California Sports Betting Legalization Battle

Silhouette of palm trees at sunset, vintage filter

On the back of the US Supreme Court’s decision to legalize sports gambling, states across the country have been considering what role sports betting might play in their jurisdiction. Delaware and New Jersey have already passed their own sports gambling bills, and now California is considering its next move.

Their current plans

The decision by the Supreme Court at the beginning of May to allow sports gambling to be legalized was widely praised throughout the US.

Many states had been waiting years for this change to come and were ready to move as soon as the decision was announced. Delaware was the first state to pass a bill legalizing gambling and start taking sports bets. New Jersey was not far behind and will officially start accepting sports wagers on June 14.

The roadmap ahead for California is not so clear. Russell Lowery, a consultant for the Californians for Sports Betting group, submitted petition paperwork to the attorney general’s office in California. The petition calls for the legalization of sports betting in the state, but it mightn’t be qualified until the next election in 2020.

The constitution of California currently prohibits sports betting, and a majority of voters would have to approve a change.

Adam Gray, a member of the state assembly, has been pushing hard to get a vote on this issue on the November ballot, but he faces a significant amount of resistance.

The Californians for Sports Betting group posted a statement on Medium, calling for more urgency: “… fierce opposition from entrenched special interest groups makes it unlikely to pass through both houses of the state legislature before the June 28 deadline — and proves voters need to take this matter into our own hands,”

Why the resistance?

A lot of states are delighted to have the opportunity to attract this new type of business and receive a cut in the form of taxes.

Others are taking a more conservative approach, such as California. There are a number of key parties in the state that are opposed to legalized sports betting.

Numerous Native American tribes dominate the gaming market in California as a result of having constitutional protection when it comes to most types of gaming. The tribal community has revenues in the region of $8bn (£6bn) each year.

The Californian Nations Indian Gaming Association has publicized their opposition to any talk of sports betting legalization. Chairman Steve Stallings said: “Expansion of gaming is a slippery slope.” These tribes currently have a firm hold on the market, and they are not looking to let go of it.

There are also more than a dozen horse-racing tracks and about 75 card rooms in the state. The card rooms have encountered legal trouble over the years because certain tribes argue that they violate state laws. These issues could be ended by new legislation if it is not limited to those offering sports betting.

In February 2018, some tribes even threatened to sue the state if there wasn’t a crackdown on the “player-banked” games that the card rooms were facilitating. They argued that these are actually house-banked games but the card rooms were calling them something else. This would be violating the tribes’ exclusive rights.

Where is the support?

There has been no indication that there is any involvement by the card rooms in pushing for this vote in November.

When asked about what parties are involved in the Californians for Sports Betting group, Lowery would not give specifics, simply saying “in-state gaming interests, leagues, and out-of-state gaming interests”.

It is believed that they will need funds of $2m-$3m (£1.5m-£2.2m) to gain signatures. Based on turnout during the last election, they would need somewhere around 600,000 signatures to win a spot on the ballot.

Lowry is settling in for a battle; he has plenty of experience for it, having previously been chief of staff for the California Senate Republican Caucus.

Having said all of this, not all of the tribes are completely against legalized sports betting in the state. Mark Macarro, tribal chairman for the Pechanga Band of Luiseño Indians said: “We view sports betting as a potential amenity that would complement our numerous offerings.”

These words were echoed by Michael Frawley, the general manager and COO of Tortoise Rock Casinos and Spotlight 29. He believes that the Supreme Court decision “represents a significant opportunity for California tribal gaming, and will benefit all California tribes”.

Leave a Reply

Your email address will not be published. Required fields are marked *