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Sports Betting Hearing in California Another Step Toward Legalization

The Joint Assembly and Senate Governmental Organization Committees of California met on Wednesday to discuss and educate themselves on the merits of a legal sports betting platform in the state, signaling a serious effort by lawmakers and gambling providers to fast-track regulated wagering in the state. 20 states have already legalized sports gambling and have reaped the benefits of generated tax revenues so far.

Shockingly, Wednesday's preliminary hearing was the first on the matter in a state that fancies itself as a trail-blazer and leader of forward-thinking in the US. The hearing was supposed to take place in November but didn't happen for various reasons.

As one of the three most populated states in America, California would be the biggest fish so far and would take the total of Americans legally allowed to place a wager on their favorite team to over 50%.


Who was there?

California's Joint Assembly heard from experts from the legalized gambling industry, integrity advocates, lottery commission reps, gambling providers, reps from states that have legal gambling already and representatives from Major Sports Leagues in North America including the NBA and Major League Baseball.

For the most part, the hearing was positive for supporters of legal gambling. Most pointed to the benefits of legal wagers from the ability of lawmakers to take gambling off the black market to the revenues that could be generated for the state.


Who was missing?

A lot of attention has fallen on just who was at the hearing but who wasn't there may be just as relevant. Representatives from California’s Indian gaming tribes, cardrooms or racetracks or mobile betting providers were absent from the day of talks despite those entities having a major stake in the legalization process.

It speaks to the need for consultation from the industry and its branches and what they would bring to the table. Does it mean that California is still far away from a legal betting platform? Not necessarily. Operators will have their time eventually but the benefits and drawbacks of a legal betting platform had to be discussed first.


What came out of the Hearing

There seemed to be some consensus that came from the discussions and that is that black market sports betting is already taking place, illegally in the US. According to Jake Williams of Sportsradar, a corporation that collects and analyzes data related to sports. "a move toward a legal framework for sports betting would result in the 'highest integrity standards'". It was widely agreed that regulation would benefit to protect consumers.

There was also discussion about what the state of California could generate in terms of revenues and ultimately tax dollars for state and local programs. One presenter, gaming industry analyst with Eilers &

Krejcik Gaming, Chris Grove set out a figure of $2.5 billion that could be generated each year in California alone if sports gambling is legalized. That is significant considering those same experts predict the industry could become a $6 billion industry by 2023.

Tax revenues were also discussed and recommendations were that the state should keep the tax rate under 20%, as the average in the 20 state that currently offer legal sports gambling sits at 19%. Skeptics of legalized betting on the flip side pointed to the disappointing tax revenue from legalized marijuana to temper expectations.

There was also some discussion about what to do about problem gaming and what to do about the perceived ills to a legal betting platform.


So, will legal sports gambling actually happen in California?

Obviously, the sports betting market is huge in California with it being the most populated state and it being home to four NFL teams, four NBA teams, and five MLB teams. The current operators of the existing casinos in California and the tribes have signaled a willingness to support such a platform and pro sports leagues have already signed partnership deals in other states with gambling providers.

All that is missing is public consultation and ultimately lawmakers amending the state constitution to allow for sport betting. The appetite for legality seems to be there on a host of fronts. The why and what have been covered – all that is left is the who, where and when!