California resoundingly rejected two ballot measures that would have legalized sports betting.

With 42% of the vote counted, Proposition 26, which would have legalized sports betting on tribal lands and at race tracks, had been rejected by 70.4% of voters. Prop 27, which would have legalized mobile sports betting, was doing even worse, with 83.3% of voters saying no.

• The committee supporting Prop 27, which received major funding from DraftKings, FanDuel, and Penn National Gaming, raised $170.2 million to the opposition’s $238.1 million. 
• Prop 27 was the most expensive ballot measure in state history.
• Prop 26 supporters raised $121 million to the opposition’s $43.9 million.

“The industry spectacularly messed this up,” Gambling.com Group CEO Charles Gillespie told Front Office Sports, citing Prop 27 campaign messaging that focused on homelessness funding with little mention of sports betting.

What’s Next?

California could still legalize sports betting through its legislature.

“The large commercial sportsbooks are going to have a few private conversations with the tribes and try to strike a deal,” said Gillespie. “If they can’t, you’ll have another ballot initiative in 2024, and the commercial sportsbooks are potentially going to be a lot less deferential to the tribes.” 

Gillespie noted that some sportsbook company CEOs are likely “relieved that California is not regulated,” because launching in the nation’s most populous state would be very expensive. 

Sports betting is legal in some form in 33 states, per Action Network, with some still sorting out regulations and lawsuits.

Adidas will sell shoes derived from Yeezy designs — despite cutting ties with Ye last month. 

“We own all the IP, we own all the designs, we own all the versions and new colorways, so it’s our IP, it’s our product,” Adidas finance chief Harm Ohlmeyer told the Wall Street Journal. 

Yeezy brand products generated $1.7 billion in sales in 2021 — roughly 8% of Adidas’ revenue. 

In October, Adidas ended its relationship with Ye — formerly Kanye West — after the rapper and designer made antisemitic comments on social media platforms.

• Gap also ended its deal with Ye, removing his merchandise from its stores and shutting down YeezyGap.com.
• Foot Locker pulled all Yeezy brand footwear from its 2,799 brick-and-mortar stores  in October. 
• NBA guard Jaylen Brown and NFL defensive lineman Aaron Donald cut ties with Ye’s sports marketing agency, Donda Sports.

Germany-based Adidas first partnered with Ye in 2013.

Another Cut

Adidas has slashed its full-year net income forecast to roughly $251.56 million, down from previous estimates of $501.3 million due to the termination of the Yeezy brand partnership. 

The company generated $6.4 billion in Q3 2022 revenue, an 11% increase year-over-year, driven by double-digit growth in its football and running segments. Its net income from continuing operations reached $66 million in Q3 2022, compared to $480 million in Q3 2021.

Adidas is expected to hire outgoing Puma CEO Bjørn Gulden, who will leave his post at the end of the year. Gulden will replace Adidas CEO Kasper Rørsted.

Despite Formula 1’s soaring popularity, FIA’s president is worried about the racing series’ potential destruction.

On Tuesday, International Automobile Federation president Mohammed Ben Sulayem warned that online abuse could hinder the sport if it’s not addressed. 

His remarks follow recent death threats made toward female steward Silvia Bellot and years of alleged harassment and hate posts.

“It is utterly deplorable that a volunteer such as Silvia or any of our marshals and officials, who volunteer their time to allow us to go racing, is the subject of such hatred,” Ben Sulayem said.

“Who would want to pursue becoming a top official in this environment? The reality is obvious — if this continues, it will destroy our sport.”

• The FIA is having discussions with social media platforms, governments, and other sports bodies “to make strong commitments for joint action.”
• It has commissioned research regarding online abuse in sport.
• The FIA, Formula 1, and its 10 teams have partnered with technology platform Arwen in an effort to automatically remove abusive content.

“The level of sustained toxicity has reached a crisis point,” he added. “It is time for all of us to unite — and to act.”

Vegas Venue

Meanwhile, Formula 1’s increasing cultural capital has translated into higher ticket prices.

A package for a seat in the grandstands at next year’s Las Vegas Grand Prix — which runs around $2,000–$2,500 for three days — has already sold out, but F1 plans to release more.