California Lawmakers Submit Sports Betting BillBill Would Allow Tribal Casinos And Race Tracks To Offer Online And Retail Betting, But Political Hurdles Still Remain |
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The economic downturn that stemmed from the reactions to the COVID-19 pandemic caused a decline in tax revenue as well.
In California, a couple of lawmakers saw the budget deficits and decided that one of the easiest ways to alleviate the shortfalls is through legalizing sports betting in the country’s most populous state.
According to a report from the New York Daily News, Sen. Bill Dodd and Assemblyman Adam Gray, both Democrats, submitted bills that would amend the state’s constitution, making both retail and online sports betting legal in the Golden State.
The spread of coronavirus and the business shutdowns in response to it caused a $54 billion deficit in the state’s budget, according to Gov. Gavin Newsom. Sports betting is one of the only new markets that the state could use as a new revenue stream to help put a dent in that number.
“The amount of money that can be raised in benefit of the state with online wagering is estimated to be up to $700 million a year,” said Dodd to media outlets. “We’re looking to get those revenues for a COVID-type budget where we need to be looking out for every opportunity to increase our revenues at a time when we have to make so many cuts.”
Like other states that have taken opted to change the state constitution, the voters would have a final say on the issue through a ballot referendum on the subject this November, if the bills pass.
The bill would tax gross revenue for brick-and-mortar betting at a 10 percent rate, while revenue from online sportsbooks would be hit with a 15 percent rate. Operators would pay an initial $5 million licensing fee and a $1 million annual fee for online books. Licensees would be required to send one percent of all revenue to help fund problem gambling programs.
It would allow sports betting at tribal casinos and at the state’s four horse racing tracks, but not at cardrooms.
In exchange, the cardrooms would be allowed to spread traditional house-backed casino table games like craps and roulette. Those games are currently exclusive to tribal casinos.
The tribes in charge of those casinos, however, think they are getting a raw deal. Many cardrooms have used workarounds in the legal framework to offer traditional house-backed card games like blackjack in recent history, leaving tribal leaders feeling like they are getting nothing of value in the trade.
“We urge Senator Dodd to remove the provisions relating to California cardrooms until that industry exhibits consistent behavior that proves that they are both willing and able to operate within the confines of the law and regulations that currently exist,” said California Nations Indian Gaming Association president James Silva in a statement.
In an effort to keep the California sports betting market for themselves, California tribes filed a ballot initiative of its own, that would let citizens vote on whether tribal casinos could allow sports betting. Nearly 1 million signatures were needed to put the issue in the hands of the voters, but the COVID-19 pandemic halted the signature-gathering efforts.
The multiple competing interests make any sort of gambling bill in California tough to pass as every group tries to fight for its piece of the pie. That very dynamic is why the bill’s sponsor isn’t getting his hopes up about it passing.
“I’m not overconfident about getting this across,” Dodd told the New York Daily News. “It’s going to be some heavy lifting. But I think the moment is right for us. The reality is that we’re trying to find that sweet spot. We’ll find out if we did.”
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