California Sports Betting Initiative Dead in the Water

The California state flag

30-second summary:

  • California has many tribal gambling facilities and card rooms
  • There have been many attempts to make online poker legal
  • A sports betting initiative was met with heavy resistance and did not get enough signatures to feature on the 2020 ballot
  • There is still enough time for a new sports betting initiative to do so

California’s gambling laws

California is a little unusual when it comes to its gambling laws. Online gambling is still illegal despite numerous attempts to change this over the years. Many out-of-state operators target California residents.

Poker is extremely popular in the state, which has many poker rooms, but online poker is still a long way away. Since legislators first began to look into the issue in 2008, there have been 16 different attempts to legislate for online poker legislation. All ultimately met with defeat.

A large source of the resistance to online gambling comes from the tribes, who have a significant presence in the California gambling sector. They hold a lot of political influence and they don’t want their revenues eroded if legal sports betting is allowed in the state.

Across the US generally, not many tribes seem to have much interest in opening sportsbooks. This is largely because of the slim margins and significant operating costs.

Currently, more than 60 tribal gambling facilities and more than 100 card rooms have licenses to operate in the state. Calfornia also has a thriving state lottery and regular horse racing meetings. The card rooms and tribal facilities are often at odds with one another.

Initial hopes

There was some hope that sports betting might become legal in California in the coming years. The main obstacle was that it is just simply tough to change the gambling laws in the state.

Assemblyman Adam Gray introduced a bill not long after the ending of the federal ban on sports betting in May 2018. He has previously been a key backer in the push for online poker. However, sufficient support was not reached to give it a place on the November 2018 midterm ballot.

This led to a rethink of the plan of action. Legislators then set their sights on the 2020 ballot. A high-profile political consultant, Russell Lowery, backed this idea and the measure was put forth in June. It was approved by state officials to proceed, and to seek out the signature requirements.

They had the lofty task of getting more than 623,000 signatures before the close of February, to get a place on the ballot for the bill in 2020.

Now dead in the water?

Despite the optimism, it looks as if legal sports betting will not be coming to California for the foreseeable future. The initiative did not gain sufficient support.

Californians for Sports Betting was the main campaigner and it did not reach the 623,000 signatures needed to get a place on the ballot. It did not get even a single signature.

Lowery said: “We never advanced to get a single signature. 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.”

There was a lot of resistance to their efforts to get support for the initiative. Lowery is of the belief that those people resisting are not looking at it from the right perspective. He believes that they have now made good progress on the issue, as people now know that an initiative needs sufficient support in order for sports betting to become a reality. This awareness will then be key for future attempts to make this move.

In terms of the details of the bill, it would effectively have allowed the tribes to offer craps and roulette games in their facilities on tribal land. It would also allow those gambling establishments with licenses to offer on-site sports betting.

There was a component by which the governor would not be able to approve gaming on off-reservation tribal land that was recently acquired, or from dealing with non-federally recognized tribes for gaming compacts.

Still a chance

There is still a chance for a new sports betting initiative as per California law. All initiatives need to be in circulation for 180 days. They also need to get certification at least 131 days in advance of the ballot. Therefore, a new initiative has until June 25, 2020 to earn a place on the 2020 ballot.

Certain companies have already signed partnerships with sports betting companies to prepare for potential legalization. MGM Resorts is in partnership with GVC Holdings and the United Auburn Indian Community.