California Inching Towards Legal Sports Wagering

Tribal representatives in the state of California are now tasked with getting signatures to have sports betting referendum on the ballot in November of this year. Recently, the state came out and published a title, as well as a name, for the ballot initiative that was brought forward by the state’s 18 Native American tribes.

Now the tribes can start to try to get a million signatures to have the sports betting initiative added to the November ballot.

In the initiative’s text is a page that makes promises that in California, there is a potential of “tens of millions of dollars” of revenue from taxes as opposed to “low tens of millions” for regulatory costs.

The initiative in question would allow for sports betting, as well as the legalization of roulette and dice games, to take place at the tribal casinos in California. These things would also be legal at the racetracks in the state.

However, they would not be legal at the card rooms and locations such as venues that house where professional teams play. November of last year is when this initiative was filed, and now the California tribes have until late June of this year to garner the signatures from residents.

When they get 25 percent of the total amount of signatures needed, they will need to report that to the Secretary of State.

Missing Out

According to the initiative, there would be a tax rate to the tune of 10 percent on gross gambling revenue on sports wagers made at California racetracks. There would be no legal wagers made on college teams in the state, and on top of that, mobile wagering would not be available.

That point is a big one considering that if you look at other states that have mobile sports wagering, it is the lion’s share of their revenue.

For example, in 2019, nearly 90 percent of the handle from sports wagering in the state of New Jersey came from mobile bets. This fact may be a little offsetting to potential operators because now allowing for legal wagering on state college games would bring the black market into the equation.

It has been shown that most of the money from sports wagering in the U.S. has come from mobile gaming.

Not having legal in-state college betting is a big issue that the new initiative overlooks. Not only is California the most populous state, but there are many big collegiate programs, especially for football and basketball.

While more gaming would be available at the land-based casinos in the state, California would still lose out on a significant amount of revenue, like New York has, by only allowing sport betting at those casino properties.

Like other tribes in the U.S., the ones in California have kept wanting to keep mobile gaming out of the equation. Basically, the tribes are under the belief that mobile sports betting will take away from their land-based casino revenue.

The California ballot initiative that promises the state additional revenue without taxation may be enticing. The typical resident that votes may not know the full balance of the initiative in question or what is not there, such as mobile wagering.

However, California lawmakers, as well as card rooms, are working on their own proposals for the gambling issue.

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