California Online Gambling Likely to Suffer More Setbacks

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A federal court decision prohibiting a Native American tribe in California from operating an online bingo site could have significant consequences.

Many parties have been pushing hard for legalizing online gambling and sports betting in the state. This court decision could deal a massive blow to that effort.

On the surface, the appeal court ruling may not seem like a big deal, but it sets a precedent for denying online gambling operations throughout the jurisdiction.

The ruling was made by the US 9th District Court of Appeals in August. Specifically, the court ruled that federal gambling laws do not protect the tribe’s online bingo site.

The Nation of Santa Ysabel tribe is no longer allowed to offer online bingo games through servers located on their reservation.

There are 69 casinos operated by Native American tribes throughout California. If this case had resulted in a different ruling, it would have opened up the doors for all of those casinos to follow suit with their own online gambling offerings.

Online gambling in California

There have been numerous attempts over the years to have online gambling legalized in California, but they have all been unsuccessful. Some out-of-state online operators do cater to California residents, and it is not considered illegal for a resident to gamble through one of these platforms.

In particular, many have pushed to have online poker legalized. Many poker rooms are dotted around the state. The issue hit a major roadblock at the start of 2018 when lawmakers announced that they would shelve the issue. This was a significant move because the push for legalization of online poker has been on the legislative agenda each year for the past decade.

A lot of the resistance comes from tribes that have a lot of political influence. There are ongoing issues between many tribes and cardrooms in the state, and the tribes oppose any move to expand gambling laws in the state until those issues have been resolved.

Since it first appeared on the legislative agenda in 2008, there have been 16 different attempts to legalize online poker in California. The issue is complicated because of the sheer number of gaming establishments in the state.

There are more than 60 major tribal casinos and over 100 fully licensed card rooms, along with a state lottery and a racing industry that has a lot of political influence. In addition, at least 66% of the voters have to favor legalization. With a lot of animosity in play among the various stakeholders, this would be difficult to achieve.

Potential sports betting legalization

There is a bit more of a chance for sports betting to be legalized in California. As mentioned, it is not easy to change the gambling laws in the state.

So far, eight states have legalized sports betting. Many others have also made it a major priority for 2019. Many of the same issues exist with sports betting as with the online poker debacle.

A sports betting bill was introduced by Assemblyman Adam Gray shortly after the Supreme Court decision in May. He is also one of the main backers of legalizing online poker. This bill did not get enough support to be included on the November ballot.

The new plan of action is to aim for a spot on the 2020 ballot. A well-known political consultant, Russell Lowery, is one of the key supporters of this idea. A measure to do so was proposed in June and has been approved by state officials for proponents to start seeking signatures.

They need to gather more than 585,000 signatures of registered voters before the end of February 2019 to win a place on the 2020 ballot.

Despite the uncertainty, several gambling operators in the state are preparing to introduce sports betting. MGM Resorts has partnered with the online gambling developers GVC Holdings, along with the United Auburn Indian Community (UAIC).

This deal concerns online, mobile, and retail sports betting for UAIC, which operates the Thunder Valley Casino Resort in Lincoln, California. GVC and UAIC had made a similar deal in 2015 involving online poker technology.

While there is no certainty that sports betting will be legalized, certain operators will be prepared for quick adoption if it does happen.