California Sports Betting is Close to Being Legalized
As the government moves towards making sports betting legal in California, debate throughout the state will begin to rise. The largest population in the United States - and the richest economy - will soon decide whether to regulate sports wagering after the motion was raised in the senate.
Many states across the U.S. have already followed the lead of the federal government loosening restrictions. Will California send ripples across the sports betting world in 2020?
Will California Follow United States Gambling Lead?
California is typically a bit ahead of the curve when it comes to policy and political action. When it comes to betting on sports, the state has lagged behind other jurisdictions like New Jersey, Pennsylvania, and Iowa.
The opening up of sports betting across the United States continues as each state weighs the pros and cons according to their own viewpoint.
Prior to a couple of years ago, sports betting was mostly the domain of Las Vegas and a few locales around Atlantic City. The federal government’s decision to allow states to determine their own laws and regulations surrounding sports betting was codified in 2018 after lengthy debate. Some states immediately jumped on board, while others entered into a lengthy debate.
California fell into the latter category, understandably so. As the most populous state in the U.S., California is bigger than many nations. California’s economy is the fifth biggest in the world, which increases the impact of determining whether or not to accept sports gambling within its borders.
In one way or another, gambling is already a common part of the American economy. Legal gambling revenue from all sources in the United States totalled more than $158 billion in 2017, the year before the federal government removed themselves from the equation. This represents a nationwide acceptance of wagering, instead of a local phenomenon in Vegas and Atlantic City.
Indeed, much of the vacuum has been filled with online sportsbooks, especially in areas that don’t feature specific laws on sports wagering. In countries like Canada, local sportsbooks like Sports Interaction (SIA) provide an alternative to provincial sports lotteries. California may soon feature its own market for online sportsbooks, in addition to gaining access to many of the established sites online.
Californian lawmakers always look for ways to generate revenue for the state, especially after the economic slowdown caused by COVID-19. When a pair of representatives started the debate, different stakeholders immediately started to argue over the future of sports betting in California. Senator Bill Dodd from Napa and Adam Grey from Merced raised the potential for a constitutional amendment that would allow new horse racetracks and sports betting.
However, the lobby for card rooms has also been lining up to be included as part of the push, which creates a bit more complication than expected. Regardless of the pros and cons brought up from various interests, the revenue windfall for the state will be the main motivation for many taking part in the debate.
The Governor of California, Gavin Newsome, noted that the $54 billion budget shortfall from the pandemic must be addressed. Over the next few years, projected revenue from legal sports gambling is projected to start at $200 million for the first year and balloon to as much as $700 million once fully implemented.
The plan behind California wagering would revolve around a pair of taxes for gambling. One tax would focus on gambling that takes place at a location such as a racetrack. The other tax would focus on mobile and online wagering. The online tariff would be 15% while the on-premise wagering tariff would be 10%.
Senator Dodd stated that:
Revenue from sports wagering will help us avoid teacher layoffs and painful cuts. At the same time, it will allow us to regulate a practice that happens anyway.
California is one of the sports hotspots in the world. More than a dozen teams from the NBA, NFL, NHL, and MLB compete in the state. This doesn’t include college sports, MLS soccer, and eSports, all of which add to the overall sports betting scene. Considering the large population and economy, there isn’t anywhere more fertile for regulated sports gambling.
A Decision By the End of 2020?
There seems to be plenty of momentum moving the process forward towards a vote in 2020, which would require a two-thirds majority to change the constitution of California. The next step after that would be a specific breakdown of how the state regulates sports wagering, and where it would be allowed. Will there be a string of smaller betting shops opening up or will the majority of action migrate to online sportsbooks?
Either way, there will be a variety of protections put into place to ensure that anyone who partakes in wagering does so in a way that ensures the verification of their age and identity. The technology required to assure that mobile devices are within California borders would also need to be put into place to ensure that jurisdictions are maintained.
Ultimately, it’s the people of California who will have to confirm that they want sports wagering within their borders. Assuming that two-thirds of legislators vote for the motion, the majority of California voters will have to vote to agree with the amendment brought forward by lawmakers. Traditionally, every major proposition brought forth by the California democratic system results in a lengthy fight between opposing interests, including a litany of television commercials and internet ads.
Whatever decision is made will ripple across the remaining states and the decisions that they make for sports wagering in the future.
Meanwhile, you can choose one of the below top sportsbooks where you can wager online: