When California residents vote on the legalization of sports betting during the 2022 November elections, they will not just be rendering a verdict on the fate of online gambling within the state, but the financial impact that comes alongside it. And for California specifically, that financial impact could be worth billions—yes, billions—of dollars.
Just about everyone knows by now that legal sports in the USA is a lucrative form of revenue for the states that have okayed it. For some markets, though, the potential is much greater than in others. Where many states are dealing with revenue in the millions and tens of millions each year, some actually fall into the billions-of-dollars range. And recent projections suggest The Golden State is among those that could turn a billion-dollar profit. That's right: Legal California sports betting could generate an additional $3 billion in state revenue.
You're not alone if you're taken aback by that number. It is monstrous. For the time being, it's also meaningless.
There needs to be sports betting in California before they can realize the financial gains. Right now, there isn't. And it still isn't entirely clear which way the state will lean when voting takes place this fall.
Why Legal Sports Betting in California is Worth So Much
Experts are in almost universal agreement that California could accept more than $3 billion in total sports bets during the first year they have it up and running. That is...quite a bit of money. But is it accurate?
Technically, it's impossible to know. Nothing is guaranteed when states legalize sports betting. They need to actually go through the process and see where the overarching interest lies before generating concrete. Still, California can look to other states for clues on how it will fare.
To this point, New York has been viewed as the most valuable comparison. They broke the record for the amount of money in sports bets accepted during their first quarter of operations in 2022. And California's numbers should be even gaudier. After all, New York has a population of roughly 19 million. California has a population of nearly 40 million.
There's also the matter of the state's sports teams. California is the largest sports market in the United States. From the Los Angeles Rams and San Francisco 49ers in the NFL, to the Los Angeles Lakers and Golden State Warriors in the NBA, to the Los Angeles Kings and San Jose Sharks in the NHL, to the Los Angeles Dodgers and Oakland Athletics in Major League Baseball, there are numerous sports teams within the state for every professional league. Heck, we barely even scratched the surface in our list of franchises. California averages around five or so sport teams per professional league. That is absurd.
It also says nothing of collegiate sports. Powerhouse programs like UCLA, USC, UNLV, Stanford and others will help drive up the bottom line on sports-betting revenue if the state doesn't impose certain limitations on collegiate events. (Related: They probably won't. States that have recently legalized sports betting typically allow residents to wager on college sports.)
California Sports Betting Revenue Could Actually Be Higher Than Expected
The title of this subsection is not a typo. A $3 billion revenue stream through the first year could actually be on the low end.
See, in California's case, they are most likely underestimating the amount of bets that fall outside their purview currently being placed. Not only are they within a stone's throw of Las Vegas, where anything currently goes, but their proximity to states with legal sports betting enable some residents to register with online bookies. Most sports betting sites and betting apps use geo-tracking data to determine whether they can accept a registered user's bet. But the data can be inexact if you're close enough to state lines beyond California.
So theoretically, if you live in California, you can go through our reviews of the top online sportsbooks, choose one of the many highly rated sites and actually be "allowed' to create an account and submit your wagers. It won't work every time, but it absolutely happens on occasion.
Fringe cases like the aforementioned ones likely aren't baked into California legal sports betting projections. And though it's impossible to tell just how much money people crossing state lines and circumventing geo-tracking data are spending, there's a real chance California's first-year revenue could be closer to $3.5 or even $4 billion.
Is California Sports Betting Revenue About to Become a Reality?
It turns out we may not have to wait that long to see how much California can rake in from sports betting. One of the two proposed sports betting bills slated to appear on this fall's ballot is expected to pass. Most even assume it will be the one that calls for sports betting in all forms rather than just at or through casinos.
And if the measure does indeed go through, the prevailing belief is legal California sports betting will be in place by the 2022 NFL season. That puts the rollout at around September, if not by August. And that, by extension, means we'll know how much money California is on pace to make through legal sports betting by this time next year.
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