Hotly Contested CA Sports Betting Bill Advances Out Of Committee

Posted on June 3, 2020 - Last Updated on June 2, 2020

The California Senate Governmental Organization Committee held a hearing on a sports betting legalization amendment Tuesday, but spent little time debating the legalization of sports betting. The SCA 6 legislation advanced out of committee, but not before many voices chimed in on the continuing question of the legality of California cardrooms.

Dozens of stakeholders voiced opposition or support for the amendment proposal via telephone. Additionally, a handful of witnesses testified in person. Several committee members explained their rationale for their votes as well.

The debate preceding the SCA 6 vote Tuesday

SCA 6 is a potential amendment to California’s constitution that would change the landscape of legal gambling in the state in several ways. Those include:

  • Legalizing brick-and-mortar sports betting at off-track betting sites, racetracks, and tribal casinos in CA
  • Allowing those facilities to offer online wagering
  • Giving tribal casinos the freedom to offer craps and roulette
  • Expressly legalizing cardrooms’ offering of banked games

The majority of the debate focused on that final item. The hearing became an extension of the ongoing struggle between cardrooms and tribal casinos in CA.

Dozens of cardroom operators and representatives of the cities they inhabit testified in person in support of the amendment. Nearly the same number of voices chimed in their opposition.

A common theme among supporters was the economic impact of the cardrooms. Not only do cardrooms employ Californians, supporters argued, but the taxes they pay to cities constitute a majority of the funds those cities depend on to provide their services.

On the flip side, representatives of indigenous tribes stated their beliefs that cardrooms’ operations are illegal. Some representatives also voiced a belief that online wagering on sporting events would cut into their revenue.

After all the members’ and stakeholders’ testimony, the committee voted 9-3 to advance the potential amendment.

What happens to SCA 6 now?

SCA 6 now proceeds to the Senate Appropriations Committee.  That committee will hear all bills put on notice on June 9.

That committee is focused on the fiscal impact of potential pieces of legislation. Therefore, numbers discussed in the Governmental Organization Committee hearing should prove pertinent. An analysis of the bill provided those figures.

Analysis from consulting firm Eilers & Kreijcik estimates that Californians illegally wagered $18.7 billion on sports in 2016. It also stated the proposed 10% tax on retail handle and 15% tax on online handle could bring $200 million to the state’s coffers in the first year, with a further $500 million in average annual revenue once the market reaches maturity.

In a time when California faces a budget shortfall of over $50 billion thanks to COVID-19 and other factors, those numbers could be enough to advance the proposal out of committee. If that happens, it could advance the proposal to the full Senate floor.

It’s uncertain whether a vote would take place right away, however. The companion proposal in the General Assembly, ACA 16, is still pending assignment to a committee.

The time to do so is quickly running out, however. In order to appear on the ballot this November, the amendment proposal must pass with a 60% vote through both chambers of the CA Legislature by June 25.

The need to get everyone on board quickly

The numbers of the situation prompted some different opinions. One was that, since the impact would be minuscule in comparison to the state’s needs, there was no rush to push it through. Instead, the state should gather together all stakeholders and take time to discuss the matter.

Given the dissenting voices during Tuesday’s hearing, the likelihood of bartering a peace between cardrooms and tribal casinos over the next three weeks seems low. Nonetheless, that might be the hurdle this proposal has to clear.

The discussion during Tuesday’s hearing shows how tribal casinos have the ears of some CA legislators. If their opposition remains staunch, getting to 60% in both chambers may prove difficult.

Even if the proposal does reach the ballot, the tribes may pose a threat to its ratification at the ballot box. They are working on getting their own measure alongside it this November.

If that happens, whichever proposal receives more votes will prevail. That may be a moot point, however, if SCA 6 doesn’t survive its next test.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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