Billions of Dollars At Stake In California Sports Betting Dispute
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A battle to control legal sports betting in California, by far the nation’s most-populous state, has sparked an expensive tug of war heading in the fall elections.
On one side are online bookmakers such as DraftKings and FanDuel. On the other are tribal casinos that want sports betting to take place only inside their resorts and at horse tracks.
Right now, sports betting is illegal in California, but the state, with a population of more than 39 million, is seen as a sports wagering gold mine.
At stake is control of billions in revenue — as much as $50 billion annually, according to the Wall Street Journal.
California voters will decide on Nov. 8 what type of sports betting they want, if any at all.
Competing Sports Betting Options
On Tuesday, a coalition of popular online bookmakers, including DraftKings, FanDuel and BetMGM, announced it has submitted over 1.6 million signatures to put a question on the November ballot to legalize mobile sports betting statewide.
The signatures still need to be verified but are about 600,000 more than required.
A separate measure already has qualified to be on the fall ballot. This one would legalize sports betting only inside tribal casinos and at horse tracks. About 60 tribal casinos are in operation statewide.
The tribal proposal could pave the way for brick-and-mortar sportsbooks at California’s professional sports venues, according to USA Today.
Professional sports teams are located in every major city in the state, from San Diego and Los Angeles in Southern California to the Bay Area and Sacramento in the north.
Legal Challenge On The Horizon
In California, ballot initiatives need more than 50% of the public vote to be approved.
If more than one sports betting initiative wins voter approval, it is unclear whether only one would become law.
Sacramento attorney Thomas Hiltachk told the Wall Street Journal lawsuits are likely to be filed to determine which proposal would be implemented. Hiltachk represents a coalition of licensed card rooms opposed to the tribes’ onsite-only sports betting measure.
After Election Day, legal entanglements could delay the start of sports betting in California.
One example of a lengthy legal delay over sports betting is taking place in Florida.
Last fall, the Seminole Tribe of Florida launched a statewide mobile sports betting app, but it was discontinued in a legal dispute and still has not be reactivated.
‘Jaw-Dropping Amount of Money’
Sacramento-based political consultant Jason Kinney summed up what’s at play in California heading into the fall.
“You have at least two well-funded measures, a growing number of well-staffed campaigns and a jaw-dropping amount of money at stake,” he told the Wall Street Journal.
The newspaper noted that DraftKings and others backing the online proposal have put $100 million into a campaign account and already are airing ads.
A group called Californians for Solutions to Homelessness and Mental Health Support is out front in supporting the online proposal, which could generate $500 million to combat homelessness in California.
The other side is not idle.
Cody Martinez, tribal chairman of the Sycuan Band of the Kumeyaay Nation, said online betting would turn “every cellphone, laptop, tablet and gaming console into a gambling device, increasing the risks of underage and problem gambling.”
“We will run a vigorous campaign against this measure and are confident the voters will see through the deceptive promises being made by these out-of-state gambling corporations,” he said.
The tribes expect to spend $100 million to $250 million on the campaign to defeat the mobile sports betting proposal.
California Expected To Outpace New York
New York is viewed as a good benchmark for what could happen financially if sports betting is legalized in California.
With 20 million fewer residents than California, the Empire State is the largest legal mobile sports betting jurisdiction nationally.
Since mobile sports betting began in New York on Jan. 8, bettors have wagered about $6 billion on sporting events.
That dollar amount, in a state with a much smaller population than California, has online bookmakers and tribal casinos eyeing a potential fortune on the West Coast.
It also has them battling to win public support in California on Nov. 8.
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