Complicated California Showing Some Legal Sports Betting Optimism
California, one of the remaining legal sports betting "big-fish" holdouts moved one-step closer to welcoming a long-awaited sports betting platform this week with news that the state's Indian Tribes collected 1.4 million signatures that will at a minimum get the topic on the 2022 election ballot.
The news suggests that legal sports betting could be coming to the biggest state in the nation within two years, or possibly sooner. It is widely expected that given the choice, California voters will likely overwhelmingly support legal sports betting as a way to generate new revenue streams for state and local coffers that are currently $54 billion in the hole.
The California Market
California would represent the biggest fish in the American legal sports betting tank. With 15 professional teams representing four major sports leagues and with an American-high 40 million people, the state's tribes, betting providers and ultimately the state could greatly benefit from a legal sports betting platform.
It is estimated that legalization would generate $200 million in annual revenue from taxes and licensing right off the bat, and could reach $500 million upon maturity of the industry in the state. With a looming $54 billion budget shortfall in the state due to the coronavirus pandemic, it became obvious just how much that revenue would have aided in mitigating the crippling shortfall.
What It All Means... for Now
The petition essentially means that native American tribes in the state can run various games, including dice and roulette, with the possibility of sports betting in the future, from tribal establishments. They met a key submission deadline and gained the necessary 1.4 million signatures to move the subject to the next phase. It means that the way has been paved for the possibility for tribes to offer on-site betting opportunities previously not afforded to them.
The tribes missed the opportunity to pose the question of whether or not to allow sportsbooks on their land on the 2020 ballot because of a lack of signatures - largely due to the inability to canvass due to COVID concerns.
Cardroom Conundrum
California's 72 cardroom casinos still loom over the whole subject of legal sports betting in California. The state has been the scene of an ongoing battle between the state tribes and cardrooms for the privilege of offering table games and other forms of legal gambling. As of now, the issues are still outstanding although...
The California appellate court ruled just this week that card rooms could continue offering “player-banked” table games, which goes against the wishes of the California tribes that had hoped to keep all forms of gambling to themselves. The courts basically said that the tribes don’t indeed have exclusive rights to offer table games, just as they have been for years.
The cardrooms gained a little “legal cover” the last week and are going to be a major hurdle for the state tribes and California legislators to clear before any sort of legal sports betting platform is to go live.
While legal sportsbooks are unlikely to be part of cardrooms anytime soon, the courts have shown a willingness to go against tribe wishes and have made the legal betting scene a bit of a grey area in the state. A constitutional amendment, which would be necessary for cardrooms, isn’t likely anytime soon, keeping them out of the legal sports betting conversation for the time-being at least.
Another Potential Issue
California's state tribes have shown a reluctance to immediately introduce any form of mobile betting for California. It means that the tribes and state for that matter would be missing out on a huge revenue generator and that eager bettors will be limited to brick-and-mortar facilities in mostly remote locations in California.
New York has a similar retail-only model for legal sports betting and the figures out of that state show that they are falling far behind others with a robust online market. Case in point is New Jersey just reported a record November sports betting handle of $931,620,415 - 93.6%, or $872 million of which came from the state's betting apps. New York reported $0 from their non-existent mobile sports betting platform.
Native American gaming leaders have shown a willingness to eventually adopt a mobile sports betting platform but that will come sometime in the future.
A Time of Change in California
The 2020 Election brought about some major change in California, which is about to impact the legal sports betting scene there. Current California Attorney General Xavier Becerra looks as though he is on his way to being confirmed as Joe Biden's Secretary of the Department of Health and Human Services, and the previous state AG Kamala Harris is about to be sworn in as Vice President.
It remains to be seen if the impending changes will either help or hinder the legal sports betting scene in the US. But as of now, thanks to the actions of the California tribes, the public will get their say on the matter in 2022 at the latest, and maybe even in 2021.
