Another legislative season has passed and while Missouri ballot goers did vote to introduce new sports betting apps, no new online gambling legislation was passed during the session. Although many expected to see progress in the Golden State, opposition from native tribes saw proposals fail.
The issue is likely to come up again and proponents of online gambling regulation will now have two years to negotiate with tribal casino owners and lawmakers, but there is no guarantee of success, as this year’s session proved.
Online Gambling In California
Online gambling in California is not regulated, which means there are no iGaming sites licensed in the state. However, players can play at tribal casinos, and many players use offshore casinos.
The best online casinos in California are licensed in regions like Malta and the UK. They offer extensive selections of games and, according to sports betting and casino writer Jonathan Askew, sites that accept cryptocurrencies provide anonymous, private betting too.
Offline, casino gambling is permitted in tribal casinos, and the only legal form of sports betting is parimutuel horse racing betting. As the country’s most populous state, California is potentially missing out on a lot of tax revenue, which would be generated by regulating other forms of betting.
Nearly 40 states have now legalized sports betting, although fewer than 10 offer regulated online casinos. Proponents of regulation point to the hundreds of millions of dollars of missed tax revenue as a viable reason to expand gambling laws.
Plans Shelved
In light of the missed revenue, lawmakers and proponents have put forward plans to regulate iGaming. A group called Eagle1 Acquisitions Corp tabled proposals to legalize sports betting but the California Nations Indian Gaming Association (CNIGA) rejected the plans, describing the proposal as “a cynical attempt to legalize sports wagering and online betting in California”.
Considering the proposal would have given the tribes exclusive rights to offer sports wagering, it is safe to assume that it would have also required that they partner with existing online betting portals. For now, the idea is dead in the water, and the group will have to come up with proposals that more closely align with the needs of CNIGA.
Proponents
Proponents of online gambling in California regularly point to the missed tax revenue opportunities. New Jersey, which has one of the most established online gambling regulatory frameworks in the US, brings in around $50 million a month, or more than half a billion a year in tax.
Approximately a third of this comes from physical land-based casinos but more than half comes from iGaming and nearly 10% from sports betting. Considering California’s population is four times that of New Jersey, the state could expect to make up to a billion a year in tax by legalizing sports betting and online casinos.
Opponents
Currently, the only casinos allowed to operate in California are tribal casinos, which must be located on tribal land. Any sports betting or online gaming regulation would have to involve the tribes, and would likely incorporate existing tribal casinos.
There are concerns that opening up the gambling industry to include online gaming would cannibalize physical casino revenues and negatively impact tribal income. For proposals to get through, they would need to compensate the tribes and offer generous returns.
California Gambling History
In 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992, which effectively enabled states to decide their own gambling and iGaming laws. Since then, all but around a dozen states have legalized sports betting, although only seven states have currently regulated online casinos.
California is the largest tribal casino state with 87 tribal casinos. The industry supports a reported 184,701 jobs and generates $8.76 billion in taxes in its current state, so it is obvious why the tribes do not want to change the current status quo.
Currently, tribes do not pay tax on the land they inhabit, including on the revenues raised on those lands. They do pay fees towards certain initiatives and other funds, but this likely falls some way short of the taxes they would be charged if iGaming and sports betting were to become fully regulated.
California’s tribes have a lot of sway when it comes to gambling regulation, and this is part of the reason the state has yet to regulate online gambling like many other states have.
Online Gambling Legislation In The Rest Of The Country
There was very little progress in online gambling regulation during the last legislative session. No new acts or legislation was passed, and the only real movement was seen in Missouri, where voters opted to introduce sports betting in the state. The vote was close. More than 10 million votes were cast, and the measure was only passed by fewer than 10,000 votes but it means sports betting will be legalized across the state.
Professional sports teams in the state will also be allowed to establish a retail sports betting shop near their stadiums and will be allowed to partner with an existing online betting site. Similarly, the state’s 6 physical casinos will also be allowed to offer sports betting in their casinos and offer online sports betting platforms.
Furthermore, two additional online sports betting licenses will be granted to separate groups that are not partnered with a sports team or casino.
Elsewhere in the country, Georgia once again failed to get anything through the legislature, marking the fourth successive failure. North Carolina did launch sports betting in March this year, but there will not be any more regulation changes now until at least the end of 2025.
Will California Be Next?
While California is struggling to get tribal casinos on board and has seen its attempts at regulation falter as a result, there is time now for groups to lobby and negotiate proposals. They will be one of the next states to legalize sports betting, as they are only one of a dozen that don’t have it yet, and this could pave the way to regulated iGaming.
