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California sports betting bill fails

(Photo by Ethan Miller/Getty Images)

A bid to legalize sports wagering in the the most populous American state failed amid heavy opposition from Native American gaming tribes.

A bill in California’s state legislature to amend the state constitution and allow for legal sports wagering had the backing of several US pro leagues including Major League Baseball, the National Football League, and National Basketball Association. But bill sponsors withdrew the measure after running into fierce opposition from tribal leaders who were pushing a much more limited version of betting that would have limited activity to brick-and-mortar casinos and some racetracks, and excluded online and mobile activity.

The sports betting measure is certain to resurface in 2022. But in the meantime, the expansion of legal sports betting in the US will be blunted without the inclusion of California and its population of nearly 40m people. 

Since the US Supreme Court two years ago allowed states to make their own rules regarding sports betting, more than 20 states have allowed some form of the activity. But the biggest prize of California remains not on board, leaving unrealized for tax generation purposes what has been estimated at potentially more than $10bn in annual illegal wagering activity in the state.

“Given the deadlines for getting a measure on the November ballot and the impact of Covid-19 on the public’s ability to weigh in, we were not able to get the bill across the finish line,” said Bill Dodd, California state senator and a key sponsor of the betting bill. “It remains important that we lift this widespread practice out of the shadows to make it safer and generate money for the people of California.”

Dodd and other advocates claimed the legalization effort would generate $200m in annual tax revenue initially and potentially more than $500m per year as more sportsbooks went live in California.

But it was online and mobile betting, which has shown to represent the vast majority of wagering activity in other early-adopting US states, that proved the key wedge issue, with tribal leaders claiming the Dodd-led bill was “simply bad policy.”

“It injustly rewards the commercial, for-profit gaming industry for their practice of conducting Nevada-style games in flagrant violation of California law,” said the California Nations Indian Gaming Association. “This bill would have threatened brick-and-mortar establishments by legalizing online gaming, which would reward out-of-state commercial business entities and raise regulatory challenges.”

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