Sports Betting in California To Have Its Day Before Voters in November

Sports Betting in California To Have Its Day Before Voters in November
By Christopher Boan
Fact Checked by Michael Peters

We’re still more than 200 days from Election Day, but a theme has emerged surrounding the future of sports betting in California.

The most populous state in the U.S. could have no fewer than two initiatives on the ballot this fall to legalize some form of sports betting in the state, which could clear the way for the Golden State to join more than 30 others and the District of Columbia that have already done so.

One initiative has already gathered enough signatures to qualify for the ballot (California Legalize Sports Betting on American Indian Lands Initiative), with another closing in on the required number of signatures (California Legalize Sports Betting Initiative).

What Each Sports Betting Initiative Entails

The dueling sports betting ballot drives hope to legalize wagering in some form, though they’d do so in differing manners.

The tribal lands initiative is being spearheaded by nine California tribes that have spent more than $12.5 million to get the question on the November ballot. That initiative would allow state-based tribes to offer sports betting on professional, college or amateur sporting events, except for high school sports and events featuring state colleges.

The tribal initiative would also legalize Las Vegas style gambling activities, such as roulette, dice games, and craps at tribal casinos.

The tribal initiative would only permit retail sports betting, with money going toward problem gambling prevention and mental health care.

The other initiative, which has received support from mobile sports betting mainstays, like DraftKings Sportsbook and FanDuel Sportsbook, would allow mobile sports betting in California.

The second initiative would allow tribes, licensed racing associations, licensed gaming establishments and professional sports teams to offer sports betting — with a tax rate of 25% and funds going toward ending homelessness in the state.

What Are the Odds Either Initiative Passes?

Whether either sports betting ballot initiative passes in November remains to be seen, though there certainly appears to be support for legalizing sports betting in California.

A Berkley Institute of Governmental Studies survey in late February found 45% of respondents were initially inclined to vote yes on either sports betting initiative, versus 33% who said they wouldn’t.

The same poll found a large portion of Californians are undecided on sports betting’s place in the state, with 22% of respondents saying they did not have an opinion.

Mark DiCamillo, the director of Berkeley IGS Poll, said his department’s survey speaks to how apathetic the public is to sports betting.

“What we found was that support is kind of lukewarm,” DiCamillo told BetCalifornia.com. “This is still in the very early stages. And as I understand it, there may be competing initiatives on the California ballot, and huge amounts of money being spent on the campaign. So, this will get much greater visibility as we get closer to November.”

One thing that surprised DiCamillo about the IGS survey results was the lack of partisan difference when it came to approval of sports betting in California, with a greater indicator of support resting in a respondent’s feelings about sports at large.

The IGS poll found respondents that expressed a lot of interest in professional sports supported sports betting by almost a three-to-one margin (63% to 22%), while 33% of respondents who identified as being without interest in sports favored the amendment.

“I would say about half of the state is not a sports fan, that they're saying they only follow professional sports a little or not at all. And those people are more resistant to the initiative,” DiCamillo said. “So that's where the challenge is going to be for the (sports betting) industry. As they look at this constitutional amendment on the ballot, they're going to have to convince those who don't typically follow professional sports that this is a good idea, and good public policy.”

One group hoping to shape the minds of voters on the issue is Taxpayers Against Special Interest Monopolies, a committee sponsored by licensed card clubs in the state. The group issued a press release in late March stating its opposition to the tribal initiative.

The press release claims the initiative, if passed, would give tribal casinos a near-monopoly on all gaming in California.

"The California Contract Cities Association overwhelmingly voted to oppose the qualified tribal gaming initiative as it will not benefit our residents or communities," Marcel Rodarte, the executive director of the California Contract Cities Association, said in a press release. The CCCA represents 74 cities in the state, including Los Angeles.

What California’s Sports Betting Market Could Look Like

Jeff Ifrah, a founding member of Ifrah Law, which specializes in online gambling law, said California’s sports betting rollout could be a turning point for the industry in America.

Ifrah agreed with estimates that pin California’s sports betting market potential at around $3 billion by the time it reaches maturity — which would nearly double the national handle record of $1.6 billion set by New York in February.

The key thing, Ifrah told BetCalifornia.com, is how long it takes California to roll out sports betting, regardless of which initiative is successful.

He cited the stalled rollout of sports betting in other markets that legalized it via initiative, such as Maryland, in cautioning it could be upwards of five years before California’s sports betting market comes online.

“I think it could be three to five years following a voter referendum in California, it could be three to five years until sports betting is actually live there,” Ifrah told BetCalifornia.com.

Ifrah added the state’s actual market value will depend on the language in whatever gaming compact is approved, along with a host of other factors.

One thing for sure, in Ifrah’s opinion, is the American sports betting industry is counting the days until California sports betting becomes reality.

“I think everything from Day 1, when (the American sports betting) market went live, everything was focused on California,” Ifrah said. “I think that the reason why operators have been willing to essentially bet that and gamble on this vertical is because of California.

“Another way to say that is that I think without California, operators are going to really review what they're spending on customer acquisition and what they're offering their customers because all these operators eventually do need to become profitable.”

The ability to add California and its more than 40 million residents to their bottom lines could prove to be a make-or-break factor for several sportsbook operators, Ifrah said.

“I think that without California and without a competitive tax rate in California, it's going to be very difficult for these operators to continue to operate,” Ifrah added. “It’s going be very difficult for them to maintain the status quo is what I would say.”

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Contributors

Christopher Boan
Reporter / Journalist

Christopher Boan is the lead writer at BetCalifornia.com, specializing in sports betting issues in the western United States. He's covered sports and sports betting in Arizona for more than seven years, including stops at ArizonaSports.com, the Tucson Weekly and the Green Valley News.

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