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Tuesday was a big day for Californians hoping to legalize sports betting. A proposal to legalize the activity on Native land cleared committee discussions and will now move on to the state legislature where it faces an uphill battle. From there it would have to move to a statewide ballot vote where it would also need a win.
The bill is contentious due to opposing forces in the state with both sides having something to gain and lose setting up a major conflict before legal sports betting comes to the Golden State.
SCA 6, if it becomes law, would allow for California’s Native Casinos and race tracks (of which there are over 60) to operate sports betting. The bill would allow for mobile betting, the holy grail of sports betting, to operate in the state.
The Bill calls for a tax rate of 10% to be levied on sports betting, a figure that is just below the national average. However, online sportsbooks, which are by far the most popular since it allows for betting from a mobile device, would be taxed at a higher rate of 15%.
Both retail and physical betting would also have an additional 1% mandatory tax added to them in order to raise proceeds for the state’s Gambling anonymous aid resources. This kind of legislation is always introduced when a state is debating legalizing sports betting as both a way to help those who are affected by the negative impacts of sports betting and also as a way to make it easier to coerce the votes necessary from legislators who may traditionally be anti betting holdouts.
In a state that has the highest population in the country, and generates some of the largest sports-related revenue, a lot is at stake. Two sides have emerged as being for and against the proposed bill and both sides have engaged in heavy lobbying and posturing.
A major coalition of tribes representing well over half the tribes in California came together to sign a letter to the legislature laying out their opposition to the sports betting bill. At the heart of the issue is a small write-in on the bill which reaffirms the state’s non-native affiliated card rooms to continue legally operating Nevada style card games like blackjack and poker.
The tribal coalition posits that the new bill would infringe on a previous constitutional amendment passed in 2000 that designated them as having the sole authority to operate these types of card rooms in the state.
On the other side of the debate is the powerful California Gaming Association, a coalition of 49 cardrooms across the state. The coalition would ultimately be closed out of sports betting with the passage of the new bill, but would nonetheless gain a major victory against the current Native monopoly on gambling casinos in CA. The current legality of these cardrooms that are operating in the state is something of a hot debate, and the Association is looking for a final piece of legislation guaranteeing them their place to legally operate in the state.
With so much money at stake, the two sides have put a lot of energy and resources behind their lobbying efforts. It remains unclear who will ultimately prevail but the passage of this bill seems to be in danger.
With so much pressure both for and against it seems unlikely that such a contentious bill such as this will be able to break the two-thirds threshold needed to pass the state legislature and move on to the November ballot where it would need further approval from a majority of voters to be legalized.
With these considerations it is still a major movement for sports betting watchers in the Golden State since even having the discussion taking place on the floor of the California State Assembly brings the issue to the attention of legislators.
It is also important to note that CA has one of the largest deficits of any state, now approaching $54 billion! A sport betting tax going towards state schools or lowering the deficit has been a successful argument in other states that have moved to legalize sports betting, and interested parties in CA believe it could be applied to their state as well.
However, in a state with a $54 billion dollar deficit, even the hundreds of millions in tax revenue that sports betting could produce would still be inadequate to address the ever-growing problem.
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