The state of California is making progress toward legal and regulated sports betting.
The California Senate Committee on Government Organization has approved a constitutional amendment bill that would legalise sports wagering in the state of California.
The Committee approved the bill with a vote of 9-3, with all Democrats on the committee voting for the bill while all Republicans voted against it.
The bill, SCA 6, will now be sent to the Senate Committee on Appropriations, where a hearing will be held on 9 June.
The bill, along with a companion proposal, ACA 16, has been filed in the Assembly by Assemblyman Adam Gray, outline plans for allow for a statewide referendum for sports betting. Two-thirds of voters would need to approve the measure for sports betting to become legal in the state.
What’s covered in the bill?
If successful, the measure will only allow tribal casinos and racetracks to offer legal and regulated sports wagering in California. The state’s card room will be blocked from offering sports betting.
Those that wish to offer sports betting will be able to offer online sports betting which will be subject to a 15% gross revenue tax. Operators hoping to offer land-based betting will be taxed 10%.
Online sports betting operators will only be able to offer one skin and will be expected to pay an initial $5m license fee along with an annual renewal fee of $1m.
If successful, a question of sports betting will be added to the November 2020 ballot alongside the presidential and congressional elections.
Although card rooms will not be able to offer sports betting, the bill includes a measure that would amend the state constitution to recognise the authority of card rooms’ rights to offer player-dealer games. This would effectively allow a player employed by the venue to collect losses, pay out winning and rake.
This measure has proven to be unpopular with tribal casino operators, however, the California Nations Indian Gaming Association (CNIGA) argued that the provision will allow for the “massive expansion of games” offered by cardrooms. CNIGA also said that this will “fundamentally changes the legal structure of California’s peer-to-peer gaming industry.”
The cardrooms appear as if they are willing to compromise by giving up sports betting in return for ending the tribal challenges to how they offer table games.
Tribes oppose the bill
Several tribes have come out against the bill. Jeff Grubbe, the chairman of Agua Caliente, questioned why the legality of cardroom games has been included in sports betting legislation.
During the Committee’s hearing, Grubbe said: “Why does a sports wagering bill contain the gift of banked games to a cardroom industry whose entire business model is built around circumventing California law for its own benefit and the direct expense of tribal governments?”
Grubbe also voiced the view that the state revenue estimates for sports wagering in California are severely overestimated. Grubbe said: “The tax revenue generated from these measures will have no meaningful impact on the massive budget deficit.”
Tribal groups are also opposed to online sports betting and would prefer to offer land-based sports betting only.
Grubbe argued that online sports betting presents several challenges, especially when it comes to identifying underage players and assisting problem gamblers. He also stated that the opposition of online betting was in order to protect the investment tribes have made in their land-based venues.
Grubbe said: “It appears that our out-of-state sports leagues and our out-of-state sports wagering platforms will be the big winners if SCA 6 becomes law.”
