Will Online Sports Betting in California Ever Be Legal?
The history of gambling in the USA is long and complicated, but it was effectively outlawed on a national scale with the passing of the Professional Amateur Sports Protection Act (PASPA) in 1992.
In May 2018, the US Supreme Court overturned PASPA, declaring it to be unconstitutional – and the states were allowed (individually) to decide how – and if – they wanted to legalize sports betting.
Delaware was the first state to get sports betting started on June 5th, 2018, and since then other states have followed suit. 36 states and Washington D.C have already got on board, and others are working through the process to ensure that they have the right structures in place, but some states do not look like they are going to get involved – including California.
Despite heavy backing from leading sportsbook operators like WynnBet lobbying for California to legalize sports betting along with some tribal casinos, California has not legalized sports betting, and it might be several years before they do.
The November 2022 Ballot
Two separate bills regarding the legalization of sports betting in California were prepared for presentation to the voters. Both these were linked, one focusing on in-person betting while the other was about online sports betting.
Proposition 26
Titled “Legalize Sports Betting on American Indian Lands”, Proposition 26 was put forward by a group of 50+ Tribal casino operators, with the express interest to allow sports betting (as well as roulette and craps) to be allowed in the tribal casinos and racetracks in the state.
Proposition 27
Named the “California Solutions to Homelessness and Mental Health Support Act”, this proposition was backed by some of the biggest names in US sports betting, including WynnBet, BetMGM, DraftKings and FanDuel. Legalized online sports betting would have 85% of tax revenue used to fund services for homelessness and mental health, and support Proposition 26 by ensuring that any online sportsbook had to partner with a tribal casino.
Both of these propositions got plenty of airtime, but with conflicting messages and a lack of support from prominent public figures or the majority Democrat leadership, both propositions were lost at the ballot.
Only 29.9% of voters supported Proposition 26, and 16.6% supported Proposition 27 – and this served a big blow to the big money supporters who pledged serious cash to the fundraising.
Sources suggest that around $569 million was spend on these bills and getting them to ballot stage, and the failure to respond from the voters has put any plans for another shot at convincing the Californians to allow sports betting seems to have been put very much on the back burner. Some of the sports book operators are said to have invested more than $30 million each for the chance to get in front of the people in one of the most populous states in America – and to have lost because of public opinion is a bitter pill to swallow.
Many of the big players have publicly stepped away from developing another bill to try and pass, but the CEO of Flutter has said that it is something that they will achieve.
What are the Barriers?
Gambling, as it exists at the moment in California, is restricted to the slots, lotteries, and card games available in tribal casinos in the state, in the cardrooms, and on the horse racing tracks.
There are a lot of tribes in California, and the casinos are an important part of their lifestyle (and livelihood). While Proposition 26 would have increased footfall to their casinos and racetracks in the state by allowing in-person sports betting as well as extending their casino offering to craps and roulette as well, it was less important to them than preventing the onslaught of competition that online sports betting and other casino games would have had.
The sports book operators formed a conglomerate to get Proposition 27 passed, and while they managed to garner the support of three tribal casinos, more than 50 stood determinedly opposed.
With a lack of cohesive vision between these parties, it is almost impossible to present a united front to the voters who are the ones with the power – and according to some commentators, it was this infighting that had a profound effect on the way that the voters voted.
Without overriding support from the public, the vote will not go through. And it doesn’t look likely that the Democrat-led government of California are likely to back another bill either.
If sports book operators want to get into the lucrative California game, they need to find a way to appease the tribal casinos, to convince the public, and get the backing of the leaders and the media – not an easy task.
We will be lucky if we see the legalization of sports betting in California in the next decade.
