Current Hurdles for California Sports Betting Legislation: Starts with Tribal Casinos
California isn’t short on gambling options. There are 69 total Native American Casinos which includes 50 Indian casinos in the state. There are thought to be approximately 100 card rooms with maybe 80% of those being legal. There are 5 Racetracks where you can bet on horse racing. However, when it comes to sports betting, California falls short. There are currently no sports betting bills on file in the Golden State. Not only is there a lack of sports betting bills, but there also seems to be no priority to introduce any in the state anytime soon. Why? We took a look under the hood.
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Why No Sports Betting In California?
The lack of push for sports betting in California is a result of the position of the state’s tribes. The tribes have been using their political power to kill any serious sports betting legislation over the past year. The tribes have shown that they will contest any sports betting activities in the state, no matter how much it costs.
In California powerful tribal interests that control most casino gambling are reluctant to reopen their agreements with the state. They have no desire to share the gambling market with other players, including the state’s card rooms and racetracks.
Gambling in California is largely controlled by casino-operating tribes that have compacts with the state. The tribes that are part of the California Nations Indian Gaming Association oppose an expansion of gambling that includes sports betting. The tribes don’t want to see any more competition from the state’s card rooms and racetracks by allowing sports betting. They seem to be content with everything staying the way it is in California in terms of gaming.
Any attempt to allow sports betting would require a statewide vote to amend the constitution. That alone is a big hurdle. Add in the opposition from the state’s tribes, and you can see why sports betting is having a hard time finding its way to California.
Revenue Issue
California isn’t getting the same amount of money from tribal gaming that it did in the past. Actually, it’s astonishing how much less it actually is. In 2016, tribal gaming accounted for $330 million in the California general fund. Now, due to the revenue-sharing agreement between the state and the tribes being thrown out by a federal court, that number is down to a measly $3.6 million.
Sports betting revenue in California could potentially reach $100 million in its first year. As much as that is, it’s not much compared to the state budget of nearly $180 billion a year. Such small revenue in comparison to the state budget doesn’t make sports betting a high priority in California.
Will Sports Betting Come To California Soon?
The way it currently stands, it seems California would need a constitutional amendment for sports betting to be legalized in the state.
In the event California sports betting does become legal, the United Auburn Indian Community made preparations and made a deal with MGM and the online gambling company GVC. The deal allows the two to run any potential sportsbook at the Thunder Valley Casino Resort location. Despite this deal, the tribe’s lawyer, Howard Dickstein, said that the tribes don’t want sports betting to come to California. “The tribe is not a strong advocate of legalizing sports betting under any circumstance,” he said. “The agreement with MGM is an insurance policy to become allied with a leader if and when it becomes legal in California.”
However, Dickstein noted that tribes would welcome the idea of sports betting, so long as the tribal casinos would control the entire sports betting market in the state. If betting were to be allowed at the state’s card rooms and racetracks, the tribes would not be onboard. California tribes do not want to risk renegotiating their existing agreements with the state. To the tribes, the small revenue from sports betting isn’t worth risking their $8 billion industry.
It appears the state’s tribes have control over sports betting in the state. Unless California wants to grant the tribes a monopoly on sports betting, the state may not be seeing legal sports betting anytime soon. If the state does grant the tribes the exclusive right to sports betting you can certainly expect the racetracks and card rooms to oppose the decision. The state of California appears to be caught between a rock and a hard place. There are some serious considerations for Tribal Casinos with their revenue decline. Can Tribal Casinos utilize sports betting without losing a hold on the gambling market? How will the online sportsbook market leaders navigate this battleground? DraftKings & FanDuel have shown creativity in achieving their goals and I would expect no less from them in California. Eventually, it seems logical that all parties involved would find a way to implement legal online California sports betting.
However, in the immediate future, it appears that legal sports betting in CA has a number of significant hurdles to overcome before becoming a reality.
