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Legal sports betting: California among states set for 2020 push

Thomas Barrabi

California state lawmakers held a preliminary hearing on sports betting Wednesday, joining several other states considering legalization in 2020 in a rapid push that could soon eclipse more than half the United States by year-end.

Overseen by state senators and assembly members, the hearing will include commentary from sports betting industry experts on factors that should be considered in sports betting legislation. California state Sen. Bill Dodd and Assemblyman Adam Gray, both Democrats, plan to use their feedback to help shape a bill for eventual inclusion on the November ballot, according to Legal Sports Report.

California is one of nine states exploring legalized sports betting in 2020, according to the American Gaming Association, a lobbyist group that represents the U.S. casino industry. A total of 20 states, have legalized some form of sports betting since the U.S. Supreme Court struck down a federal ban in May 2018. , Michigan is the latest state to do so with legislation that passed in December

“We will likely approach a total of 30 states with some form of legal sports betting by the end of 2020,” said Chris Grove, managing director of sports and emerging verticals at Eilers & Krejcik Gaming.

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While sports betting operations in many states are still in their early stages, the legal industry has shown signs of growth. U.S. gamblers bet a total of $1.86 billion in the month of November, a total that marked an 88 percent increase compared to the same month one year earlier, according to the AGA.

Given California’s population of nearly 40 million residents, including many affluent regions, the potential payoff could be massive.

Proponents for legalization have long argued that a regulated industry would provide a safer experience for gamblers and allow authorities to crack down on illegal activity often associated with the underground marketplace.

Several industry trackers have adopted bullish outlooks for the industry. Morgan Stanley projected in November that the U.S. sports betting market could be worth $7 billion by the year 2025. Citing legal experts.

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In California, Bill and Gray are spearheading one of two movements for legal sports betting. The two lawmakers support a wide-ranging regulatory framework that allows for mobile betting, which has emerged as a lucrative feature in states that allow it, such as New Jersey.

“By legalizing sports wagering, we can avoid some of the problems associated with an underground market, such as fraud and tax evasion, while investing in problem gambling education,” Dodd said last June.

A separate initiative, backed by 18 Native American tribes, seeks to limit live sports betting to physical casinos and racetracks, excluding mobile bets. Fierce competition between the two camps and other stakeholders make passage of a bill by the end of 2020 an unlikely proposition, according to Grove.

“Large states suffer from this dynamic in general. The states are large, meaning the potential market is large and the relevant stakeholders are many and diverse,” Grove said. “Given the size of the prize at stake, those stakeholders are more willing to dig in and less willing to compromise on their preferred vision for legal sports betting. That’s a recipe for legislative stasis.”

To legalize sports betting in California, any bill would have to receive two-thirds approval from both the state Senate and the General Assembly. From there, the bill would be added to the November ballot, where it would require majority approval by voters.

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