California Primed to Dominate Untapped Esports Betting Market

Posted on November 18, 2019

If and when California legal wagering becomes reality, the Golden State could be unique among its contemporaries. California could be an unmatched market for esports betting.

The presence of the esports industry in the state, the age demographics of California’s population and the legal landscape of wagering on esports all work toward that potential. The question is whether California’s government will have the foresight to take advantage of the opportunity.

Esports betting and the industry in California

Outside of possible challenges from New York and Texas, California is the most important state to the esports industry in the US. Several of the world’s most popular and profitable esports brands have franchises there.

That includes teams in the League of Legends NA LCS, the Overwatch League and individuals who compete in Fortnite tournaments. Among those are the reigning OWL champion San Francisco Shock and popular Fortnite streamer “Tfue.”

California has more than just a tremendous presence of competitors in the industry. Several venues in the state, like Oakland’s Esports Arena, play host to major events. That includes Twitchcon and the recent Overwatch World Cup that took place in San Diego.

Game developers and league sponsors also call California home. That includes San Francisco-based Ubisoft.

The esports industry undoubtedly contributes to the economy in California. A major reason for the popularity is that the state’s demographics represent the target audience.

Last year, the largest age group within the Golden State’s population was between the ages of 25 and 34. That group represented 15.3% of the population or an estimated 6.1 million people.

Conveniently, that is the exact target demographic for not only esports but also for betting on traditional sports. That means there’s potential for tremendous crossover if the market allows for it.

The biggest obstacle could be in Sacramento

Currently, California state law does not allow for esports betting. That could change with a possible constitutional amendment, however.

There will be a hearing on that matter in January, and a vote could take place as early as November 2020. If the amendment becomes part of the state’s constitution, the Golden State’s Legislature could begin working on a legal framework right away.

That will be where the question of whether Californians can legally bet on esports will be answered. Most states that have legalized sports betting have excluded esports from the wagering options.

New Jersey has been a small exception to that. The Garden State has recently allowed its legal sportsbooks to accept bets on League of Legends competitions.

Las Vegas sportsbooks do take action on esports as well, although California would have a tremendous advantage on both Jersey and Vegas in the size of its fixed population. States like Indiana and Iowa have kept esports betting in the realm of illegal activity. If California were to follow that trend, the great potential to dominate the esports betting market would vanish.

If California ever becomes one of the few states to allow legal esports betting, the established presence of the industry in the state could create a market for the product unlike any other in the US. The question is whether, and how soon, the state will tap into that potential.

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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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