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California Sports Betting:
A Game of Inches
In the wake of a failed attempt to legalize sports betting, work quietly continues on a proposal that favors the state’s 62 gaming tribes By Marjorie Preston
W
hen it comes to gaming in California, not much happens without the consent of the state’s powerful gaming tribes— and that includes sports betting. Last year, state Senator Bill Dodd and Assemblyman Adam Gray pushed identical sports betting bills they said would capture millions of dollars “currently bolstering the profits of illegal, out-of-state sports wagering operators.” But the tribes balked, because the measure cut in the state’s commercial card rooms. The two sides have long warred over banked card games and other forms of betting that the tribes feel are exclusively theirs. And opposition from gaming tribes—who generate a total economic impact approaching $20 billion a year, and contribute billions in taxes—was enough to push the issue onto the back burner. Without sports betting, everyone is leaving money on the table. But the tribes won’t be rushed into a deal—and they won’t say much about efforts behind the scenes, either. “Tribes are being tight-lipped” about the subject, said a source who spoke to GGB on condition of anonymity. “But they have a lot of incentive to get it done, and done right the first time. They hold the key to the kingdom.” The demise of the Dodd-Gray legislation acknowledged “the power the tribes have gained over the last 20 years,” Reno-based consultant Ken Adams told the Sacramento Bee last year. “Anybody who wants to get a bill through the legislature is going to have to face that.”
High Stakes Since 2018, when the U.S. Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA), the legal sports betting industry has grown from a single state to 25, with 21 markets up and running and legisla30
Global Gaming Business MAY 2021
tion pending in more than a dozen more. D.C. is also in the game. That rapid-fire growth is driven in part by Covid-19, which has caused even holdout states (Hawaii, Texas, Florida) to reconsider sports betting as a budget stopgap. With a $54 billion budget deficit—the worst in its history—California is equally motivated. And though sports betting is a low-margin industry, the Golden State, with a nation-leading population of almost 40 million, could be the biggest untapped market of all. The left coast has 16 teams in North America’s Big 4 leagues: Major League Baseball (the L.A. Dodgers, Oakland A’s, San Diego Padres, San Francisco Giants and L.A. Angels); the NFL (L.A. Rams, L.A. Chargers and San Francisco 49ers); the NBA (the L.A Lakers, L.A. Clippers, Golden State Warriors and Sacramento Kings); the NHL (Anaheim Ducks, L.A. Kings, San Jose Sharks); and Major League Soccer (L.A. Galaxy, L.A. FC and San Jose Earthquakes). The Dodd-Gray plan would also allow wagers on professional and college sports; the tribal version would ban betting on college games played by teams from California. According to estimates from Eilers & Krejcik Gaming, sports betting in this sports-crazy state could pull in $502 million in state taxes per year at maturity. Of course, the cardrooms flex some muscle of their own. The website PlayCA.com notes that the Commerce Casino in Los Angeles County contributes 70 percent of that county’s total tax revenues. Cheryl Schmit, director of the gaming watchdog group Stand Up California, speaks in defense of the card rooms, calling the tribes’ plan “self-serving.” “I supported the Dodd bill, which would benefit the entire state and everyone who participated would be taxed, which is different from the
