Prospect of California sports betting presents big opportunities, headaches, and challenges

Prospect of California sports betting presents big opportunities, headaches, and challenges

  • John L. Smith, CDC Gaming Reports
September 1, 2021 11:56 PM
  • John L. Smith, CDC Gaming Reports

The dense smoke obscuring the future of sports betting in California doesn’t quite rival the acrid clouds billowing from the state’s tragic wildfires. That metaphor is overstated.

But it’s hard to blame anyone for being confused by the state of play there. At a time when a parade of legalization is winding through the country and states long opposed to bookmaking and sports gambling have more than warmed up to the idea, California’s controversy seems almost counterintuitive. If anything, you would think it would have found a way to be among the leaders in the liberalization of the last of the gaming industry’s pariah activities.

Back in May, the state’s Native American tribes finished collecting approximately 1 million signatures in their effort to place their own sports betting initiative on the ballot in November 2022. It’s what many have considered a reasonable resolution to a protracted debate: Sports betting would be legal at tribal casinos and racetracks and for the first time, the Native American operations would be able to offer roulette and craps. The state’s 19 professional sports teams would also receive licenses.

With billions of potential profits at stake, it was only a matter of time before the state’s card-room operators kicked up their efforts a notch. On Aug. 9, a proposed statewide ballot initiative titled the “California Sports Wagering and Consumer Protection Act” was submitted to California Attorney General Rob Bonta’s office.

Bay 101 Casino Tournament Area flickr photo by World Poker Tour shared under a Creative Commons (BY-NC) license

The state’s card-room operators have garnered support from the cities of Gardena, San Jose, Inglewood, and Colma and in August, a group called the “Cities for Responsible Sports Betting” sprouted from the political Astroturf. Obviously, the card-room kings aren’t giving up easily.

And card-room executives are finding no shortage of friends in local politics. As Gardena Mayor Tasha Cerda told Howard Stutz of The Nevada Independent, “We feel like sports wagering belongs to everyone.”

And everyone wants a piece of the action.

With billions in potential sports betting revenues and the future of their arguably antiquated business models at stake, they can’t afford to quit.

Even more intriguing is the entry into the mix of online sports betting giants DraftKings, FanDuel, and BetMGM, which plan to spend up to $100 million on an initiative that link legalization with a fund to fight homelessness and improve mental-health services. As its campaign manager Dana Williamson told POLITICO, “Permanent solutions require a permanent funding source. The California Solutions to Homelessness and Mental Health Support Act will raise hundreds of millions of dollars annually to fight homelessness and expand mental health support in California by allowing regulated entities to offer safe, responsible sports betting online.”

Now that’s what I call a carrot.

Shutterstock

From BetMGM CEO Adam Greenblatt’s recent statement: “As we’ve seen in states where BetMGM currently operates, regulated sports betting brings in tax revenue that supports important causes – in this case finding solutions for homeless and mental-health support.  Mobile sports betting also creates jobs and through BetMGM’s partnership with GameSense, we ensure that mobile sports betting is delivered together with industry leading responsible gaming protocols.”

The online plan does not appear to conflict with the tribal gaming industry effort.

For those keeping score, that makes at least three well-financed plans for sports betting legalization in California – all promising to do good things for people.

If California ever manages to untangle its political knot associated with sports betting, Nevada’s legal sports books could face unprecedented competition. The current ballot-initiative battle has bought legal bookmaking operators some time to get even more creative with their destination sportsbooks and licensing agreements. Their own future likely depends on it.

Win, lose, or tie, those who imagined a coordinated effort toward a smooth transition into legalized sports betting in California have been dreaming.