The push towards legal sports betting in California takes a step closer to helping patch up the Golden State’s huge budget deficit. The California Senate Governmental Organization Committee recently voted to pass a bill to allow legal sports betting in California. It has been passed on as a constitutional amendment to the Senate Appropriation Committee.
Assemblyman Adam Gray and Senator Bill Dodd introduced the bill, and played a vital role in capturing a 9-3 vote from the committee. The constitutional amendment to allow legal sports betting in California could help the Golden State resolve its estimated $54-billion-dollar budget deficit.
The bill would legalize both in-person and online sports betting, with retail sportsbooks at tribal casinos and racetracks.
If legal sports betting in California is passed into law, it could bring in more than $280 million in the first six months and more than $500 million in state taxes once the market matures, according to an analysis by Eilers Krejcik Gaming and the Sacramento Bee.
Dodd said he thinks legalizing sports betting in California would bring the state closer to capitalizing financially on something that is already taking place regardless of its legal status. It’s been estimated that California residents place at least $10 million in illegal bets every year. With illegal betting already taking place in this fanatical sports state, legalized sports betting in California could be one of the most successful markets in the country.
Legal sports betting in California is not guaranteed
Despite the legislative steps taken so far, there’s no guarantee that legal betting in California will become a reality by the end of 2020. The fact is, for a constitutional amendment to get on the ballot, it needs a two-thirds vote from the legislature before also winning a majority vote during the November statewide elections.
The Golden State’s tribal casinos also are opposed to the bill, believing that online gambling websites don’t deserve the increased gaming revenue the bill would grant them. This is despite the opportunity for the tribal casinos to establish their own lucrative retail sportsbooks.
Legal experts also note that federal law regarding Native American tribes could be an obstacle to internet sports betting. Thus, the proposed initiatives would also allow roulette and craps at tribal casinos, to increase the revenue for the tribes.
The Golden State is ripe for legalized sports betting
If legal sports betting in California does become a reality, it will thrive in a state like California. Not only is the Golden State home to 15 professional sports teams spanning the breadth of the four biggest leagues in the country, but it is also home to the country’s largest state population; California boasts 40 million residents, many of whom are sports fanatics.
In contrast, New Jersey only has a population of around 8.8 million, but it has generated $62 million in gambling tax revenue over just the last two years. Multiply that by five, and you can see the potential for taxing legal sports betting in California. The fact is, California could easily overtake New Jersey and Nevada as the sports betting capital of the country.
Legal sports betting in California could rake in $2.5 billion in gross annual revenue, which would easily become the largest market in the country. That’s according to Chris Grove, a managing director for research and consulting firm Eilers and Krejcik Gaming LLC. That sports betting market could generate $250 million to $500 million in tax revenue for the Golden State based on whether the tax rate is set at 10% or 20%.
“It is clear that we’re quickly heading towards a well-thought-out, framework of legal sports betting in California,” Gray said at a state legislative hearing. “We need to create a framework to ensure regulatory oversight and offer consumer protection to get this long-standing sports betting activity out of the illicit black market.”