There's a Growing Belief Online California Sports Betting will 'Flop Again'

Dan Favale
By , Updated on: May 3, 2023 12:00 AM
Things aren't looking to good for online California sports betting.

Doubt surrounding the immediate future of online sports betting in California continues to spread throughout the state at an alarmingly quick rate.

Imagine telling yourself this roughly one year ago. At the time, online California sports betting felt fait accompli. Proposition 27, which sought to legalize online gambling, was set to make the 2022 general election ballot and expected to pass with a fairly large approval rating.

As we now know, the vote for California sports betting didn't unfold according to plan. Not only did the online gambling initiative fail, but residents turned away a tribal-back proposal that would have legalized in-person wagering at licensed casinos. Ever since then, the future of sports betting in The Golden State has gone from a formal lock to a gargantuan question mark.

Prevailing consensus does still favor in-person gambling. The state government threw their support behind Proposition 26 and the idea that sports betting should be limited to tribal properties. While no new initiatives have emerged from the 2023 legislative sessions, this seemingly has more to do with online operators. They need to find a middle ground with the state's tribes in hopes of creating a uniform bill that's more likely to resonate with voters. Most don't think they'll contemplate proposing their own separate initiative (once again) until the last possible second.

Then again, many don't believe corporate odds providers will continue chasing California online sports betting at allVarious tribal leaders have actually suggested mobile operators could sit out the sports betting debate until 2026 or beyond. Of course, these sentiments may always prove accurate. But even if they do, more recent comments show that California tribes don't feel the least bit pressured or obligated to break bread with corporate online sportsbooks anytime soon.

Online California Sports Betting Seems Like It'll Need a Miracle to Appear on the 2024 General Election Ballot

Online operators have two courses of action from which they can choose: Either they team up with California tribes to introduce one sports betting bill, or they cobble together their own proposal like they did last time around. Multiple reports have suggested that many of the top online sportsbooks prefer the former. And they're probably smart to think that way.

Putting one proposal in front of voters makes it easier for them to understand and embrace it. As we have noted here many times before, the dueling measures from 2022 incited confusion amid all the counter-advertising. A joint bill wouldn't have to worry about navigating those obstacles. However, a singular proposal requires cooperation from both the tribes and online operators. That's not in the cards right now.

Indeed, online operators seem more than willing to negotiate with tribes. Really, they have no choice. California tribes currently have exclusivity over all legal gaming rights in the state. Sports betting, in any form, cannot be approved without their consent as things currently stand. And that's exactly why California's tribes have resisted giving in to online operators. They are willing to let these companies help them set up their own mobile betting operations, but they don't want them having independent access to the California sports betting market. 

Failing a significant change in tribal viewpoint, online operators will need to get their own separate sports betting measure passed to have a puncher's chance of making the next general election ballot. And while California tribes view corporate online sports betting as an existential threat to their business model, they don't actually view initiatives proposed by online operators as their own threat.

“Nothing’s going to happen in 2024 on their end," Penchenga Chairman Mark Macarro recently told PlayUSA about online sportsbooks pushing their own agendas. "These guys can retool everything and bring it in front of the voters, but it’s going to flop again." These are powerful and definitive words that paint little to no hope for online operators. But are they also accurate?

2022 Election Results Don't Bode Well for Online Sports Betting in California

Many will be inclined to take Chairman Maccaro's sentiments with a metric ton of salt. We don't blame them. He has a clear vested interest in tribal operations winning out over online sportsbooks. Nobody in his position would convey anything other than the utmost confidence.

That doesn't necessarily make him wrong. In fact, he's most likely right.

Last year's voting results suggest online sports betting is no longer a priority for Californians. And that's assuming it ever was a primary desire among voters. It isn't just that the measure failed; it's the margin by which it imploded. Fewer than 18 percent of Californians voted in favor of the 2022 online sports betting bill. That's beyond discouraging. Overturning initial sentiments isn't impossible, but we're not talking about a narrow loss. This was a thorough butt-kicking.

A lot needs to change for online sports betting to have a reasonable chance with California voters in 2024. That may be why online operators ultimately decide to wait for a 2026 push. It gives Californians more time to warm up to the idea. It also gives other glamor markets such as Texas and Florida time to join the fold. The legalization of online sports betting in either state would put pressure on California to do the same.

Then again, while this many be the party answer, it's probably not the truth. If online operators sit out the 2024 sports betting push, it's most likely because they have no shot of partnering up with, let alone outright beating, California's tribes—and they know it.

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Meet the author

Dan Favale

Dan first began writing about sports back in 2011. At the time, his expertise lied in the NBA and NFL. More than one decade, that remains the case. But he's also expanded his catalog to include extensive knowledge and analysis on the NHL, MLB, tennis, NASCAR, college ba...

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