Why Hasn’t California Legalized Sports Betting?

Legal sports betting is increasingly becoming the standard in the United States. More than half of the U.S. now approves of it. Entering the second half of 2021, nearly 30 states have officially greenlit it or passed a bill that’s expected to do so by the end of the year. This represents a huge uptick over where we were 18 to 24 months ago.

This progressively friendlier stance on sports betting is hardly surprising. Just as gamblers leave money on the table by not taking advantage of sportsbook betting bonuses and specials, states are costing themselves hundreds of millions, if not billions, of dollars in potential revenue by not boarding the legal wagering train. 

In contemporary society, it just makes sense to have government-approved physical sportsbooks and mobile betting options. And yet, a handful of states remain holdouts. The most puzzling among them is California. 

Not only is it the most populated state by roughly a 10-million-person margin, but it is also one of the most progressive. And left-leaning states have, for the most part, been quicker about pouncing on sports-betting opportunities. 

So what gives? 

In a nutshell, state tribes want to have the power to offer sports-betting options exclusively. Gambling is currently limited to card rooms, tribal casinos, the state lottery, horse racing and charitable gaming, and the worry is that expanding the boundaries of sports betting will eat into their revenue and business.

Various bills over the years have been successfully blocked by those opposed to adding more sports-betting options to the table. Granted, these moves have come at the expense of tribal casinos, as well. They have not been allowed to open retail sportsbooks to this point.

Recently, though, a new initiative qualified for consideration on the November 2022 voting ballot. Under this proposal, California residents would have the ability to bet on sports at tribal casinos and horse-racing tracks. 

Of course, this creates a finite list of potential sportsbooks providers. Card clubs, for example, would not have the capacity to offer sports-betting opportunities. They, along with non-tribal sportsbook operators who wish to break into the California market, are expected to heavily rail against the proposed amendment to the state constitution by arguing that it only furthers the monopoly on the gambling industry held by tribal casinos and race tracks.

This inability to reach a consensus isn’t helping anyone. Everyone, in fact, is being inconvenienced by it.

First and foremost, you have the California residents. Sports betting is now legal in a handful of surrounding states, California something of an anomaly. Sports fans should have to cross the state lines just to place a legal bet. Gambling is ingrained into the fabric of sports fandom. Professional leagues even have partnerships with certain sportsbooks.

After that, you have California’s own wallet. Experts project that state-wide approval of sports betting would generate more than $1 billion in extra local revenue per year—and that’s just to start. It is widely known that California is the most desirable sports-gambling market, given both its demographic size and the number of pro and college sports teams that populate the state. That number could easily grow in a couple of years. 

Missing out on this much revenue is wild for obvious reasons; $1 billion is a ton of money no matter the context. But that cash flow would mean even more to the state on the heels of the coronavirus pandemic that harshly impacted every localized economy in the United States. 

Businesses needed to shut down, and even though restrictions have been for the most part lifted, the way people go about their daily life has changed forever. Most notably, they are working remotely more, and spending more time away from a physical office means they’re spending more time at home or even moving out of the state entirely. 

Offering physical sportsbooks is one way to incentivize people to keep going to casinos. And offering that in tandem with legal mobile opportunities likewise ensures that casinos can capitalize off an economy that’s increasingly leaning towards remote spending while also guaranteeing the state doesn’t lose a ton of revenue to gambling that’s taking place anyway.

And that’s the big thing to take away from all this: Sports betting in California is happening anyway. The difference is, by making it legal, the state itself can get a chunk of money already being spent. Yet because existing and prospective gambling operators cannot find common ground, the state remains at a gridlock, and it remains to be seen if sports betting will be legally available in California anytime soon.