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California is in the middle of a very prolonged and difficult process of legalizing sports betting. Everyone knows it’s coming, the question is when and in what form exactly. The major reason the process is so difficult is that many powerful players with opposing interests are each trying to turn their own plans into reality.
Because California is the most populous state in the US, with the most developed economy, the stakes are high. Once sports betting is legalized, California will become the largest sports betting market in the country.
Here are some facts you need to know before placing a bet in the Golden State.
The First Attempt at Sports Betting Legalization
Back in 2016, we saw the first attempts at legalization when Democratic Assembly Member Adam Gray introduced Assembly Bill 1573. This proposal failed, but Gray didn’t give up. In 2017, he came back with Assembly Constitutional Amendment 18, which would“permit sports wagering only if a change in federal law occurs.” That’s what happened when the United States Supreme Court approved New Jersey’s right to regulate its own sports betting. For that reason, the future of sports betting in California looks bright.
In 2019, Gray introduced another sports betting bill: ACA 16. This time he had a powerful ally in state Senator Bill Dodd. Dodd introduced matching legislation in the Senate.
Coalition of Tribes
After this, a coalition of 18 California tribes filed papers with the state attorney general’s office for an initiative of their own, named The California Sports Wagering and Unlawful Gambling Enforcement Act.
Under this bill, sports wagering would be legalized in casinos on tribal land and licensed racetracks only. It allows wagers on professional, college, and some amateur sports. But at the same time, it would prohibit betting on games involving California college teams, and does not include provisions for mobile or online gambling.
In 2020, California tribes were on track to gather enough signatures to get their initiative on the ballot. But COVID-19 restrictions suspended their activities for the time being—as well as the proposal by Gray and Dodd. This leaves the road to California sports betting legalization uncertain.
Card Rooms
Even setting aside the question of sports betting, there was a preexisting conflict between the tribes and a coalition of card room owners. The tribes lost a lawsuit against the state government in which they argued the government was violating their exclusive right to offer table games by not enforcing restrictions on state-regulated card rooms.
This was just one battle in a series of years-long legal challenges between the two parties. Much like casinos often are to tribes, card rooms are some of the largest revenue generators for many communities in the state—to the tune of billions of dollars annually.
The card rooms’ victory in court might encourage them to try opening their own sportsbooks, though this would be a very difficult task for them. Such a move would require a constitutional amendment and actions on their part similar to those taken by the tribes.
The Sports Betting Market in California
If and when sports betting is legalized, California would become the biggest market for it in the US: It has both the largest population and most sports teams of any state in the country.
Based on estimates given by the American Gaming Association, experts believe that Californians could bet more than $18 billion every year. This means that state sports betting could be worth hundreds of millions of dollars annually. In fact, a study by Eilers & Krejcik predicts that a mature California sports betting market would contribute $503 million to the state.
When Is Legalization Expected?
Governor Gavin Newsom stated in 2020 that the issue is “more complicated than it appears because there are so many different players. And we’ve got to accommodate for those concerns—card rooms, tribal interests—[and] obviously address all those issues together.”
Chris Grove, a gambling industry analyst and partner with Eilers & Krejcik, said, “In many ways, sports betting is a footnote for tribal and commercial gambling interests in the larger conversation around gambling in California.”
Although there wasn’t enough time to finish the complicated negotiations before the 2020 election, both Senator Dodd and the coalition of tribes are planning to put their proposals on the ballot in November 2022. So there’s a good chance that 2022 will be the year when legal sports betting in California finally becomes a reality.
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