Longshot Sports Betting Bill Surfaces in California

While smaller states nationwide are busy launching legal sports betting industries, the nation’s largest economy is finally taking its first steps on that front. A California sports betting bill has subsequently been been proposed for consideration.

California Sports Betting Bill Floated

Assemblyman Adam Gray (D-21) and state senator Bill Dodd (D-3) – who serve as chairmen of their chambers’ respective Governmental Organization Committees – have introduced a constitutional amendment known as ACA 16. And while the legislation itself is currently just a shell bill waiting to be drafted in detail, its purpose is to put the issue of sports betting to voters via the 2020 ballot.

This marks the third straight year that the State Legislature has floated a California sports betting bill amendment. However, both efforts died on the vine amidst intense lobbying by the Golden State’s powerful tribal gaming operators.

Gray and Dodd introduced ACA 16 on June 27, a little over two months after an organization called Californians for Sports Betting failed to garner a single signature from the 623,000 required registered voters. That failure wasn’t due to a lack of public support for sports betting regulation, though, but rather hesitancy on the part of wealthy donors to fund a petition drive in the first place.

California law requires the state’s Constitution to be amended in advance of any gambling industry expansion.

ACA 16 would add a referendum to the 2020 ballot, but for that to happen, the Legislature must sign off with a two-thirds majority vote in both chambers.

Sponsors Offer Statements on Need for Regulation

In a jointly issued press release, Gray referenced the May 2018 ruling by the U.S. Supreme Court which overturned a federal ban on sports betting outside of Nevada:

“The U.S. Supreme Court has shouldered the burden of bringing legal clarity to the issue of sports wagering and the rights of states under the Constitution. Now it is the responsibility of the Legislature to determine the most prudent way forward.”

Since the Professional and Amateur Sports Protection Act (PASPA) of 1992 was repealed as a violation of the Tenth Amendment’s anticommandeering doctrine, eight states – Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania, Rhode Island, and Arkansas – have launched legal sportsbooks in either the brick and mortar and/or online / mobile setting.

Arkansas became the first state to do so on July 1 of 2019, while New Jersey’s thriving industry recently surpassed Nevada in terms of total wagering “handle”for the first time ever.

Eight other states, along with Washington D.C. have also passed sports betting regulations that are awaiting implementation.

Gray also pointed to the rampant unregulated betting market, served by offshore operators, which is currently operating in jurisdictions like California:

“Whether we like it or not, Californians are already betting on sports through illegal and often unscrupulous websites in foreign countries. It’s time to shine a light on this multibillion-dollar industry. We need to crack down on illegal and unregulated online gaming and replace it with a safe and responsible option which includes safeguards against compulsive and underage gambling, money laundering and fraud.”

Gray added: “All other gaming activities in California are subject to regulations that ensure the safety of consumers. Sports wagering should be treated no differently.”

For his part, Dodd made overtures to “stakeholders” like the tribal gaming operators who have historically opposed any attempts to expand gambling outside of their purview:

“I look forward to working with stakeholders in a collaborative effort to help bring this out of the shadows. By legalizing sports wagering, we can avoid some of the problems associated with an underground market, such as fraud and tax evasion, while investing in problem gambling education.”

Chances for Full Passage Remain Slim

Industry analysts Eilers & Krejcik Gaming estimate a mature California sports betting industry -which would include online / mobile wagering options – could generate $2.1 billion in annual taxable revenue.

But despite that clear economic impetus for the state, its influential tribal gaming lobby is likely to dig in its collective heels to block the California sports betting bill from becoming law.

Steve Stallings – who serves as chairman of the California Nations Indian Gaming Association (CNIGA) – recently told the Washington Examiner that the tribes aren’t interested in adding competition to an already crowded marketplace:

“We feel like protecting the industry in California is more important.”