Why does the California State Senate Still Oppose Sports Betting?

Why does the California State Senate Still Oppose Sports Betting?

There are no authorized sports betting in California. However, this state would be a gold rush for legal sports betting apps in the US because it has 40 million residents, 40+ million tourists yearly, and more professional sports teams than any other state.

Even though stakeholders in California’s sports betting industry have been at odds with one another for more than a year, it is now up to the people. In November 2022, Californians will have the chance to determine whether or not the state should legalize sports betting. Votes for either retail or online sports betting may pave the way for a 2023 launch.

There were formerly four sports betting-related proposals up for a vote in November. To qualify for the November ballot, the organizations sponsoring each initiative needed to collect almost 1 million valid signatures from Californians. Only two of the four proposals made it across the finish line with the required signatures in tow by the deadline of June 25. Therefore, the only initiatives California voters were considering are Proposition 27 and Proposition 26. Before discussing the reason behind opposing the bill, let’s see what these Propositions offered.

Proposition 27

This proposal aims to make mobile and online sports betting legal for California residents over the age of 21. It would give tribal organizations in the state the authority to work with online bookmakers and provide sports betting outside tribal territories. Prop 27 is the result of a coalition of seven members, which are:

  • BetMGM
  • DraftKings
  • Bally’s Interactive
  • FanDuel
  • Penn National Gaming
  • Fanatics
  • WynnBET

While branded tribal applications would just need to pay $10 million, sportsbook businesses would need to pay $100 million to get their licenses. Moreover, there would be a 10% annual tax on gross income for all sportsbook apps. This effort has the support of a consortium of US sportsbooks.

Furthermore, this initiative intends to aid in the fight against homelessness in California. It is a problem that plagues many parts of the Golden State. The state fund for the issue would receive 85% of the taxes. With less administrative expenses, the remaining 15% would be distributed to the state’s non-participating indigenous organizations. The action is an attempt to distribute wealth among the various organizations since the number of tribes in California much outnumbers the seven coalition members.

Proposition 26

With the passage of this legislation, retail sports betting will be permitted at all state-wide tribal casinos and racetracks. In California, there may be up to 60 sportsbook outlets between the tribal casinos and racetracks.

It would also achieve two long-standing tribal objectives. The main objective is to permit tribes to take legal action against cardrooms and other locations for specific games they are providing. The other objective is to legalize dice games and roulette at tribal casinos.

Furthermore, all sports wagering would be subject to a 10% tax on revenue under this proposal. Under the proposed law, betting on regional college teams like UCLA and USC would be prohibited.

The legislation puts up barriers to online sports betting and outlaws it for at least five years. Just like most gaming movements in California, there is always a motivating factor behind any initiative. In this case, the protection of the tribes’ exclusivity over gambling activities in the state is one of the motivating factors here. However, this project does not include card rooms.

Learn more about how the sports betting licenses work in other states that have been live and legal for a while now:

What happened on July 10, 2022?

On Sunday, July 10, the California Democratic Party chose to join the growing chorus of opponents of Proposition 27. The Democrats, however, agreed to take no position on Proposition 26.

The choice was finalized by the Democratic executive committee along with recommendations to back six additional measures in various other fields. The only two measures that the Democrats opted not to support were propositions 26 and 27.

The reason behind opposing the bill

Proposition 27 has seen a huge backlash from various groups in California. These groups assert that it would expose kids to a significant increase in gambling and convert every smartphone, game console, tablet, and laptop into a gambling machine. Native American independence and tribal gaming are specifically targeted by Prop 27.

Additionally, Proposition 27 undermines Tribal sovereignty, imperils decades of advancement for California’s Indians, and jeopardizes their ability to support their own economies in the future.

So, when will Californian sports betting begin operations?

If approved, two ballot measures in November 2022 would allow for some type of sports betting in California. However, there is no assurance that either proposal will succeed. If both face rejection, the deadline will be well past 2023.

Additionally, even though it’s possible for both initiatives to pass in November 2022, their passage might not be complementary. Before the first sportsbook can start operations in California, it would probably take many months, even if there is no dispute or conflict following the election in November 2022.