Big Step Forward on California Legal Sport Betting Aspirations

California, the biggest potential fish in the US legal sports betting industry took a major step toward launch on Thursday, but the possibility of bettors being able to wager on their favorite team is still at least 18 months out.

The Native American Tribes of California, which currently hold a firm grip in the present gambling situation in the state has been busy collecting an impressive 1.4 million signatures with the goal of getting the subject of legal sports betting to its citizens, in the form of a question on the 2022 election ballot. The Coalition to Authorize Regulated Sports Wagering, started by the California Tribes is the most serious organization yet put forth an effort that would allow California to join the lucrative US legal sports betting fray.

“This is an important step toward giving Californians the opportunity to participate in sports wagering while also establishing safeguards and protections against underage gambling,” said Mark Macarro, tribal chairman of the Pechanga Band of Luiseño Indians.

What is The Coalition to Authorize Regulated Sports Wagering?

18 of California's Native American Tribes banded together to form The Coalition to Authorize Regulated Sports Wagering, a group that has worked hard to promote retail sports betting at land-based casinos and horse racing tracks.

The Coalition has been able to generate 1.4 million signatures and spend $11 million on their campaign and despite the COVID-19 crisis that hindered their ability to collect signatures, succeeded in getting their proposals to voters.

About that Proposal

The Coalition's plan is to launch retail-only betting for now in the state of California – no mobile. It has identified a five-year waiting period before the allowance of any mobile betting. Retail wagers will be limited to tribal casinos and at California-licensed racetracks for now.

The legal sports betting platform will be taxed at 10% with the funds generated going to state mental health programs, public safety, education, and regulatory expenditures. Wagering will only be permitted to citizens over 21 years old and betting on in-state colleges and amateur athletics will be prohibited.

The tribes, under their proposal will gain the opportunity to include roulette and craps on their betting menu.

The California Market

It is no secret as to why the legal sports betting industry is licking its chops at the prospect of welcoming California into their fold. The state boats 15 professional sports teams, many of which are iconic, and the state's 40 million citizens make California the most populous in the nation.

There has been no shortage of studies done about the potential financial implications of a California legal sports betting scene. An estimated $200 million in annual revenue could be generated right away from licensing and taxes in the state and research company Eilers & Krejcik has identified as much as $500 million being generated annually for in the state. Those projections however will likely only come to fruition once a robust mobile wagering platform is up-and-running in the state.

“California is easily the largest prize in the U.S. sports betting market,” said Chris Grove, a managing director for Eilers and Krejcik Gaming, a research firm that has advised state lawmakers on the issue.

In the Way

There are a few entities that are threatening to throw roadblocks up for what The Coalition to Authorize Regulated Sports Wagering has laid out. The state's 72 cardroom has long had issues with the virtual monopoly of the tribes and will definitely be there will a dissenting viewpoint, largely because they have been left out of any wagering expansion plans.

The “No on the Gambling Power Grab” campaign has also gained some steam in California and could be another thing standing in the way of a smooth legal sports betting launch in California. They have raised over $1 million for their campaign and will be heard from yet in the battle for sports betting in the state.

Kyle Kirkland, president of the California Gaming Association also displayed a dissenting viewpoint with the Coalition's goals when he said: “This initiative does nothing to advance sports wagering, and instead expands the tribal casinos’ tax-free monopoly on gaming and rewards those operators for prioritizing their own wealth over public health and safety.”

It Ain't Over Yet

A whole lot can happen between now and election-day 2022, both good and bad. The bad comes in the form of legal fights and the good could include the adoption of a mobile platform. But at least there is some acknowledgement that the citizens of California should have a say.

Expect a lot more news in the 18-month leadup to 2022 as various entities in the state battle for control over what should be an explosive California legal sports betting market.