If recent polling accurately predicts November’s election results, legal online sports betting is unlikely to be available in California any time soon.
However, public polls have been wrong before.
With a little more than a month until the Nov. 8 General Election, there is still an outside chance one or both of the two competing ballot initiatives could pass.
Propositions 26 and 27 would legalize and regulate California sports betting in different ways. Prop 26 permits in-person sports betting, while Prop 27 opens an online market. If that happens, most industry experts believe the Golden State would easily become the largest legal sports betting market in the U.S.
California’s legalization of a regulated gambling segment could lead to any number of changes to the current betting landscape. Here are four tech angles worth considering if (and that’s a really big ‘if’) California sports betting actually happens.
M&A
Online sports betting is legal in 21 states and Washington D.C.
A few well-known operators control the bulk of the digital market in most states, namely FanDuel, DraftKings and BetMGM. Dozens of other operators ranging in size and public profile split the remaining market share in many jurisdictions.
Online legalization in California could cause a seismic shift for U.S. operators due to Prop 27’s high cost of entry. Sportsbooks looking to do online business in California would have to pay a $100 million license fee. That is the largest such cost in any legal state in the country.
The seven operators backing Prop 27 could afford the license fee. But smaller operators or those still working on the margins might not.
The addition of California to the sizable U.S. market share controlled by the larger operators would likely lead to mergers and acquisitions. A lot of minnows may get swallowed by whales if California voters approve Prop 27.
Geolocation
A major California tech giant has already impacted legal online sports betting in the U.S., although not intentionally. When Apple updated its terms and conditions in 2019, online sportsbooks scrambled to meet the new criteria.
A Vancouver-based geolocation company called GeoComply was ready and waiting to solve the dilemma.
Today, GeoComply offers services to FanDuel, DraftKings, bet365, William Hill, Caesars, BetMGM and Bally’s (among others) in nearly every state where online gambling is legal. There are other geolocation providers as well, such as LocationSmart and MaxMind.
But Silicon Valley has yet to really get involved.
That could change if California online sports gambling becomes a reality. Even with GeoComply’s near monopoly on tracking services, an SV-based company may jump at the opportunity to create a competing product.
Crypto
Brick-and-mortar casinos are not widely embracing cryptocurrency. A few are trying to implement crypto on gaming floors but the industry, as a whole, still relies on cash.
Internet gambling presents an opportunity for operators to experiment with new forms of digital payments, including cryptocurrencies.
California has more of a hands-off approach to regulating crypto than other states, but the legalization of online sports betting may be a catalyst for legislative action.
It’s not unrealistic to expect an online gambling company to lean on blockchain tech as a means to process transactions in the very near future. Crypto may be a way for a new startup sportsbook or fledging company to endear themselves to a younger demographic.
It makes sense that the home of Silicon Valley gets involved in some form or fashion.
Esports
Stop us if you’ve heard this one before: esports is the future of the gaming industry.
For all the international popularity of esports and the eye-popping economics attached to them, the niche segment has yet to take off with U.S. gamblers.
Casinos in Las Vegas and Atlantic City have explored ways to attract esports players and gamblers, with varied success. But sportsbooks may be able to bridge the gap.
Younger gamblers are more likely to play video games and, therefore, may be more inclined to bet on them. Perhaps California online sports betting might finally bring enough esports gamblers into the fold to take the practice mainstream.
