California One Step Closer to Legalized Sports Betting

A California Senate committee advanced sports betting legislation on Tuesday. A partisan 9-3 vote helped passed a constitutional amendment bill to allow sports betting in California. All Democrats voted in favor of the bill, and all Republicans voted against it.

Right now, California is facing an estimated $54 billion budget deficit due to the COVID-19 outbreak. The state needed to act on finding ways to help generate revenue. Sports betting might be something California can lean on.

There is a hearing scheduled for June 9 on the bill. The sports wagering bill has been two years in the making for California after the U.S. Supreme Court struck down the ban on sports betting.

Also, California now becomes the biggest crown jewel for sports betting. The state has 16 pro teams of the four major sports in their state, with 39.5 million people living there as of 2019.

Proposal in the Bill

California Bill SCA-6 was introduced by Senator Bill Dodd in June of last year.

First, both chambers in the California Congress will need 2/3 vote to pass the bill. After that, the bill will require a majority vote by statewide voters in November.

Sports wagering would be taxed 10 percent for in-person wagering, and 15 percent for online mobile wagering. Currently, Tribal Casinos and the most prominent racetracks in the state will be allowed to offer sports betting at their locations.

Also, casinos will be allowed to offer dice games and roulette. Cardrooms will be left out of the sports wagering mix but allowed to offer Blackjacks and Texas Hold ‘Em at private rooms.

The Senate will meet June 9 to start hashing out the details of the new sports betting bill.

Fixing the Budget

COVID-19 has left the California state budget in shambles. Right now, they are estimated to face at $54 billion deficit with a new budget due June 15 for the 2020-2021 fiscal year.

The firm Eilers and Krejcik Gaming released a report on Tuesday about the potential revenue sports betting could generate. In their report, they believe sports wagering would generate $282 million in the first six months of launch and $502 million in state taxes once the market matures.

Given the estimates, this only cuts into one percent of the budget deficit California potentially faces. Both the deficit and revenue are only projections. However, this would be a step in the right direction for the state.

As the Coronavirus passes, the state will recoup some of the losses. Right now, no one knows how long it will take for that to happen. California can lean on sports wagering as a source of revenue for the time being – if the bill goes into law.

Hurdles for Lawmakers

As talked about in last week’s article about the California Sports Betting Bill, there are a few things lawmakers will have to keep in mind when keeping everyone happy with the proposal.

First, the big players in the sports betting bill are the tribal casinos, racetracks, and cardrooms. Each stakeholder has something they’ll gain and lose from the proposal. Casinos will be allowed to have sportsbooks on-site and a few other table games, but won’t be able to go after cardrooms.

The most prominent racetracks will also be allowed to have sportsbooks, but they will not be permitted to have mobile betting for horses. Cardrooms won’t be allowed to have sportsbooks, but laws will protect them from casinos continuously coming after them for the table games they promote.

Before the pandemic hit, Tribal Casinos were creating their proposal for sports betting that didn’t include mobile betting or cardrooms. Lawmakers will see the most pushback from casinos over the sports betting bill.

Cardrooms and Tribal Casinos have gone back and forth since 2000. Each place is allowed to promote certain games, and casinos believe that cardrooms are pushing their boundaries on the cardgames they’re allowed to play.

With the new bill, casinos will not be allowed to go after cardrooms anymore. Also, casinos didn’t plan for the idea of mobile sports wagering. They could see this as a threat to their sportsbooks if people can bet from their phones.

Everyone sacrifices a little to gain a lot. Now, it depends on if all parties are going to play ball.