News : Fantasy sports fight for survival in Sacramento

Tuesday, June 18, 2024

Fantasy sports fight for survival in Sacramento

Jun 18, 2024

Presented by Salesforce

Programming Note: We’ll be off Wednesday for the Juneteenth holiday, but will be back in your inboxes on Thursday.

DRIVING THE DAY — Gov. Gavin Newsom on Tuesday vowed to severely restrict the use of smartphones during the school day, a dramatic move by the nation’s largest state amid dire warnings from the Biden administration that social media harms children. Read the scoop from POLITICO’s Christopher Cadelago and Eric He.

THE BUZZ: DON’T CALL IT LUCK — Placing wagers on fantasy lineups of professional athletes is one of the fastest-growing types of online betting in the country — one that is allowed in most states, including California.

But the industry now faces a threat to its operations in California as Attorney General Rob Bonta determines whether betting on daily fantasy contests — featuring user-chosen team lineups — is lawful when traditional online sports betting is not. His office declined to comment on the forthcoming legal opinion, but a decision could come within weeks.

Last fall, Bonta began reviewing the legality of fantasy leagues after receiving a request from a lawmaker who warned such bets were proliferating. The question has opened a new front in the battle over sports-gaming regulation in California, and the AG’s opinion will likely have national ripples given the legal gray area in which the sites often operate.

Tribal communities — which spent tens of millions of dollars to defeat a 2022 measure to legalize sports gambling — are fighting the fantasy industry’s growth. The California Nations Indian Gaming Association, a coalition of 52 tribes, has urged Bonta to declare that it’s illegal to bet on fantasy sports in any form.

But fantasy sports platform operators argue that their operations shouldn’t be considered traditional sports wagering because selecting players to create a fictional roster of athletes is a game of skill, not chance. Executives and lobbyists for the PrizePicks, one of the largest fantasy sports platforms, hope to influence Bonta’s opinion, and they’re building relationships with lawmakers for the long term, in case the fight goes to the Legislature.

The site hosted a reception for lawmakers and Capitol staffers last night at Mayahuel, a popular Mexican restaurant on K Street. Attendees sipped on margaritas as they listened to a pitch from the company’s top brass and tried out the site’s offerings on tablets.

“Our game is really where skill wins out,” Brian Huss, PrizePicks’ vice president of innovation told Playbook. “We want to build these relationships, we want to work with regulators.”

Among the lawmakers who mingled with PrizePicks’ execs: Democratic state Sens. Steven Bradford and Bill Dodd; Senate Minority Leader Brian Jones and Republican Assemblymember Jim Patterson.

PrizePicks executives also made the rounds at the Capitol on Monday to meet with lawmakers and share an internal poll, conducted by David Binder Research, which found 65 percent of likely California voters support allowing adults to play “paid fantasy sports” if the platforms are transparent and inform people about the risks.

But the company and other fantasy sports platforms that allow wagering, including Underdog and Betr, could face headwinds in Sacramento.

Republican State Sen. Scott Wilk, who sent the letter asking Bonta to weigh in, wrote that “although the participant may utilize their knowledge of a particular sport in choosing their ‘team’ of players,” fantasy leagues are still a game of chance because the user cannot control how the players perform and points are calculated based on the outcome of real-game statistics.

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SACRAMENTO HAPPY HOUR ALERT — Join the POLITICO California team for networking over drinks and hors d'oeuvres at Fox and Goose Public House TONIGHT. Event starts at 6 p.m. Register here to save your spot.

GAS TAX BLUES — California Transportation Secretary Toks Omishakin will chat with POLITICO's Debra Kahn at the Kimpton Sawyer this morning about the electric vehicle transition and the future of transportation funding, followed by a panel with Assemblymember Lori Wilson, Sen. Dave Cortese and other transportation experts. Sign up.

SLEEPING GIANT — Mike Madrid sits down with POLITICO’s Christoper Cadelago for a chat today at Mayahuel in downtown Sacramento about Madrid’s new book, “The Latino Century.” Tickets for the noon and evening sessions are available.

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STATE CAPITOL

TECH TACTICS — After a relatively easy ride through the Senate, Scott Wiener’s bill to set testing and safety standards for the biggest artificial intelligence models is getting some serious pushback.

Today, ahead of its first policy committee hearing in the Assembly, tech trade group Chamber of Progress is launching a petition against Senate Bill 1047, saying it would threaten California’s standing as a leader in tech and urging lawmakers to vote it down.

“Our petition is about giving Californians an opportunity to voice their concern that SB 1047 would seriously damage the state's tech sector as leadership decides which AI bills to move forward with,” said Robert Singleton, the chamber’s state policy director.

The group also sent a letter to Newsom on Monday, warning him that SB 1047 is one of three bills that could align California’s AI policies with the “tech-skeptical” approach of the European Union. Others on the EU track, per the chamber’s view, included Assembly Bill 3211 by Buffy Wicks to require watermarking of AI-generated content and Rebecca Bauer-Kahan’s Assembly Bill 2930 to regulate automated decision-making tools.

“Importing EU-style regulations for California’s thriving tech economy would be like applying petting zoo rules to a full-scale safari,” wrote Todd O’Boyle, the chamber’s senior director of technology policy.

Wiener’s AI bill, one of two dozen proposed in Sacramento this year to regulate the industry, would require large-scale models to conduct risk assessments of their systems — a task some developers and tech advocates say would be burdensome, especially for startups. Despite resistance from the industry, the bill made it through the Senate without taking any major amendments.

