Browse articles by topic

California bill proposes exclusive betting rights for tribes and tracks


A constitutional amendment that would allow sports betting in California has been referred to the committee on governmental organisation, after details were added to the bill outlining how sports betting in the state would function, including allowing online betting.

The amendment, SCA 6 was proposed by Senator Bill Dodd and is complementary to Assemblymember Adam Gray’s ACA 16. Both bills were first introduced in June 2019. At the time the bill only set out plans to allow for a statewide referendum on the issue, which would have to be backed by two-thirds of voters before it could come into law. 

It has now been significantly expanded, and covers retail betting, which may be offered by racetracks and North American tribes, similar to the proposed ballot measure put forward by a tribal coalition in November last year.

Unlike that ballot measure, however, SCA 6 and ACA 16 would allow each licensee to offer one mobile skin alongside the retail offering. Tribal sources have previously told iGB North America that they were unwilling to include mobile betting in their proposal, as they did not believe it would be supported by California citizens.

Those placing a wager must be 21 or over and racetracks may also operate one satellite wagering facility away from their on-track location.

In addition, the bill would also amend the state constitution to recognise the authority of card rooms and player-dealer games. The line is intended to appease card rooms, which vehemently opposed being shut out of any future betting market when the tribal plan was published. The California Gaming Association, the association for the state’s cardrooms, are yet to comment on Gray and Dodds’ bill.

Player-dealer games offered by card rooms have long been condemned by tribes, which claim the games violate their exclusive rights house-banked games. As with the tribal proposal, Native American casinos would also be gain exclusivity for dice and roulette games, another element opposed by the cardroom industry. 

Online operators would be expected to pay an initial $5m license fee, plus an annual renewal fee of $1m. Retail betting would be subject to a 10% gross revenue tax, which rises to 15% for online. A further 1% of revenue must also be allocated to fund problem gambling programs in the state.

Dodd and Gray said the amendment could generate revenue of $500m to $700m, at a time when California faces a $50m budget deficit, due in part to the novel coronavirus (Covid-19) pandemic.

“Like many of you, I’m not a gambler but I see how important this is for the well-being of California,” Dodd said of the bill. “Even if you don’t bet, there is good reason to support this bill.

“Revenue from sports wagering will help us avoid teacher layoffs and painful cuts. At the same time, it will allow us to regulate a practice that happens anyway.”

The sponsors said as well as using funds raised from legal betting to repair the health and economic damage caused by Covid-19, money could go towards education and public safety programs. It would also take wagering out of the black market in which California residents are spending billions, they said.

“Gambling is the last thing on the minds of many hardworking families during this time of crisis,” Assemblymember Gray said. “However, the legalization of sports wagering will create much needed revenue for programs in education and public safety at a time when the state is facing down a $50 billion deficit.

“We can put an end to this black market and restore critical public funding – that’s a win-win.”

ACA 16 or SCA 6 would need to garner support from two thirds of the House and Senate to pass into law. The matter would then be put to voters, most likely on the ballot for the November 2019 elections.

The fleshed out proposal comes as it looks increasingly unlikely that the tribal coalition’s proposal will secure enough signatures to be included on the November ballot. That requires 997,139 valid signatures by 25 June, though Covid-19 has effectively put a halt to efforts to gather this support. The state has not yet announced any extension to the signature deadline.