With Election Day less than a week away, California voters are gearing up to head to the polls.
However, for gamblers in the Golden State, it means an answer on the short-term future of California sports betting. Unfortunately for bettors, the available polling data points to inevitable failure of both sports betting initiatives.
Both Proposition 26 and Proposition 27 are very unlikely to pass at the ballot box. Prop 26 would legalize in-person sports betting at California tribal casinos and select horse tracks. Prop 27 would allow online sportsbooks to accept wagers in California.
This weekly column typically breaks down op-ed pieces or statements from other media outlets or those intimately involved in the process. But with a likely ‘no’ vote coming for these proposals, it’s time to look ahead.
How likely is it that sports betting will ever come to the country’s most populated state?
According to a recent opinion column by Joe Matthews, it’s inevitable.
Don’t fight the trend
Matthews opened his piece by highlighting an expanding tribal gaming market in California. He pointed to the new Sky River Casino in the Sacramento suburbs to make the point.
“Sky River’s opening is just one example of gambling’s unstoppable expansion across our state. Tribes aren’t in fact limited to previously owned lands; they can buy new land so that they can build bigger, more accessible casinos. Sky River sits on land acquired by the Wilton Rancheria Tribe through a federal trust process.”
Just because tribal gaming is expanding rapidly doesn’t mean the rest of the market is as well. But it sort of is.
California cardrooms were allowed long before tribal casinos. Therefore, it would be difficult for more to pop up at the same rate.
But the offerings at these cardrooms have certainly expanded over the last few decades. First, the cardrooms were almost exclusively offering poker games.
In poker, the house doesn’t have an edge against the players. Players are betting against each other, and the cardroom takes a piece of each pot, known as the rake, to pay operating expenses. Since players weren’t betting against the house, it offered a clear distinction from the casinos.
That’s a far cry from what is offered today. Now, there are variations of house-backed games like blackjack.
The cardrooms found a legal loophole by not backing the games themselves. Instead, they give players the option to operate as the bank. But being able to pay out every bet on the table is a serious financial commitment. While the house always wins at these games over the long run, short-term swings happen fairly frequently that could put a dent in the pocket of the player operating as the house.
As a result, “corporations” began popping up. These groups are sometimes funded by competing cardrooms to operate as the bank in the types of games that were previously only allowed at tribal properties.
It’s also why there is a major point of contention between the cardrooms and the tribes.
The tribes believe cardrooms are breaking the law. Consequently, the tribal-backed Prop 26 had a clause that would allow tribes to file lawsuits against cardrooms.
Okay. Maybe Matthews has a point here. California is clearly trending towards a larger overall industry.
With a larger industry comes more power for operators
Matthews uses his first claim to show the cause-and-effect of a larger gambling market.
The more popular an industry gets, the more money flows into it. Thus, those in control of it get wealthier, and affluent individuals gain more influence over society.
He used the nine-figure media campaign implemented by tribes and online operators to help shape the narratives around the competing initiatives as an example.
Additionally, Matthews hinted at the dark side of politics where those with money influence politicians to get their way.
“Gambling money now fuels our politics and casino ads dominate the airwaves.”
This is just objectively true. Leave your own opinions about whether or not this a net positive or negative for society. There is a direct correlation between money and influence in America.
It’s why I’ve argued in past columns against major California newspapers clamoring for sports betting to come from the legislature.
The California gambling industry is not only ever-expanding and large. It’s also incredibly fractured.
Tribal casinos, cardrooms and racetracks are all fighting for their piece of the pie. And those entities will continue to fund the campaigns of those who will help them get it. It leads to a political stalemate when it comes to California sports betting.
Online sports betting is dangerous
Maybe this was his way at showing both sides of the debate. Or maybe it’s his actual opinion.
But as you get deeper into the column, Matthews begins using some anti-gambling rhetoric to show that the gambling industry isn’t all sunshine and rainbows. Specifically regarding online sports betting and the ability to place certain bets during the game.
“It is an immersive environment in which you can bet in real time throughout the game, compiling huge losses in seconds. This type of gambling is highly addictive; the average gambling debt for male addicts exceeds $50,000.”
This is just getting tired and old.
Let’s start with that first sentence. Compiling huge losses in seconds? If we are going to get technical here, all gambling losses compile in literal seconds.
Imagine you are a gambling addict at a sportsbook in Las Vegas. It’s Sunday and there is a whole slate of NFL games. You go up to the window and place a bunch of wagers on the first games of the day. Those tickets aren’t officially losers until the game is over. And that happens in a matter of seconds as well.
Let me cut him some slack here. Matthews might just be using this language to paint a broader picture of the industry and its risks.
But according to the Reason Foundation, gambling addiction rates in America have stayed relatively flat since the 1970s. Furthermore, there is no data from any state with legal online betting showing a spike in problem gambling.
Sometimes, you must be skeptical of statistics
I’m also highly skeptical of the stat he used. Not because I don’t think the $50,000 worth of debt isn’t true. But because I know how some of these stats can be skewed.
I majored in journalism at a small college in New York. The program was a part of the larger communications department. The department published marketing materials that highlighted the average salary of communication students after graduation.
I don’t remember the exact number they used, but it was high compared to what most figures I looked at. Then, one day, a journalism professor shed light on why that number was so high.
One of our most famous alumni is a former professional basketball player named Rik Smits. He was nicknamed ‘The Dunkin Dutchman’ and played for the Indiana Pacers in the 1990s. Over the course of his decade-long NBA career, Smits earned more than $42 million.
And guess what? He was a communications major at my school. The communications department included the salary of a professional basketball player in what they sold as the average earnings of one of their graduates.
So, when I get an unsourced statistic like that, I’m a bit dubious about its origins. There are plenty of very wealthy problem gamblers that could rack up that amount of debt in no time.
Just look at all the unpaid markers NHL forward Evander Kane had in Las Vegas. It’s pretty easy for these averages to look worse than they actually are for the everyday man.
With all that being said, California sports betting is inevitable
Matthews concludes his column with unbridled optimism for California sports betting advocates.
“More gambling is coming to California, more so that even the sky might not be the limit.”
There are no facts to dispute or statistics to dissect here. This is an opinion piece, and this is Matthews’ opinion.
Simply put, I agree with it. The potential market for sports betting in California is massive. Those with the ability to get involved are incredibly wealthy and will do everything in their power to create the industry.
It’s all a battle of how the market is structured and when it gets implemented. It’s highly likely we see a similar battle at the ballot box in two years.