Wiener, along with other lawmakers looking to regulate AI, say such guardrails are crucial as the state considers how to avoid the missteps of the last decade, when policymakers allowed for the unchecked growth of social media.

He also argues his bill would promote the growth of the AI industry by establishing CalCompute, a public research cluster that would allow startups, researchers, and community groups to develop AI models.

Waymo communications manager Julia Ilina stands next to a Waymo driverless taxi that stopped in the street because the back door was not completely shut, while traffic backed up behind it, in San Francisco, on Feb. 15, 2023. (AP Photo/Terry Chea)

A Waymo driverless taxi is shown on the street in San Francisco, | AP

ROBOTAXI BILL SHELVED — State Sen. Dave Cortese is holding his bill to give local governments control over autonomous passenger vehicles after an Assembly committee proposed amendments that would strip the proposal of its original intent, he confirmed to POLITICO.

Senate Bill 915 would authorize cities and counties with more than 250,000 people to regulate certain aspects of robotaxi services — legislation prompted by local leaders’ frustration over safety concerns. The Department of Motor Vehicles and Public Utilities Commission are the only two entities that currently oversee the autonomous vehicle industry.

It was set to be heard Monday in the Assembly Transportation Committee, but Cortese decided to hold the bill after the committee proposed removing its local control provisions, he confirmed in a text to POLITICO.

“I will bring it back next year at the beginning of the two year session,” he said. “Hopefully not too much in the way [of] community & human damages in the meantime.”

In a bill analysis published late Friday, the committee proposed striking the provisions of the bill that it said would impose "unnecessary local control" over autonomous vehicles. It argued they could lead to outdated regulatory schemes, like taxi medallions, and that authorizing locals to set fines for autonomous vehicles could offer perverse incentives for local governments to over-police the programs.

HAPPENING 6/18 — A TALK ON THE FUTURE OF TRANSPORTATION IN CA: California’s adoption of zero-emission vehicle policies will change the transportation landscape over the next two decades. How will the transition impact current transportation infrastructure and how will lawmakers fund future changes? Join POLITICO on June 18 to hear from lawmakers, industry officials and stakeholders to examine the future of transportation infrastructure, from transit, pedestrian and bike lanes to local streets, roads, highways, bridges and overpasses. REGISTER HERE.

ON THE AGENDA

IN THE ASSEMBLY — The Budget Committee will meet to discuss the 2024 budget. The Privacy and Consumer Protection Committee will take up state Sen. Josh Becker’s AI Transparency Act as well as Wiener’s SB 1047, mentioned above.

IN THE SENATE — The Judiciary Committee will take up Assemblymember Rebecca Bauer-Kahan’s bill defining artificial intelligence and Assemblymember Buffy Wicks’ legislation on AI watermarking. The Elections and Constitutional Amendments Committee will take up Assemblymember Marc Berman’s bill on election-related deepfakes and Assemblymember Wendy Carrillo’s legislation on AI in campaign ads.

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CLIMATE AND ENERGY

ON THE BURNER — A California proposal would require labels on new gas stoves warning about respiratory health risks. It’s the latest skirmish in America’s culture wars over the stoves, which are more popular in the Golden State than any other. Read more in California Climate.

TOP TALKERS

— Assemblymember Matt Haney spent $75,000 in campaign funds at Niners, Giants and Warriors games. He wrote the expenses off as fundraisers. (The San Francisco Standard)

— How a developer’s attempt to build a wine empire died on the vine. (San Francisco Chronicle)

— Trump’s criminal conviction isn’t sitting well with some independents, a new poll shows. (POLITICO)

AROUND THE STATE

— Position vacancies are bringing some San Diego city boards and commissions to a standstill. (San Diego Union-Tribune)

— Los Angeles school officials will vote today on whether to ban cellphones during the school day. (Los Angeles Times)

— The Point Fire near Sonoma Lake burned over 1,000 acres and triggered evacuations for hundreds of area residents as of yesterday afternoon. (The Mercury News)

— A repurposed Oakland hotel is saving lives and easing emergency room overcrowding. (KQED)

— compiled by Tyler Katzenberger

A message from Salesforce:

AI is revolutionizing business, accelerating business, and even helping you plan your next vacation. But its safe deployment requires robust frameworks. That’s why Salesforce is building Trusted Enterprise AI, distinct from Consumer AI, and enhancing business operations through optimized supply chains, fraud prevention, and personalized customer service. Salesforce balances innovation with data privacy and security, ensuring that our Enterprise AI remains transparent and trustworthy. Nuanced AI regulations will help create an innovative, effective, and inclusive AI future. Learn more about how Salesforce is providing AI solutions that empower businesses while maintaining high standards of data protection and trust. Learn more.

PLAYBOOKERS

PEOPLE MOVES — Ryan Beiermeister is now VP of product policy at OpenAI. She most recently was director of product for social impact at Meta and is a Palantir alum.

— After 14 years running her own shop, Samantha Corbin is joining Brownstein Hyatt Farber Schreck’s state government relations team as senior policy adviser in the Sacramento office.

BIRTHDAYS — Lobbyist Ryan Kenny of Clean Energy … Robert O’Brien … former Rep. Jerry McNerney (D-Calif.) … MPA’s Rachel Alben … (was Monday): George Akerlof ... Jon Leibowitz ... SF Supervisor Aaron Peskin

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CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here.

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