California Citizens to Decide Fate of Legal Gambling on 2022 Ballot

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Dan Lane, 62, and Gerry Dennison, 63, studies a gambling guide before placing his bets. Mark Makela/Getty Images/AFP

The road to legal sports betting legalization in California has been a long and difficult one but news last week put it one step closer to becoming a reality. California has been chasing its dream to become the biggest betting market in the country since the US Supreme Court’s 2018 decision to overturn its blanket ban on sports betting. The state ultimately hopes to join the 26 thriving jurisdictions presently allowing sports wagering.

The Coalition to Authorize Regulated Sports Wagering, written by Native American tribes was heard and allowed to go ahead Thursday after those tribes were able to collect a whopping 1.4 million signatures. They needed just 997,139. The petition will pave the way for a question of whether or not to allow sports betting at tribal casinos and horse-racing tracks in California to appear on the 2022 election ballot.

“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.

The Coalition to Authorize Regulated Sports Wagering

The Coalition to Authorize Regulated Sports Wagering is made up of 18 California Native tribes whose goal it was to get permission for retail sports betting at land-based casinos and horse racing tracks. The coalition reportedly spent $11 million in getting signatures and endured the COVID-19 crisis to do so. Their hard work of getting sports betting on the 2022 ballot finally came to fruition Thursday.

A constitutional amendment will be a part of any sort of sports betting launch. Hence the need for California citizens to have a say.

What the Proposed Platform Will Look Like

Mobile betting, interestingly, wasn’t included in the Coalition’s plans. The tribes have requested a retail-only platform for in-person betting at tribal casinos and at California-licensed racetracks. This will run for a period of five years, during which time they will likely consider how to include the more lucrative mobile side of betting into their overall sports betting industry.

Betting would be limited to those 21 years and older and wagering on college and amateur sports would be prohibited under the Coalition’s plan. A 10% tax rate has been proposed and that revenue will be earmarked for state mental health programs, public safety, education, and regulatory expenditures.

Along with sports betting, casino games roulette and craps would be added to the tribes’ betting menu.

Untapped Potential?

California will become the largest sports betting market in the US, assuming voters say “Yes” on the 2022 ballot. 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.

“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.

It is estimated that legalization would generate $200 million in annual revenue from taxes and licensing right off the bat according to Eilers & Krejcik and could reach $500 million upon maturity of the industry in the state. Maturity includes a full-blown mobile betting sector, similar to the ones operating in such jurisdictions as New Jersey and Pennsylvania.

Potential Headwinds

California’s 72 cardroom casinos aren’t going quietly in their fight for control over the California legal sports betting industry. They threaten to stand in the way of the tribes’ desires to essentially maintain their monopoly over the California scene. The card rooms obviously want a piece of the legal sports betting pie but have been left out of any proposal.

There is also a “No on the Gambling Power Grab” campaign that has been making some noise in California. They have heightened their profile the last couple of years and raised $1 million toward their campaign last year alone.

Kyle Kirkland, president of the California Gaming Association also weighed in with some non-supportive comments 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.”

So, What’s Next?

The battle for legal sports betting in California continues down an uncertain road. But at least the citizens of the state are scheduled to have their say on the matter in 2022. While that significantly delays the potential launch, at least the ball has been advanced.

A lot can change in the leadup to 2022 including the potential addition of mobile apps being cleared for takeoff. Expect the California scene to remain fluid over the next 18 months and for more news to pour out of the prospective state.