Walters: Who Will Control Sports Betting in California?
Three decades ago, it became apparent that casino gambling was coming to California and the only question was who would control and benefit from it.
Within a few years, we had the answer. Indian tribes audaciously expanded bingo parlors into some casino-like games and machines, daring authorities to crack down, and used the proceeds of their expanded — and perhaps illegal — activities to finance a political drive that locked in their monopoly.
Tribal leaders outhustled their rivals, including Nevada casinos, horse racing tracks and poker parlors, and California is now dotted with dozens of their casinos, some of them elaborate resorts, that rake in many billions of dollars each year.
History may soon repeat itself. Sports betting is coming to California, but once again the question is who will control and benefit from it. California’s casino-owning tribes are moving quickly to grab a monopoly, and once again they face well-heeled rivals.
Legalizing Sports Betting
As this year’s professional football season begins, the National Football League is allowing gambling companies to advertise during its games, telling the Wall Street Journal “it made sense for us to really introduce sports betting in a thoughtful way into our national footprint.”
The NFL also selected Caesars Entertainment, DraftKings and FanDuel Group as partners who will pay many millions of dollars for the right to display NFL content on their betting sites.
So what about California?
Tribes Hope to Gain Control With Ballot Measure
Bills to legalize sports betting in the nation’s largest and richest market have kicked around the Legislature for several years but lawmakers have been unable to agree on a system that would please all of the contending gambling interests.
With deadlock in the Capitol, casino-owning tribes decided to grab control via a ballot initiative that’s already qualified for the 2022 ballot.
If approved, the measure would authorize betting on professional and collegiate sports at tribal-owned sites and four horse racing tracks — the latter an obvious gesture to a one-time rival to reduce potential opposition.
The measure also sanctions roulette and craps in tribal casinos and pointedly requires sports bets to be placed in person at the designated sites, thereby closing off on-line wagering until and unless the tribes want it.
The state’s poker parlors are opposing the measure, not only because it would create new competition for gamblers’ dollars but because it contains language that would subject them to increased state regulation.
Rival Initiative Fights Heavily Funded Tribe Campaign
It’s a David vs. Goliath situation because the tribes can throw almost unlimited funds into a campaign for the measure — in fact, they already have 10 times as much in their campaign treasury.
However, several cities that have poker parlors have filed a rival initiative that would also would authorize sports betting in Indian casinos and at racetracks but expand legalization to poker parlors, professional sports teams themselves and — most importantly — on-line betting operations.
The latter provision virtually invites the big on-line wagering corporations to pour millions of dollars into qualifying and passing the new measure and perhaps into opposing the tribal initiative. Whichever measure garners the most votes would prevail if their provisions conflict.
The stakes in this political showdown are immeasurably large — many billions of dollars in revenue. Will the tribes once again outfox the opposition or be compelled to share the bounty with their rivals? Or will a legislative compromise cancel the expensive ballot measure duel?
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.