California Pullls Sports Betting Bill Due to Tribal Casinos Opposition

On Monday, California Senator Bill Dodds pulled his proposed sports betting bill, SCA 6. Dodd pulled the bill due to intense opposition from tribal casinos.

The bill proposed sports betting to go to tribal casinos and racetracks, but it also would have allowed cardrooms to get games like blackjack. According to California gaming laws, cardrooms are not allowed to play house vs player games.

Both chambers of state Congress would have had to pass the sports betting bill by Thursday for it to be on the November ballot. Now, the earliest sports betting can be on a ballot is 2022. Sports betting will most likely not be legal in California until 2023, according to assemblyman Adam Gray.

On Dodd’s bill, he proposed that California would tax 10 percent of sports gaming revenue and 15 percent from mobile betting. Dodd believes the state could earn $500 million per year from sports betting.

Why Did the Bill Fail?

SCA 6 brought a lot of controversies surrounding it. First, the bill itself infringes on California gaming laws. According to state law, tribal casinos offer house vs players games where cardrooms offer player vs player games.

The bill would allow casinos and racetracks to offer sports betting. However, the bill also stated that cardrooms would provide players with house vs player games like blackjack. Tribal casinos pushed hard to shutdown SCA 6, which didn’t follow California gaming laws.

Also, the timing of COVID-19 did not help to get a sports betting bill on the November ballot. The shutdown prevented in-depth discussion amongst California citizens and state lawmakers on what it would take to legalize sports betting.

The last month turned chaotic for Dodd to push his bill through on short notice. Dodd was creating changes to the bill up until the last minute. Then, both chambers had to read over the new rules and pass the bill by June 25 for the public to vote on sports betting.

Yes, sports betting would help reduce the budget deficit that California is facing due to COVID-19. However, California lawmakers believe that slowing the spread of the virus in their state is more important than getting sports betting on the 2020 ballot.

The Power of California Tribal Casinos

Tribal casinos have a lot of power in the California gaming industry. They are an $8 billion a year industry and do not have to pay state income tax. According to Initiative 19-0029 Indian gaming in California, directly and indirectly, generated 124,300 jobs and $3.4 billion in taxes and revenue sharing payments to federal, state, and local governments, including nearly $1 billion to the State of California and $378 million to local governments, in 2016.

California tribes generate 27 percent of the nation’s total revenue from tribal casinos. So, when the casinos see a bill that will hurt their business, then they’ll make sure state officials hear them.

Before the Coronavirus outbreak, tribal casinos were working on getting a million signatures to have their sports betting bill on the November ballot. The tribal casinos were looking to have more regulation over sports betting, allowing at casinos and a few racetracks. Also, casinos did not have mobile betting on their bill

The casino’s pushback over mobile betting is that it will be harder to regulate in the state and could encourage the under-21 demographic to create accounts to gamble. However, the reality is that casinos don’t want to miss out on potential revenue.

About 85 percent of sports betting revenue comes from mobile betting in states where it is legal. Based on Dodd’s estimate of $500 million in sports betting revenue, $425 of it would come from mobile betting. In terms of the amount of money that would need to be wagered to hit $500 million, casinos would miss out on a lot of revenue if mobile betting becomes legal.

There’s no wonder why tribal casinos were trying to shutdown Dodd’s bill. The casinos were going to miss out on revenue because of mobile betting. Also, Dodd was giving cardrooms more freedom in their table games, which also was infringing on casinos’ rights.

Right now, legalizing sports betting is going to be challenging to do. All parties in the gaming industry and state lawmakers will need to come together. However, it feels like tribal casinos will have the final say on legal sports betting. If they don’t like the sports betting proposal, then they’ll continue to fight it.

What’s Next for California?

Now that Dodd’s bill is off the table, lawmakers will have an extra two years to create a bill for the 2022 November ballot. However, tribal casinos could file for an extension to get their proposal on the 2022 ballot.

Tribal casinos were unable to collect signatures due to the COVID-19 outbreak. The signatures were to help casinos get their sports betting bill on the November 2020 ballot. With the shutdown, casinos could not get any more signatures. However, they can file for an extension which would allow them another month to have a chance to collect enough signatures. If they can do that, then casinos can propose their sports betting bill in November 2022.

Also, lawmakers can work with casinos in cardrooms to find the right proposal for sports betting. They will have two years to hash out a bill that can make all parties happy. However, this might be easier said than done. Tribal casinos can quickly shut down conversations if they feel like they are on the losing end.

Many people want sports betting in California. However, the state needs to use the next two years to create a bill that works for all parties. Sports betting is coming to the Golden State; it just depends on how long it will take.