California Trying Once Again to Legalize Sports Betting—Will It Work This Time?

In a state as large as California with as many college and professional sports teams as it has, it would seem that legal sports betting should be a no-brainer. But in the time since the option was given to the states, California has not come close to passing the necessary legislation. 

The most recent attempt began shortly after the Supreme Court struck down PASPA in 2018. It was a ballot initiative that seemed doomed from the start. Russell Lowery, a consultant for the pro-sports betting group Californians for Sports Betting, filed the petition in June 2018.

But no real effort was ever made to collect the 600,000+ signatures that would have been needed. According to Lowery, the point was never actually to get the signatures. The whole purpose was just to get the conversation started.

“We never advanced to get a single signature,” Lowery said. “It started a conversation in California gaming on what is the right path forward, and those conversations will continue until they figure out the puzzle.”

Had he gotten the signatures, the proposal would have still needed to be approved by two-thirds of the Legislature. It would then need a majority of voters to approve for it to become law. So, it was never going to be easy to do even if he had tried.

Now, it appears the failed initiative served its purpose since a resolution was recently filed by Assemblyman Adam Gray and Senator Bill Dodd to legalize betting on sports.

ACA 16

This isn’t Gray’s first attempt to legalize betting on sports. He proposed a constitutional amendment back in 2017 and again last year. Supporters are likely hoping since several states have passed legislation, this time may not be as hard. Maybe this time they get something passed.

“The goal is to get something on the 2020 November ballot,” Gray said in a recent ESPN interview. “My hope would be that we can find a landing spot for sports wagering, where it could enhance all of those institutions, as well as provide revenue and a regulated market for consumers.”

If Gray and Dodd can get the measure on the ballot and the people approve it, Section 19 of Article IV will have the following added to it:

(h) Notwithstanding subdivisions (a) and (e), the Legislature by statute may authorize and provide for the regulation of sports wagering.

The details of the bill and the language still have to be worked out. It would seem that having something more prepared and defined would have a better chance of passing. At the least, it would give Gray and Dodd something definitive to negotiate and bend on when trying to drum up support.

But it appears that they are content with letting the details get worked out as the process unfolds.

Why Try to Legalize CA Sports Betting Now?

Gray insists he knows there is significant interest in legal CA sports betting; his two previous attempts to get something passed are proof of that. But getting legislation passed involves a lot more than just the existence of interest.

With the size of the population in California, there is bound to be a large number of people that would love to bet on sports. However, many of them probably already are—just illegally or offshore. Giving the people a legitimate option with safeguards and consumer protection is what Dodd and Gray say they want to do.

Gray touched on the need for consumer protections in a press release last year in response to the Supreme Court decision to overturn the federal sports betting prohibition:

“…We need to crack down on illegal and unregulated online gaming and replace it with a safe and responsible option which includes safeguards against compulsive and underage gambling, money laundering and fraud…”

He went on to mention how other gambling activities are regulated, so why not betting on sports?

However, California’s large population also complicates things. This is a big state with many stakeholders. The casinos, card rooms, tribal gaming groups and all manner of activists all want to have a say on sports betting, and all have enough sway to trip things up should any one of them be unsatisfied.

Will It Work?

The focus when states try to get legislation passed has been on the revenue that can be raised by legalizing and then taxing the revenue casinos make. But for a state with a billion+ dollar budget, a few extra million is not a significant enough carrot.

However, if the focus is less on revenue maybe California can be more successful. After Colorado’s recently passed a measure to get the question of whether to legalize sports betting on the ballot, John Cooke, the bill’s sponsor, talked about keeping the business at home rather than send it elsewhere.

“Let me tell you about my concierge … I have a place down here (in Denver) … he said, ‘I want this bill to pass because right now, I have an offshore account and I’d rather bet here in Colorado.’ It’s not a huge moneymaker, but we’ll make $7-$10 million, so let’s keep that money here.”

Lowery has commented on how the need for consumer protection is the driving force for the current California measure. He acknowledges that people are already betting on sports, so why not make it legal and protect them from shady business practices?

However, while the focus may be on the good that can be done by legalizing it, Gray and Dodd will likely have a hard time getting the biggest opponents to legalized sports betting on board: the Indian tribes. They currently control the $8 billion gambling industry in California.

They like the idea of increasing revenue. But they don’t like the idea of having to renegotiate their compacts with the state and potentially losing control over other things or being forced to share.

The California Nations Indian Gaming Association (CNIGA), who represent all of the tribal casinos in California, has already come out against ACA 16. Without the backing of the Indian tribes, no measure will ever get passed.

CNIGA Chairman Steve Stallings put it simply in a statement last month:

“In short, CNIGA does not support any expansion of gaming in California, including sports betting, until the for-profit, commercial card rooms stop their illegal practices, including constitutionally prohibited banked games. A legitimate discussion on sports betting could then proceed as long as tribal exclusivity is maintained.”

It’s clear there is still a long road to travel on the way to legal sports betting in California, but there could be some hope if Gray and Dodd can figure out a way to placate the tribes.

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