California Remains Split on Whether to Legalize Sports Betting in 2022

California Remains Split on Whether to Legalize Sports Betting in 2022

Entering 2022, over 30 states in the U.S. have made the decision to legalize sports betting in some form. Others, meanwhile, have proposed or even approved legislation that would do the same in the next year or so. And yet, to the surprise of many, California has isn't a member of either group. They haven't legalized any form of sports betting and won't rehash the issue again until their November 2022 ballot. What, pray to tell, does this mean for the future of sports betting in the state? We're here to have a look.

At a time when legal online sports betting is commonplace in the United States, California continues to be among the biggest, if not the absolute biggest, outlier on the subject. Though they are slated to vote on whether to legalize online sports betting in California this coming November, the size and scope of their market suggests they should have already given the green light.

No other state has a larger collection of professional sports teams. California also counts itself as one of the most densely populated regions of sports fans, period. Many believe that legal sports betting will be not only an instant success in California, but the most profitable operation within the industry the United States has ever seen.

In a vacuum, this makes the call a no-brainer. For a multitude of reasons, however, California remains split on whether to legalize sports betting in 2022. Let's get into why—and whether their bi-partisan views on the matter will ever align.

Why Hasn't California Legalized Sports Betting Yet?

The answer is succinct, but also complex. More than anything, a lack of alignment has prevented sports betting from getting any sustainable traction in California.

Competing proposals are bumping up against one another, with all of them catering to different agendas. There are, of course, the larger gaming operators who want unfettered legalization that gives people in California the ability to place bets in-person, online, via mobile apps and even on-site at pro sporting events. Then there are the tribal casinos, who are pushing for exclusive rights to legal sports betting at least to start. And then there are the handful of legal card rooms up and down the state that want to ensure they have the capacity to take bets.

So many differing views and intentions has created a wide and inconsistent pool of lobbying. Every side involved—large companies, tribal casinos, card-room operators, etc.—is spending obscene amounts of money to try pushing their interests up the local government ladder. When all is said and done, the November 2022 sports-betting vote could be the most expensive campaign run in the history of California—and one of the priciest in the United States, period.

Prospective voters, for their part, have no shortage of options to consider. Right now, there are four separate proposals on the ledger, three of which have gained serious momentum. Two of the most popular bills would allow online sports betting while the other would limit sports betting to in-person at tribal casinos and four of California's horse-racing tracks.

Adding to the complexity of the situation: Only the measure that would restrict sports betting to tribal casinos and horse-racing tracks is officially approved to appear on the ballot. At least one more is expected to make it through, but it isn't clear which—or when that decision will be made.

California is Leaving Money on the Table

Meanwhile, as California's views on sports betting continue to want for anything resembling a consensus, the fact of the matter is they're leaving a boatload of money on the table.

As potentially the biggest sports-betting market in the country, most expect their monthly betting totals to be in the billions—with a B—on a month-by-month basis. That amounts to nine-figures in pure profit for prospective sportsbooks (after accounting for how much money they pay out to winners). And assuming a tax rate between 45 and 52 percent, that means California is missing out on tens of millions of dollars in revenue every single month it doesn't have legal sports betting.

With every state economy still reeling from the coronavirus pandemic, this would suggest more urgency on California's part. Surely they'll legalize sports betting in November. But that's not really the point.

California's sports-betting situation isn't so much a matter of if. It isn't even really a matter of when. It's a matter of how. If specific restrictions are placed on how they offer sports betting, they will see it reflected in their revenue. If they are more open-ended about their eventual rollout, that's when they stand to make the most money.

How will Legal Sports Betting Unfold in California?

We don't really know the answer to this question. But after seeing New York generate over $1.5 billion in total sports bets during their first full month with legal gambling, we're inclined to think California will inevitably favor a rollout that allows online gaming operators beyond tribal casinos and horse-racing tracks into the fold.

This makes even more sense when you consider how hard it is to actually restrict online betting. Residents of California can still drive out of state, to one of the many neighboring regions with legal sports betting. There will even be certain sites from our reviews of the top online sportsbooks that allow access to residents in California.

To be absolutely blunt, there is no suppressing online sports wagers in California. Not in this day and age. So even if they give priority to tribal casinos in the November vote, that model won't last forever. The future of gaming is built around the online betting infrastructure, and it's only a matter of time before California, along with many of the other holdouts, accept as much and react accordingly. 

Take a look at this list of the top online sportsbooks so you can find one that will work for all of your sports betting needs: