Last November, voters in California rejected both ballot proposals that would have legalized online sports betting.
Most startling was the fact that, according to polling, the majority of citizens in the state support some form of mobile sports betting in the state.
But the interested parties and state legislators have yet to arrive at a consensus that can lead to a successful ballot initiative. Once that happens, the state should be true to its roots of progressivism and look at regulations that can make California the safest and most profitable sports betting market in the nation.
Here are five California sports betting regulations PlayCA believes would go in that direction:
1. Benefits for small and large tribes
Although the wave of tribal pushback against Prop 27 and commercial sportsbook operators might have felt universal, it wasn’t. Three tribes publicly endorsed Prop 27, while many others remained out of the debate and didn’t throw their weight behind Prop 27 or Prop 26, the tribal in-person sports betting ballot proposal.
The smaller non-gaming or limited-gaming tribes who supported Prop 27 did so because they worried Prop 26 would just help the large tribes. In other words, they feared a case of the rich getting richer. Prop 27, meanwhile, would have sent money to all non-gaming or limited-gaming tribes.
For things to work in California, there will need to be provisions in place that can assuage the fears of smaller tribes who don’t want to get steamrolled and forgotten in the era of legalized sports betting.
2. Regulations protecting underage consumers
As legal sports betting sweeps across the nation, legislators are focusing efforts on protecting young people. Many states, like Ohio, have banned sportsbook advertising on college campuses. New Jersey prohibited advertising on any social media platform that is predominantly used by a demographic under the age of 21.
An advantage of California getting legal sports betting later than other states is that legislators can take the best regulations that have been proven to work elsewhere.
The state could also choose what many others have: to not allow sports betting on college teams located in-state.
3. Ban on misleading language in advertising
The swiftest change in sports betting regulations in the US has been a reaction to the flood of advertisements in new states. Legislators, consumers and even the NBA are not fond of the ads that use misleading language like “bonus bet” or “bonus.”
In New York, there are bills in place to ban such language, and other states, like Colorado and Massachusetts, have used the regulatory process to bar the use of such language. In Ohio, any use of “free” in describing promo offers has also been prohibited. In many states, sports betting operators are voluntarily agreeing to remove such language, in face of the backlash from consumers and regulators.
California would be wise to include regulations that would limit or prohibit verbiage in sportsbook ads that makes it seem as if betting has no risk.
4. Tax revenue for homelessness
More than $400 million was spent on both sides on Prop 26 vs. Prop 27 in November. At the heart of many of the ads was the subject of homelessness. One side, Prop 27, said tax revenue from sports betting would help solve the homelessness issue in the state. The other side, Prop 26, essentially said “hogwash.”
It doesn’t matter who is right. But all key groups — the small tribes, the large tribes, the commercial sportsbooks, the interest groups, the casino operators — need to constructively address the issue that seems most important to many in the state. Only when people truly believe sports betting can deliver tax revenue to assist with the problem of homelessness in their community will a proposal pass.
5. Sportsbooks required to use data to research problem gambling
As more states pass legal sports betting, and as the activity becomes more popular nationwide, the industry will start to see more problem gambling. That’s expected, because so many more people will be trying it.
But post-legalization is a time when experts can gather data and examine the impact wagering laws have on gambling addiction.
In some states, discussions are underway to require sportsbooks to use the data they collect on their customers’ habits to create profiles that can help predict problem gambling. By using that data (anonymously) to examine trends, maybe states like California can identify problem gambling traits before it blossoms into financial and personal ruin.
Future of California sports betting
Unfortunately for the people in California who want to wager on sports legally, the effort to pass legislation on the activity is stalled.
The next step would be another ballot proposal in 2024 or beyond. Voters would need to pass a ballot proposal directly. Following that, state officials could shape the process for regulating the industry and launching a market. In the best-case scenario, CA sports betting would launch sometime in early 2025.