Sports gambling could be coming to California in the near future.
While 22 states have legalized sports gambling since the Supreme Court’s ruling in 2018, California has lagged behind due to a number of roadblocks. But state Senator Bill Dodd (D-Napa) and Assemblymember Adam Gray (D-Merced) have been working on an amendment to the state’s constitution that will go on the ballot in November if it can get through both houses.
As the bill hopefully nears the finish line, both Dodd and Gray hope to get as much support from the sports leagues as possible.
“I think the leagues themselves are really the experts when it comes to keeping integrity of the games,” Assemblymember Gray told NBC Sports Bay Area. “Obviously, in our proposal we’ve banned any high school sports betting and as we put the finishing details on this over the next few weeks it’s going to be important that those leagues engage with us on those final details to make sure that we have the highest quality product with the highest quality standards. And although they have been a little timid, I know that many out there in the sports world know that the future of the sports economy could be integrally tied to the success of sports wagering, fantasy sports and other activities.
“So hopefully we are going to have that engagement and tie up these details so that we can have the best product.”
Both Dodd and Gray would like to see everyone from the leagues and local teams get involved in supporting the initiative.
“I’d like to see the players, I’d like to see the executives, the leagues, the teams get engaged,” Gray said. “I think oftentimes industries don’t raise their voice at the state capital like they should. Players don’t raise their voice at the state capital like they should. But more importantly what we have to do here is something that benefits each and every community, make sure we’ve got the right tax revenues, the right protections.
“But yeah I’d love to see more engagement.”
MLB, the NBA, NFL and PGA Tour have shown their support in written letters backing the bill, with the Warriors, Giants and A’s among teams who also were on the letterhead. Dodd believes the success of sports wagering in California will be beneficial to the leagues, teams and players and is a reason they should get involved in the push.
“I think it’s good for the interest in their game which helps them at the end of the day in their ability to attract more fans and that kind of rolls down to the higher salaries in the end because more people engaged helps everybody,” Dodd said.
With California facing a $54 billion deficit due to the coronavirus (COVID-19) pandemic, state legislators are looking for a way to increase revenue without cutting money for schools and social programs. California’s push to legalize sports gambling has faced pushback from local tribal leaders who claim the legalization of online sports gambling ultimately would negatively impact their business. To try and bridge the gap between the two sides, Dodd and Gray put in a rollout period in the amendment to hopefully help ease those concerns.
Should the bill pass in November, then sports gambling would become legal at brick and mortar institutions like casinos and race tracks in September of 2021. In September of 2022, those institutions can start registering people for online and mobile gambling and then online and mobile gambling would be widespread by September of 2023.
“That touches on that brick and mortar aspect of protecting those jobs, protecting the economy,” Gray said. “A transition that ensures that our brick and mortar facilities — whether we are talking about our race tracks or our casinos are protected — allows them to play an integral role in developing the market here in California by staggering it and allowing people to engage in sports wagering and online sports wagering through those brick and mortar facilities first.”
The bill estimates that California could earn $200 million from sports wagering in its first year and an extra $500 million once everything is up and running with unknown room for growth in a state that almost has 40 million people. The state would tax in-person wagers at 10 percent and moblie and online wagers at 15 percent. They plan on taxing winnings over $1 million.
Millions of Californians already gamble illegally whether it be through offshore books or local bookies. So, why would those citizens ditch the current mode of gambling for one that is state-sanctioned? While Dodd and Gray admit that it might be a slow burn in the first year when only in-person wagering is allowed, eventually the security of legal gambling will win out.
“It’s obvious that when you gamble illegally or conduct any activity illegally there’s risk involved,” Gray said. “You may or may not get money. We’ve all read stories on some of the activity in the illegal and fantasy sports wagering market where people have lost their money or had other bad experiences. In addition to that, there’s a certain value in brand that we trust. Whether you are used to doing business with a DraftKings or a FanDuel or maybe you’re an MGM or Caesar’s fan and here in California all of our tribal casinos. These are brands people trust, facilities they are visiting and I think those brands here in California have a lot to offer as far as a customer base goes, they have a lot to offer compared to national online brokers.
“So I think a functional market that gives people a legal option that they can trust while there’s not the risk — it’s what people want to do and why should California stand in the way of folks having an opportunity? If they like to bet on games they ought to be able to do it.
“At a time when we are thinking about cutting healthcare and schools and cutting teachers and things that are really valuable to our community, we need to look for every nickel and every dime under every couch cushion and here’s an opportunity to take an activity that is happening in California to the tune of $20 billion, make it legal, make it a better product for Californians, tax it and make as much as $1 billion in revenue. So, it’s a no-brainer.”
The bill would allow wagering on all major sports including Division 1 men’s and women’s athletics.
It still has ways to go, but both Dodd and Gray are confident that if it’s on the ballot in November it will pass.
“We’ve got to get across the finish line in our respective houses,” Dodd said. “But we’ve got that in mind, but we’ve done polling and understand what the issues are for the election. So if we can get it passed through our respective houses, then we believe it will pass with the voters.”