Massive Blow to Online Gambling’s Expansion in the USA

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With the growth of online gambling worldwide, it seemed that the only way the industry could go was up. In the United States, however, some state lawmakers aren’t completely on board with the expansion of one of the world’s favorite pastimes. 


As we approach the all-important November general elections, California Democrats have already put out their announcements of endorsements and opposition to various propositions on the ballot — namely, recommending a “No” vote on the online sports betting measure in the state.

Two Sports Betting Initiatives in California

The November midterm elections are coming up and Californians will find much more on their ballots than simply the local and state representatives. This year, there are two measures up for a vote that will determine the legality of sports betting in California in the future. 

The two initiatives are as follows: 


  1. Tribe-backed Proposition 26, called “California Legalize Sports Betting on American Lands Initiative” is a constitutional and statutory amendment that would allow for retail sports betting only on tribal lands.
  2. Proposition 27 is a constitutional amendment and statute that would allow online and mobile sports wagering. 

If the first measure is passed, not a whole lot actually changes. Prop 26 authorizes sportsbooks at tribal casinos and racetracks, which currently already offer gambling activities. If Prop 27 is passed, however, a whole new market opens up, allowing outside operators to come into the state, and online sports betting going live in California as early as next year. 

Proposition 27


Prop 27 is also known as the California Solutions to Homelessness and Mental Health Support Act. Supporters of “Yes to Proposition 27” claim that this plan would guarantee hundreds of millions of dollars every year for permanent solutions to homelessness, mental health, and addiction. 


If approved, the online sports betting industry in the state would be legally taxed and regulated, with a 10% tax on sports-wagering revenues and licensing fees. Once the government’s regulatory costs are covered, 85% of revenues would go directly to homelessness programs and the remaining 15% would go to nonparticipating tribes.


The “licensing fees” mentioned in the proposition are actually a bit higher than alluded to in the language of the proposition. In order to participate in online sports betting in California, operators would be required to pay $100 million in licensing fees — a major sum that would prohibit everyone but the largest online gambling operators from participating.


It’s no surprise then that Prop 27 is backed by online operating giants like DraftKings, FanDuel, and BetMGM, who have funneled millions into the “Yes to Prop 27” campaign.

California Democrats Endorse “No” 


Last week, the California Democratic Party came out publicly against online sports betting in California and recommended that democratic voters in the state vote “No” on Prop 27. Our friends at NoDepositWorld were the first to drop the news that California looks set to reject online sports betting in the state. 


The party’s official announcement included its positions on many of the ballot referendums in this year’s general election. Although they were strongly against online sports betting in California, the party remained neutral on Prop 26, the tribal sports betting proposition. 


This partisan decision spells disaster for the expansion of gambling in the state. The democratic party has dominated the state of California for decades and has controlled both houses of the legislature since 1996. The sad truth is that if the party does not want a bill passed, there’s not much hope for it in the general election. 


Sports Betting in the United States


The legality of sports betting in the US varies widely from state to state and even in jurisdictions within states. In some places, punters can try their luck at live sporting events or private clubs. In others, it’s legal to place a bet online from a mobile device. 


While there remain some issues with online gambling that can be resolved with proper regulatory oversight, the states that have legalized online gambling services have seen some serious benefits in their localities. Currently, online sportsbooks are legal in New York, Louisiana, Arizona, Illinois, Colorado, New Jersey, Pennsylvania, Tennessee, Indiana, Michigan, Virginia, Iowa, and West Virginia.


 Only Time Will Tell 


Experts predict that online gambling in the US (if legalized) could have a massively positive impact, growing the economy, creating jobs, increasing tax revenue for public programs, promoting responsible gaming, and creating safe and legal spaces to enjoy playing casino games or betting.


So, while the ruling party in California seems dead-set against online sports betting, ultimately it’s up to the voters of the state to make a decision in November. Only time will tell what Californians choose to do — and which proposition they prefer. 
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