but it has not fixed the education system. However, there can be no denying it has been successful. There is no reason why a similar lottery option could not be used to raise money specifically to be spent on helping people without housing.

Long-term solutions are needed

Experts say extra funding would help the homeless crisis. According to the U.S. Department of Housing and Urban Development, more than half of people experiencing homelessness live in California. California has relied on budget surpluses to fund the massive issue. This has included one-time grants and planned long-term programs. For example, in 2021, the state spent $12 billion on projects and a further $2 billion in 2022.

Working with aid organizations, the state is trying to help the homeless population. However, there is always the worry about what happens if money dries up. With rising inflation and other external macroeconomic factors at play, there is genuine concern that long-term projects could be unfunded.

Christopher Marin, policy director for the advocacy organization Housing California said,

“We can’t continue to keep working around the edges here and providing short-term solutions to a problem that’s decades in the making,”

What are the politicians doing?


In 2020 lawmakers tried to establish a long-term funding stream for homelessness, but that failed. They tried again in 2021 with a bill that would raise corporate taxation. That also failed. It seems that everyone can see there is a problem, but no one can agree on how to solve it. It is a profoundly political issue.

California’s Governor, Gavin Newsom, has said that the state was ‘failing to meet the urgency’ of the crisis and vowed to reduce homelessness by 2 percent by 2024. The crisis has been described as a blight along the West Coast, with residents selling homes due to the homeless epidemic. Some people say they are scared to leave their homes. Amongst people experiencing homelessness, a high number of people are mentally unwell and not receiving treatment.

Unsurprisingly, liberals and conservatives have very different views on how to solve the homeless problem. Democrat officials point to rising rents, greedy landlords, and evictions forcing people onto the streets. Forced evictions were stopped during the Covid-19 pandemic, but there was a fresh wave when things returned to normal. Democrats are calling for the nation’s wealth to be shared more evenly and for more affordable homes to be built.

Republicans argue that homelessness is linked to drug use and the mental health issues of the homeless population. They say that giving away rent-free accommodation to people who won’t help themselves is a waste of money.