A state’s economy consists of various industries which operate within its borders. Naturally, some states have a favorable position for some industries that can dominate and massively contribute to their budget and well-being. The gambling industry has the potential to grow in any state, especially in the Golden State. All sports betting is regulated, but its restrictive nature could change in 2024, and there are even a few deviations today. And a final push toward legalization could bring benefits for all parties involved.
1. Possible revenue
The numbers don’t lie, and going way back in 2018, the gambling industry in California earned $850 million through revenue. The main income comes from native-owned casinos, and there are 69 casinos currently on native Indian grounds. Due to the Indian Gaming Regulatory Act, their lands are exempt from federal law and thus can offer gambling within casinos, earning $8 billion in annual revenue after payouts.
It’s not hard to imagine that legalizing CA sports betting in 2024 would bring more revenue to casinos and the state through taxes. California is one of the largest and wealthiest states in the US, so it could have the largest regulated gambling market, should the new legislative propositions pass and get implemented.
2. Propositions 26 and 27
To see the future, one must research the past. Pushes toward legalizing and making gambling laws more lenient have been met with blocks and overwhelming negativity, but progress has been made. The odds are not in the gambling laws’ favor, but that only means a potential win will be that much greater. Because Americans place over $57 billion on sports bets in 2021, any state that opens up to such a market can profit.
Proposition 26 aimed to do exactly that by allowing tribal casinos and state horse tracks to offer in-person sports betting. The current array of available games would also expand to dice games, craps, roulette, and others. Within the law, propositions have been made to place taxes on bets at horse races. The tribes would naturally not get taxed, as they are sovereign, but they would reimburse the state of California by some margin, bringing funds back to the budget. Potential license fees and the increase in available games would all lead to more jobs and a rise in tourism.
But, sadly the proposition was rejected by a large 30/70 margin. Its pair, proposition 27 aimed to allow online sports betting in California but also faced failure with 17/83 odds. The online gambling market in the US is projected to earn more than $7.5 billion in 2023 alone. While it may be too late now, California could join this lucrative market in the following year and onwards, should the winds change.
3. Eagle1 initiative
One of the main driving factors toward a change in the current legislative landscape is the Eagle1 Acquisitions Corp. Should their proposition pass, the current Article IV, section 19 of the California constitution would change favorably towards online gambling and gambling in general. Roughly speaking, local tribes earn about $1 million per year, but to gain support and votes the Eagle1 initiative proposes an increase to about fifteen times or more.
It gives more control to the local tribes, legalizing tribal sports betting, and such a positive and regulated environment could make California the best market in the US. Early predictions place first incomes at $3 billion a year, and go as high as about $60 billion in wagers, with the proposed changes. To seal the deal, the initiative holders state that local tribes would need to provide any financial backing for the bill. Its total cost of $25 million would be covered by the Eagle1 corporation, showing that it aims to gain the local tribe’s trust and support.
Eagle1 plans to get into the bailout before the 2024 elections, and should it pass, these drastic changes could change California’s gambling landscape forever.
4. Online gambling
Los Angeles, San Diego, San Francisco, and other towns in California are considered tech hubs, where plenty of tech-savvy people would enjoy access to online gambling apps and opportunities. Besides the new jobs that online gambling would bring, the state could place taxes on any potential online gambling profits and licensing fees.
If we take a look at New Jersey, which legalized and regulated gambling ten years ago, they earn over $900 million from online gaming revenue. In turn, this revenue generates millions in tax revenue. Now multiply that with California’s potential, and it’s easy to see a bright future for the industry.
Local tribes fear losing their grip and source of income from potential new regulations, and other groups are alert about the negative sides of unregulated gambling. While these are valid concerns, finding common ground and developing a solution that can benefit all is possible, and California is keeping its options open. Plenty can still happen in 2024 and onwards, as the cards are still in the air!
Also Read: Exploring the US Gambling Market: What to Expect from New Online Casinos
