California is a little late to the party when it comes to legalizing sports betting, given that 32 other states have done so in some form or another. The battle between competing interests in California has begun, and voters will almost certainly be forced to choose between multiple sports wagering ballot measures this November. The game, however, has already begun in California.
After the state of New Jersey successfully petitioned the United States Supreme Court in 2018 to overturn a federal law that prohibited legalized sports wagering anywhere other than Nevada, a flurry of activity ensued at the state level, resulting in more than 60 percent of states having some form of legalized sports betting.
For a long time, California has allowed various forms of gambling, such as the lottery, pari-mutuel horse racing, card rooms, charitable raffles, and Native American-owned casinos. Except for Utah and Hawaii, every state allows some form of gambling, whether it is legal or not. These activities are estimated to generate more than $30 billion in annual tax revenue for state and municipal governments across the country, with sports wagering accounting for more than $1 billion of that total. The prospect of more tax revenue generated by regulated sports betting makes the idea of bringing it to California even more appealing to state officials.
Sports betting can take many different forms. It’s worth noting that illegal sports betting, which has traditionally been the domain of organized crime, is expected to generate between $50 and $200 billion in total wagers each year. This is still a drop in the bucket when compared to what is happening in the legal betting market. Illegal gambling is likely to persist because it offers better odds to customers than the legal market, which is required to consider licensing fees and tax revenue that must be passed along to a variety of government treasuries. This means that illegal gambling will most likely continue to exist. Furthermore, illegal sports betting has the advantage, albeit a potentially dangerous one, of accepting bets “on credit,” which means that the bettor does not need to first deposit money up front, as legitimate sports betting does.
The possibility of numerous wagering proposals appearing on the November ballot in California is large because legal sports betting can be conducted in a variety of ways. As with the majority of these businesses, follow the money.
The first type of legally sanctioned sports gambling would be wagers placed in person at one of California’s Tribal Casinos or one of the state’s four racetracks. The proposed California Sports Wagering Regulation and Unlawful Gambling Enforcement Act is based on this premise. The act, which has the support of Tribal Casino owners and claims to reduce the possibility of underage gambling as well as fraud, aims to address both of these issues.
The second type of legitimate sports gambling is done from a remote location via the internet, and the California Solutions to Homelessness and Mental Health Support Act is attempting to make this a reality. Although the act’s title excludes gambling (possibly in an attempt to mislead), a portion of the proceeds will be donated to organizations working to end homelessness in California. Some of the most well-known names in the online gambling industry, including Draft Kings and Fan Duel, have backed this initiative. As previously stated, its primary competitors are Native American tribe-operated casinos.
A third competing proposal on the ballot is called the Age-Verified Tribal Online and In-Person Sports Wagering Act. In a hybrid version of the first two ideas, this plan covers the entire ball of wax and allows for both in-person and online sports wagering.
The California Office of the Legislative Analyst anticipates that the state will generate tens of millions of dollars in tax revenue from in-person sports betting and hundreds of millions of dollars from online or hybrid betting that combines in-person and online wagering. Because the stakes are so high, not only for casinos and online gaming companies but also for the state treasury, the advocacy for legalized sports gambling in California and the run-up to November may be the most expensive ballot proposition battle in California history. This is due to the high stakes for casinos and online gaming companies, as well as state treasuries.
The advantages and disadvantages of allowing people in California to legally gamble on sporting events are obvious. Why shouldn’t taxpayers get a cut of the profits from illegal gambling, given that it’s firmly established as one of society’s favorite vices and isn’t going away anytime soon? Because sports betting is already legal in more than 30 states, California is already at a disadvantage because residents who want to gamble legally must travel out of state. As a result, the state of California is already losing money. Why not confine that activity to the borders of our country? After all, California has the most professional sports teams per capita than any other state. There is a chance that a second gold rush will occur. Is it such a bad thing if our MPs can fulfill their pledge to direct funding to the root causes of our country’s homelessness and mental health problems? There is also the potential for the creation of numerous jobs in the sports gaming industry, though this will depend on the final form that legalized sports gambling takes.
What are the potential drawbacks of allowing legalized sports betting in California? There is no doubt that the variety of gambling available online, including sports betting, may be regarded as riskier than traditional wagering done in person. With the touch of a button on your mobile device, you can place a wager. With the proliferation of online gambling, particularly sports betting, there was an expected increase in gambling addiction. Younger people are more likely than older people to be affected by gambling addiction. Unlike alcoholism and drug addiction, there are no visible physical manifestations of the disease. It is, in essence, an invisible addiction. Since the Supreme Court’s decision in 2018 that made it easier to participate in sports betting, there has been an increase in the number of people seeking and receiving help for gambling disorders.
The potential for the laundering of money obtained dishonestly is one of the risks associated with legal gaming, and this risk should not be overlooked. Both the gaming industry and law enforcement are concerned about the potential for increased opportunities for the laundering of illegally obtained funds if internet gambling grows in popularity.
Historically, sports organizations such as Major League Baseball (MLB), the National Football League (NFL), the National Basketball Association (NBA), the National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA), among others, have been opposed to the expansion of legally sanctioned sports gambling, fearing that it would lead to cheating scandals that would jeopardize the game’s integrity. Gambling on sports, on the other hand, increases interest in the game as well as the number of people who watch it. An increase in the number of viewers leads to an increase in revenue that can be measured in the millions, if not billions, of dollars.
It is now standard practice for sports broadcasters to devote portions of their programming to segments sponsored by online gambling websites. These segments frequently include an in-depth examination of the betting odds for the various teams and players who will be taking part in the day’s games. Many of these sports organizations appear to have accepted the fact that legalized sports betting is here to stay and have decided to profit from it.
Given this, what are the chances that the people of California will vote in November to legalize some form of sports betting? A survey recently made public by Cal Berkeley provides some preliminary insights. The proportion of registered voters who support legalizing sports betting is 45 percent, while 33 percent oppose it. The poll found that 22% of those polled are still undecided, but given that millions of dollars in advocacy funds are likely to be spent in the coming months, it is reasonable to assume that the majority of those who are undecided will be swayed in favor of legalized sports wagering. And if I were a betting man (which I am), I would lay odds of 3 to 5 that Californians will be able to legally wager on Super Bowl LVII, which will be held in February 2023.