Now that Massachusetts has entered the fold of states that have legalized sports betting, the eyes of the nation turn to another state that has long held out of the market: California. Here’s a look at what legislators in the Golden State will have to consider if they plan on permitting sports wagering.
Things to Consider
States that have dragged their feet when it comes to legalizing sports betting have listed a number of reasons for their reluctance, many of them inconsistent with one another.
Many states in the Deep South, long a bastion of cultural conservatism, have resisted the push to legalize sports betting. Interestingly enough, they have less strict rules than many other states, despite their conservative outlook: betting on college sports is limited in many states because college athletes have a protected status as amateurs. Sports betting is legal in Louisiana and Arkansas, however, and neither state has any restrictions regarding betting on college sports:
perhaps because of the massive fan bases that SEC schools like LSU and Arkansas draw in (and as a result, the increased likelihood that people will be interested in betting on them).
The SEC is a powerhouse in nearly every college sport: though they’re typically thought of as a football-first conference, the Alabama Crimson Tide currently have the second best odds of winning the 2023 NCAA Men’s Basketball Tournament, listed at +800 at several sportsbooks. In states where wagering is regulated, make legal sports betting enticing enough to deter local bettors from swarming to offshore platforms by offering the advantage of promo code like Fanduel where the bettors can have generous welcome bonuses. It’s no surprise, then, that legislators in southern states want to capitalize on that market.
Following legalization there are still a plethora of things for legislators to consider, and hoops for prospective casinos and sportsbooks to adhere to. Take Florida, for example, where sports betting went live in November of 2021 but was quickly paused—and has yet to resume more than a year later—because of a disagreement between the state government and the Seminole Tribe regarding the latter’s sovereignty when it came to opening a sportsbook.
The government of Massachusetts has taken their time in working out exactly how to oversee Bay State bookies, deliberating exhaustively on everything from tax rates to which sportsbooks and casinos they want to license. While that can be frustrating for bettors raring for a chance to wager on their favorite teams, consumer protection is never a bad idea, and it’s one that California lawmakers have cited as a concern in their decision to legalize sports wagers. If it happens, expect California to take a similar, measured approach as they weigh the best popular options.
California voters have a say too, and ruled against legalizing sports betting in November of 2022. Whether that position stays consistent remains to be seen.
What are the Benefits?
The most obvious draw for Californians and their legislators alike is the massive profits that legalizing sports betting will bring to the state.
Sportsbooks in New York went online in January of 2022, and governor Kathy Hochul reported this January that the state brought in nearly one billion dollars ($709.2 million from taxes and another $200 million from sportsbook licensing fees) in their first year of operations. That figure is the leading performance of any state to legalize sports betting (helped along by a lofty 36 percent state tax on winning bets), and they did so in only the first year of operation.
California has nearly double the population that New York does, and an economy that would be the fifth-largest in the world (ahead of India and just behind Germany) was its own sovereign nation. With a host of teams and their devoted fans residing in the Golden State, it won’t take much for California’s revenue from legalizing sports betting to smash records just like New York did.
California, like New York, has a massive share of the professional sports fan pie, with 15 teams in the Big Four (NFL, NBA, NHL, and MLB) calling the state home compared to New York’s ten—and that’s before you even take the college teams or other sports like MLS into account.
With a host of teams and their devoted fans residing in the Golden State, it won’t take much for California’s revenue from legalizing sports betting to smash records just like New York did.
Where Does the Money Go?
Many states that have already legalized sports gambling have made sure to devote the taxes they levy to a good cause. New York’s tax dollars have been earmarked for improving schools, and fostering youth sports programs, and they’ve also paid the money they bring forward by creating initiatives to help prevent problem gambling.
Massachusetts, on the other hand, has worked to improve the quality of its workforce and the lives of its children by creating the Workforce Investment Trust Fund and the Youth Development and Achievement Fund, both of which are funded by their Gross Gaming Revenue (GGR) tax.
Related Posts
