More than two dozen states have already legalized sports betting following a 2018 Supreme Court ruling that struck down a federal ban, and now California gaming interests are stepping into the arena for a heavyweight fight.
Native American tribes have qualified an initiative for the November 2022 ballot that would legalize on-site sports betting at tribal casinos and horse-racing tracks. However, other types of licensed gambling businesses, such as card rooms, would be prohibited from offering sports betting, and the initiative authorizes private lawsuits to enforce the law.
That didn’t sit well with the card rooms. Joining with city officials, they filed their own initiative in August, now called the “California Solutions to Homelessness, Public Education Funding, Affordable Housing and Reduction of Problem Gambling Act.” The measure calls it “unconscionable that illegal operators are reaping hundreds of millions of dollars in profits from California consumers without providing any tax revenue to support the needs of our state residents for public services and improving our economy.”
The card rooms’ initiative promises a “safe, legal online and mobile sports wagering market that is honest, regulated and taxed” at the rate of 15% plus 1% of the gross, plus a hefty licensing fee. Eligible operators would include “but are not limited to” racing associations, federally recognized Indian tribes, licensed gambling establishments and professional sports teams—Major League Baseball, National Hockey League, NBA, NFL, WNBA and Major League Soccer teams would be allowed to offer online or mobile wagering.
Now a third initiative to legalize sports betting has been filed. Backed by major gaming companies including DraftKings, BetMGM, FanDuel, and Bally’s, it’s called the “California Solutions to Homelessness and Mental Health Support Act.” The proponents say it complements the initiative from the Native American tribes by legalizing online wagering, but only if the operator has partnered with a tribal casino or horse-racing track. The measure sets up a new fund in the state treasury to collect the tax revenue and split it 85-15 between the “Solutions to Homelessness and Mental Health Support Account” and a “Tribal Economic Development Account.”
You can bet on this: if the state’s experience with legalizing marijuana is any guide, high taxes and excessive regulation are sure to keep the illegal bookmakers raking it in.
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