The future of Sports Gambling may be on California’s Ballot
On election day, California voters were be tasked with deciding on Proposition 26, which would allow in-person sports gambling on tribal lands, and Proposition 27, a bill that would enable mobile sports gaming everywhere in the state.
The tribes argue Prop 26 is a more reliable solution for sports gambling because in-person wagering helps solidify the verification process and ensure minors aren’t gambling online. On the other hand, Prop 27 explicitly allows for mobile sports gambling operations anywhere in the state. This would open the state up for any operators and severely impact the tribe’s current monopoly on traditional casino revenues.
Since the Supreme Court overturned the federal ban on sports gambling in 2018. 35 states and Washington D.C. have legalized sports betting, most notably Arizona, New York, and New Jersey. For the second year in a row, New Jersey is the top sports betting market, with $815 million in revenue. All states that have legalized sports betting have seen an enormous profit in revenue and a spike in job opportunities. According to the American Gaming Association, the United States casinos and mobile gaming apps generated a record $53 billion in revenue in 2021. As more states legalize sports betting, so are the actual leagues. Mobile sports betting platforms such as DraftKings, BetMGM, and Fan Duel have become professional leagues’ official sports betting apps, such as the National Football League (NFL) and the National Basketball Association (NBA). These platforms have also begun to acquire naming rights to sports and entertainment arenas, such as “Caesar’s Superdome” in New Orleans.
With the steady growth of the sports gambling industry throughout the country, California was forced to put sports betting legalization on the ballot. FanDuel and DraftKings have highlighted how their taxable profits would be used to fight the California homeless crisis if the state’s Proposition 27 was approved. How, exactly? However, despite the potential economic impact that the industry can have on California, early voting results suggested that Prop 27 would be voted “No,” heading toward Election Day on Nov. 8. For example, New York legalized online sports betting in January. A record $5.28 billion was bet in the first three months of business, generating $167.392 million in state taxes. With California having the country’s largest population, these numbers could double.
Prop 26 and 27 were voted down on Election Day. Now, it will be interesting to see how the future of the sports gambling industry fares without the economic backing of the country’s biggest state. It will also be interesting to see how the future of California’s economy fares since it decided to pass on the 10% tax rate it would have gained if the legislation was legalized. More than 50 tribes and organizations across the state didn’t support the legislation, and as Election Day passed, the bill is expected to be back on the ballot in 2024 to be approved. In today’s climate, California could use the economic boost to aid with homelessness, gas prices, and housing prices as the economy still fights inflation and other financial barriers post-covid.
