California’s sports betting push is the scene of a high-stakes battle

Sunday's matchup between the underdogs Cincinnati Bengals Los Angeles RamsIt could be the last Super Bowl, an NFL championship game held in a state with no legal sports betting market.

Arizona, Nevada, Louisiana are the three Super Bowls to be held in these states. among 30 states and the District of Columbia with legal sports betting. U.S. betting houses accepted more than $60 billion worth of bets in 2021. This generated over $4.3 billion in revenues. New York's online betting market was launched in January. It received more than a billion dollars of bets within its first 21 days.

Sports betting is growing in the U.S., but California, which is home to the largest population, largest economy, and the site of Super Bowl LVII, isn’t even in it yet.

Californians who want to place a bet at a legal bookmaker in California will have to leave the state when the game begins Sunday afternoon at SoFi Stadium, Los Angeles. To place legal bets, some will cross the border to Arizona, Oregon, or Nevada. California bettors don't need to travel. They will log onto their local bookie's site to place their Super Bowl wagers as they have for decades.

Joey Isaks is a professional sports bettor who lives in Los Angeles. He said that he has used around 100 bookmakers. Most of them are local and only deal in cash.

“Some of them tell when [legalization]They're getting out,” the professional gambler said this week in a phone interview. “But these are like 65 year-old men who have never done anything else. I don’t believe they’ll ever stop.”

Ohio Bengals fans can bet on Sunday's Super Bowl just like Californians. However, Ohio has passed legislation authorizing sports gambling and plans to launch it towards the end of this year. California is still engaged in high-stakes betting.

Rick Arpin (a Las Vegas-based managing Partner for KPMG) said that California's sporting betting potential was “absolutely huge.”

The prospect of sports betting is complicated and competitive

California voters have the opportunity to make a difference in the gambling landscape on Nov. 8. However, bringing sports betting into the state is complex and highly competitive.

The nation's top bookmakers are fighting for a piece with powerful tribal gaming operators. In support of their initiative, and against competing proposals, stakeholder are investing millions of dollar. Sports betting could become the most expensive California ballot measure in history.

Although four distinct proposals were made collectively, only three of them gained traction. Two of the most popular measures would allow online betting. The other proposal, which is currently on the ballot but has not been voted in, would limit sports betting to wagers made at four horse racing tracks and tribal casinos. The outcome of which initiative wins, if any one, could have a huge impact on billions of dollars.

“California really comes down to structure,” Chris Grove, a sports betting industry investor and partner in consulting firm Eilers & Krejcik Gaming, told ESPN. “Depending on who and how sports betting authorization is granted, you could see some very large swings.”

Grove's most optimistic projections indicate that a mature online sports betting market could generate more revenue than $3 billion annually. Industry trade publication VIXIO GamblingCompliance estimates that retail-only betting on sports would generate $356million in annual gross revenue by five years.

“Our research shows California voters prefer an incremental approach to authorizing sports wagering,” Mark Macarro, tribal chairman of the Pechanga Band of Luiseño Indians in Southern California, told ESPN.

Macarro believes that his coalition's initiative to authorize sports betting in California is “the most responsible approach”. He emphasizes that all bets must be placed in person at tribal casinos with safeguards to prevent underage or illegal gambling.

Opponents to a retail-only approach draw attention to the vast underground and offshore markets for sports betting that Californian sports bettors use right now.

“Right now, there is an all-pervasive illegal [betting]Griffin Finan, DraftKings vice president of government affairs, stated that California is a market where there are no age verification methods.

Finan claims that DraftKings will support an initiative to allow operators to use technology that is designed to prevent minors accessing the sportsbook.

Representatives of the card rooms are concerned that the in person proposal is a deceitful attack on their business.

Becky Warren, a spokesperson of Taxpayers Against Special Interest Monopolies said that “the tribal gaming measure does not concern sports betting.” “It's an attempt to expand the gaming monopoly at the expense communities across the state. It also generates countless frivolous lawsuits.”

California's leading sports betting options

Here's a look at three of the most popular sports betting programs in California.

• The California Sports Wagering Regulation and Unlawful Gambling Enforcement Act, supported by a coalition of tribes, led by Pechanga, is the only one that has already qualified to be on the ballot in November. It would prohibit sports betting at tribal casinos or four horse racing tracks. California Legislative Analyst's Office estimates that the measure could boost state revenues by potentially “tens to millions of dollars annually.” It is opposed by tribal gaming operators' competitors, the card rooms.

• The California Solutions to Homeless and Mental Health Support Act allows online betting with revenue dedicated to combat the homelessness crisis in California. This bill is supported by major bookmakers, such as DraftKings and FanDuel, as well as Fresno, Long Beach and Oakland mayors and homeless service providers. While it is still gathering signatures in order to meet the threshold for the ballot, it has met an early benchmark. The Legislative Analyst's Office estimates that the measure could boost state revenues to “mid-hundreds and millions of dollars each year.” Tribal gaming operators are opposed to it.

• The Age-Verified Tribal Online and In-Person Sports Wagering Act would allow in-person and online sports wagering and other new types of gambling. San Manuel leads a separate coalition that includes tribes to support this measure. According to the Legislative Analyst's Office, the measure could generate anywhere from “tens or millions of dollars to the mid-60s of billions of dollars annually,” depending on how it is implemented.

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