The wait for legal sports betting in California could last...more than a half-decade.
That is not a typo. When both legal California sports betting measures failed to pass in November, it was seen as a setback of potentially epic proportions. Sure, the state could travel back to square one, cobble together a more uniform bill and hope it gets the voters' stamp of approval in 2024. But there's no guarantee that's what happens next.
In fact, at least one person close to the situation believes it won't be.
Indian Gaming Association Conference Chairman Says Legal California Sports Betting Could Take Longer Than You Think
Victor Rocha is the Indian Gaming Association Conference Chairman. That makes him uniquely qualified to speak on legal sports betting in California, since the issue boils down to relations between corporate sportsbooks and tribal operations. As of now, the picture he paints is fairly bleak.
“When will California have sports betting?" Rocha said, according to Legal Sports Report."My gut instinct says 4-6 years. The tribes are in no hurry. They can play defense forever."
Some won't be willing to take Rocha at his word. After all, he represents one side of the argument and the tribes' best interests. But that's the entire point.
California's tribes have the upper hand on matters of legal sports betting. They hold exclusive gaming rights under current gambling laws, so their approval is mission critical to any constitutional amendments. To date, they have shown little interest in allowing the top reviewed online sportsbooks to obtain independent licenses as part of the legalization process.
Unless California tribes or corporate sportsbooks are willing to compromise, the discussion will retain its dichotomy. Tribes will pursue legislation that limits gaming to their on-site and digital properties and restricts involvement from outside companies. Corporate sportsbooks, meanwhile, will keep pushing proposals that give them standalone licenses and entry into the United States' most lucrative betting market.
Why are Tribes and Corporate Sportsbooks at Odds Over Legal California Sports Betting?
While the California sports betting debate features many layers, it boils mostly down to one singular issue: the capacity with which online sportsbooks such as DraftKings, FanDuel, Caesars, BetMGM, etc. can operate inside the state.
Betting companies want independent licenses. This would allow them to offer online sports betting to Californians. But the state's tribes are insisting on a more limited presence. Though they are willing to let corporate linemakers enter the market, California tribes don't want corporations to have independent licenses. As Rocha previously noted, they don't even want these sportsbooks to be considered partners. Instead, California tribes want the non-tribal companies to be treated as "tech providers." This means they would help the tribes offer online betting options to Californians for a fee or cut of the profits. It would not allow them to advertise and operate their own sportsbooks.
This has so far been a non-starter for the United States' premier online betting sites. They might be willing to pay a higher tax rate or partner up to help tribes run their own betting apps, but they don't yet seem open to becoming silent and minority stakeholders.
For their part, the tribes don't sound willing to budge, either. They have argued that allowing corporations to enter the California legal sports betting scene would threaten their business. Not only will they have trouble competing for online betting clients with more established entities touting larger budgets, but their foot traffic inside casinos and eventual brick-and-mortar sportsbooks would submarine.
Lawmakers in California have thus far sided with the tribes. And no matter where you land on this debate, you can't deny the tribes have a point. Between 80 and 90 percent of all legal sports bets placed in the United States this year are expected to be processed online. Giving Californians access to what is already the most popular form of gambling will definitely knife into on-site business. It's unavoidable.
What Happens if California Tribes and Corporate Sportsbooks Don't Find a Middle Ground
The answer to this question was already provided by Rocha. If the two sides don't reach a mutual compromise, it will be years before sports betting in California becomes a reality.
Consider the prospective timeline. Any legalization of online sports betting will require a California constitutional amendment. That means a bill must pass through the House of Representatives and Senate and make it on to a general election ballot. The next general election in California isn't until 2024. Assuming a sports betting measure passes, it could still take up to a year to implement. That brings us to 2025—at the absolute earliest.
Mind you, there's no guarantee a sports betting bill even makes it onto the next ballot. The House and Senate are likely to prefer a uniform bill rather than separate proposals. California put two initiatives on the 2022 general election ballot, and it ended up being a bloodbath. Both the state's tribes and the corporate sportsbooks spent hundreds of millions campaigning against the other side, and voters grew fatigued by the onslaught of conflicting messages. The end result: Both California sports betting measures failed in 2022.
Permitting two gambling initiatives to make the 2024 ballot will invite the same outcome. It inherently creates division and toxic counter-advertising. Like most other states, California will have an easier time generating voter approval with one sports betting initiative.
And therein lies the ultimate roadblock: a singular California sports betting initiative currently seems out of the question. It is on the tribes and/or the corporate sportsbooks to change that.
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