Two things are abundantly clear when it comes to the future of California sports betting.
First and foremost, there is no timeline for when it will be legalized. Secondly, and perhaps more critically, the state’s tribes now have every incentive to urgently push for that to change.
Prediction markets are the catalyst to renewed sense of haste. Since they are for the time being considered derivatives, they are subject to federal regulation rather than state oversight. This allows them to launch in markets that have not legalized sports betting. And that includes California.
Under different circumstances, tribes and state officials may not see the need for urgency. But prediction markets are gaining traction as a substitute for sports betting in the United States. They are so popular, in fact, that DraftKings and FanDuel have rolled out their own prediction-market operations.
Not only that, but DraftKings has already launched its prediction markets in California. FanDuel could technically still follow suit. They are using more of a gradual rollout, but have plans to expand their operations in 2026. It remains to be seen whether this includes The Golden State.
Still, the looming threat of prediction markets isn’t the sole reason why tribes have an extra incentive to push for California sports betting. It’s really more about neutering prediction markets altogether.
Certain Prediction Markets will Close if California Sports Betting Gets Legalized
As soon as FanDuel and DraftKings announced their prediction-market plans, many wondered whether they’d even seek California sports betting licenses in the event of legalization at all. Prediction markets are more loosely regulated, and also taxed differently. It could, in theory, be more lucrative to stick with providing them even if The Golden State revamps current gaming laws.
This could technically still be true. But DraftKings specifically has said it will shudder prediction markets inside states that legalize sports betting.
Though FanDuel has not necessarily said the same, they too are only launching where they don’t have sports gambling licenses. Heck, their decision to delay launch prediction markets in The Golden State speaks volumes. It suggests that they would close their prediction markets, assuming they ever open, if and when sports betting in California becomes legal.
This should absolutely resonate with tribal nations hoping to expand their gaming operations into the sports gambling industry. Initially, they were missing out on revenue from people who bet on sports in other states or use offshore bookies. Now, however, they’re also missing out on revenue from people who can legally use prediction markets inside the state.
Indeed, some may feel as if there’s no rush. After all, if FanDuel and DraftKings shudder their prediction markets to make way for sports betting, much of their business in that sector should carry over. But the thing is, FanDuel and DraftKings are far from the only prediction-market providers. If California sits out sports betting legalization long enough, the market share could be monopolized by prediction-market users who are less likely to change their transactional behavior down the line.
Tribes Have to Take the Lead on Sports Betting Talks in the Golden State
Despite a clear incentive to elevate California sports betting on the legislative agenda, there isn’t much news on that front to open 2026. Reasons abound for why. Chief among them, though, is that tribal nations clearly have to take the lead.
History tells us the tribes prefer it this way. They have long sought to preserve gaming exclusivity as part of sports betting legalization. That has not changed. DraftKings and FanDuel would not be entering the prediction-market game if it had.
In the past, though, corporate operators seemed inclined to initiate the dialogue. That does not appear to be the case anymore. As FanDuel VP of Strategic Partnerships Frank Sizemore said, per Amy Palistri of Covers: “If and when the crowd decides to legalize sports wagering, it’ll be a tribally led initiative. We have no interest in running another initiative. We’ve learned our lesson and it did not go well.”
You needn’t read between the lines here. Sizemore is spelling it out directly: Any push for California sports betting legalization must be spearheaded by tribal nations.
Why Isn’t There More Chatter About California Sports Betting?
This is a great question. And frankly, it is one without a clear answer.
Some chalk up the relative dearth of California sports betting negotiations to the state’s legislature schedule. Major meetings happen in odd-numbered years. Another one won’t convene until 2027.
Even so, this doesn’t explain why there has been no major effort to legalize California sports betting since two separate ballot measures failed back in 2022.
Sure, in that first year or two, it makes sense. Everyone went back to the drawing board. Running these campaigns is also expensive. Multiple outlets have reported that the dueling California sports betting campaigns from 2022 were the most expensive ballot measures in the state’s history. From that perspective, you can understand why neither side rushed to propose another piece of legislation.
And yet, we are now more than three years removed from that epic failure. During that time, despite the absence of authentic legislation, we have consumed plenty of reports stating that the relationship between tribes and sportsbooks is in better standing than ever. Actual dialogue appeared to be happening.
So much for that.
Given DraftKings’ launch of prediction markets in California, we can’t help but wonder whether relations between them and tribal nations have broken down…again. Zoom out, and it sure seems like they have. Otherwise, why risk alienating tribal nations by providing a California sports betting alternative such as prediction markets?
All of which suggests, if not outright proves, that legal sports gambling in The Golden State remains a ways off. How far out, we can’t be certain. But we do know the burden of captaining change now falls exclusively on tribal nations.
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