November 2020 has emerged as a key month for US sports betting, perhaps the key month given that it may well offer Californians an opportunity to vote on whether or not to allow legalized sports wagering in America’s most populous state.
The prospect of such a ballot was made all the more real this week when California’s Attorney General gave the go-ahead for a tribal coalition to gather support for gambling proposals that would facilitate betting on professional and college sporting events within the confines of their casinos and at racetracks.
It all sounds positive, although the coalition will need to attract one million signatories to support the proposals. And it faces a battle with the state’s card room operators who argue that they are being left out in the cold – unfairly so.
Looking specifically at the proposal, it would allow federally recognized Native American tribes to operate roulette, dice games, and sports wagering on tribal lands, subject to compacts negotiated by the Governor and ratified by the Legislature.
Effective from 2022, on-site sports wagering would be allowed at privately operated horse-racing tracks in four specified counties for persons 21 years or older. There will be a 10% tax levied on sports-wagering profits at horse-racing tracks, with a portion of revenues directed to enforcement and problem-gambling programs.
California’s policy makers are also anticipating a welcome increase in state revenues, potentially reaching tens of millions of dollars annually, from payments made by facilities offering sports wagering and new civil penalties authorized within the tribe’s proposals.
A portion of these revenues would reflect a shift from other existing state and local revenues and there is an expected hike in state regulatory costs, potentially reaching the low tens of millions of dollars annually. But the latter issue is likely to be balanced out by the increased revenue or reimbursements to the state.
The grit in the Vaseline, as far as the 18-strong tribal coalition is concerned, will be resistance from California’s 70-plus card rooms who are already said to be preparing a legal challenge to ensure they are included in any sports betting scenario. The issue will be fiercely contested. But the tribes, who are closely allied with state policy makers, appear to have a clear advantage.
There is also competing legislation from State Assemblyman Adam Gray and State Senator Bill Dodd who have launched bills that would offer voters another, more inclusive, option than that proposed by the tribes. That, however, must win a two-thirds majority in the legislature before it will even be considered and, again, will face push back from the tribes.
While industry observers are clearly keen to see a regulated sports betting environment in California, question marks still remain over a set of proposals that crucially lacks any measures to introduce mobile gaming.
In a state which is home to circa 19 professional sports teams across MLB, NBA, NFL, NHL, MLS and a plethora of college outfits, the absence of mobile betting legislation will be viewed purely and simply as a lost opportunity. It’s not an opinion that will be shared by tribal interests. But for potential market entrants and, importantly, the sports leagues it begs the question – what’s in it for them?
In the words of the Kings of Leon – “…California waiting, every little thing’s gotta be just right”!