Could Sports Betting Help CA Economic Woes?

California’s state budget has been ripped apart from the spread of the coronavirus and the havoc it has wreaked on its economy. Two lawmakers are trying to convince their peers that legalizing sports betting in the Golden State could help the budget and off-set some of the devastating losses already seen.

Assemblyman Adam Gray (Merced) and Senator Bill Dodd (Napa) are pushing to add an amendment to the state constitution and want residents to vote on the matter in November. The amendment would allow horse racetracks and tribal casinos to also offer sports betting. The wagering would be allowed at physical locations and via mobile devices.

But as with all matters revolving around gambling in California, the subject is a highly contentious one. The many gambling interests in the state are likely to battle it out against one another to get in on the potential revenue, as we’ve seen with the question of legal online poker in the state. For over a decade, two sides representing a mixture of tribes, card rooms and racetracks have put obstacles in the way of any progress made in legal online poker, and the result is that nobody has managed to tap into this potentially valuable market.

Analysts believe that the question of sports betting could go down the same path.

Although 22 states have already legalized sports betting since the US Supreme Court ruling in 2018, California is considered an important market, because of the size of its population and its strong presence in the four major professional leagues.

It is estimated that COVID-19 has so far caused a $54 billion deficit in California’s budget. The lawmakers predict that legal California sports betting could raise at least $200 million in its first year, with the ability to reach revenues of up to $700 million a year.

“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,” said Senator Dodd in a statement recently.

The proposed law will see California impose a 10% tax on gross revenue for physical sports betting and 15% on mobile/online betting.

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