Last Updated on May 8, 2020

California Sports Betting

Since the day legal sports betting laws changed in the US in mid 2018, everyone has wondered one thing….. When will I be able to legally bet?

Nearly two dozen states have legalized and regulated sports betting, including many “top states” like New Jersey, Pennsylvania. What about sports betting in California, New York, and Florida with their massive population size?

For Californian’s, that question is still prevalent in sports bettors minds, but it may not be for much longer. The state took its first step towards legal sports betting in early 2020.


Sports Betting Hearing with California Assembly

On January 8th, 2020 the state Senate and California Assembly met with one purpose. The entire meeting was based around gathering and sharing information on legal sports betting, talking to representatives from professional sports leagues, and discussing integrity with the proper people.

From everything we know and have read, it’s simple. Everyone in this hearing believes that sports betting is already happening in the state. Whether it is from a bookie on the corner or at a local bar, whether at an offshore sportsbook via the internet or traveling to Nevada or Oregon to place bets, t’s happening.

Given these black market opportunities for bettors, California is getting nothing in terms of taxes, job creation, or anything legally productive. A legislated way to avoid all of this would be beneficial to Californians, the leagues and government alike. That is agreed upon. How to fix it is a different story.

Jake Williams of Sportsradar, a sports data company said it best: “A regulated market is the surest way to ensure the highest integrity standards”.

Even the Oregon Lottery chimed in, as Matt Shelby says: “If something is amiss you see weird betting patterns. Because we are a legally regulated market there is transparency there.”

Everyone agrees, it needs to happen. That is one part of good news for California bettors from this hearing.


Potential Sports Betting Revenue

Another part of the meeting touched on the underlying purpose of it all. Money.

Chris Grove, who is an industry analyst in the gaming space, and his company estimate that legal sports betting could be a industry that brings in nearly $6B in the next three years.

A big part of that number is California, for obvious reasons. Not only is California the most populated state in the US, but it is also home to 16 professional sports teams in the “Big Four”, and countless others. Five MLB teams, four NBA teams and NFL teams each, and also three NHL teams exist in California. Why is that important? Fans love to bet on their own teams.

Grove mentions that the key in California with the already high cost of living in many areas is to keep the tax rates reasonable, or under 20%. By comparison, Pennsylvania has an enormous rate of 36%, and Nevada’s is under 7%.

Another way the state would make money is licensing fees. Other states have shown licensing fees, including $10M fee in Pennsylvania, just to enter the market. All of this creates tax revenue for the state, and California has a tremendous deficit.

When viewing the image below from Alfonso Straffon, we see the mega-potential of sports betting California simply based on population and lack of cross-state competition that is common on the east coast.

CA Sports Betting Potential


Sports Betting Timeline

What is next for the Golden State?

This was just a hearing, so action is needed. Whether it is legislated in the state Senate or not, voters in California will be the reason sports betting comes to the state.

Like many other states, voters will need to vote on any amendment to the state constitution that would allow for legal sports betting.

Currently, there are laws that prevent such and even go to the extent of prohibiting casinos that are based on how Nevada and New Jersey construct and run operations, per California law.

That would be just one hurdle, as California would need to battle with tribal casinos who have pushed to keep betting in-house, and more.

One step at a time is necessary in California, but the good news is they are finally talking about it.



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