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California could become America's sports betting capital as rival groups eye November ballot

Patrick McGreevy, Los Angeles Times on

Published in Business News

SACRAMENTO, Calif. -- Two years after the U.S. Supreme Court removed legal barriers to sports betting, California voters could be asked in November to join 14 other states in allowing legal wagers on athletic contests, creating a lucrative industry worth billions of dollars and intense competition among rival gambling interests in the state.

On Tuesday, a coalition of 18 Native American tribes was given approval to begin circulating petitions for a statewide ballot initiative that would allow sports betting at tribal casinos and horse racing tracks, but not at rival card clubs or on the internet.

"This is an important step in helping ensure sports wagering is restricted to adults over 21 at highly regulated and experienced locations," said Mark Macarro, tribal chairman of the Pechanga Band of Luiseno Indians, which operates a casino in Temecula. "The measure will also result in new revenue for mental health programs and vital services like public safety and education."

Card clubs vowed to campaign against the tribal casino proposal and instead support another ballot measure being considered by the California Legislature that would apply to a larger group of gambling interests.

California voters have given their blessing to legalized gambling three times -- first through the creation of a statewide lottery in 1984, then by authorizing tribal casino operations with ballot measures approved in 1998 and 2000.

The stakes are high both for the state and companies that might be licensed to offer sports betting, said Democratic Assemblyman Adam Gray of Merced, a leading proponent for legalized sports betting and chairman of the powerful Assembly Governmental Organization Committee.

 

A legal sports betting market could bring in $2.5 billion in gross revenue annually in California, the largest market in the country, according to Chris Grove, a managing director for Eilers and Krejcik Gambling LLC, a research and consulting firm that has provided estimates to California lawmakers.

The market could generate $250 million to $500 million in tax revenue for the state based on whether the tax rate is 10% or 20%, Gray said.

"It is clear that we are quickly heading in the direction of a well-thought-out, legal sports betting framework here in California," Gray said at a hearing earlier this month. "We need to create this framework to ensure regulatory oversight and provide consumer protections to get this long-standing and emerging activity out of the shadows of the illicit or black market."

A national wave of new gambling laws was triggered by a 2018 U.S. Supreme Court decision that struck down a federal prohibition on sports wagering. Betting on football, baseball and other sports is allowed in 14 states, including Nevada, New Jersey and Pennsylvania.

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