Could Other States Provide Renewed Hope for California Sports Betting?

Hope for the legalization of California sports betting is not especially high as we approach 2024. Last year’s epic flameout of two gambling initiatives on the voter ballot left a lingering feeling of chaos and incompleteness. Most experts now don’t think sports betting in California will be approved during the next round of legislative meetings.

To be sure, these sentiments can always change. Many didn’t think North Carolina sports betting stood a chance this past year. Lo and behold, The Tar Heel State ended up approving legal sports gambling. As a state that has historically leaned toward liberal policies, California could most definitely overhaul the collective view of sports betting.

Still, The Golden State isn’t exactly well positioned to see this shift in tenor. Any material change will require one of two things: a complete reinvention of gambling proposals, or an end to the longstanding tension between tribal operators and the best online sportsbooks in the United States.

Which one is more likely? Is either even a legitimate possibility? Let’s explore.

Here’s Why Experts Are Wondering Whether It’s Time for California Sports Betting Proposals to Take a New Shape

If you were expecting us to make you wait for the big reveal on this matter, well, think again.
The approval of California sports betting stands a far better chance if supporters take a different approach entering 2024.

This notion has been bandied about ever since both sports gambling propositions were voted down by residents during the 2022 general election. But the search for alternative proposals has intensified as it’s become clear that the issue back then remains intact right now.

That issue? A lack of alignment between the state’s tribes and online sportsbooks. At present, California tribes have exclusivity to gaming rights. Online sports betting is not getting legalized without their approval. We saw as much in 2022. They used their monumental influence to get lawmakers from both ends of the political spectrum to speak out against Proposition 27, which would have legalized mobile sports wagering in California. Their influence is so great, many have wondered whether a California online sports betting measure will get left off the 2024 electoral ballot altogether.

Optimists will insist the two sides can find a middle ground. Realistically, though, the tribes and online operators seem like they’re too far apart. Tribes want to partner with mobile betting sites in a strictly supporting capacity. In essence, online sportsbooks would help California tribes run their mobile betting operations. To date, the online operators have insisted they be granted more independence, a level of transactional freedom the tribes refuse to support so far.

Typically, we might just assume online operators would eventually relent. They would agree to brick-and-mortar gambling terms, partner with tribal casinos for a few years and then look to revisit the legalization of California online sports gambling down the line. However, at this point, online operators have seemed more inclined to sit out of the market entirely rather than given in to tribal terms. At this rate, we could see online sportsbooks spend more money on trying to prevent retail gambling from being legalized in 2024 than on the approval of mobile wagering itself.

Could California Follow in the Footsteps of Tennessee or New Jersey?  

Clearly, there is a wide chasm separating California tribal operators from mobile sportsbooks. Without a wholesale change of heart from one side, the next year’s attempt to legalize sports betting seems doomed to fail. That is, unless The Golden State gets creative with its approach. 

What would that look like? Baird Fogel and Kristi Thielen from the Times of San Diego recently collaborated on a piece that explained the merits of California sports betting following in the footsteps of Connecticut sports betting or even New Jersey sports betting:

Take Connecticut, where tribes own the immensely popular Mohegan Sun and Foxwoods resort casinos. Recognizing the opportunity in online sports betting, the tribes collaborated with the governor’s office to pass legislation creating three online “skins” (i.e., the number of unique brands allowed under each individual gaming license): one for FanDuel, which partnered with the Mohegan Tribe; one for DraftKings, which partnered with the Mashantucket Pequot Tribal Nation (who run Foxwoods); and one for the Connecticut Lottery. New Jersey has adopted a similar skins model and this structure has paid off: a recent report estimates a 50 percent boost in the online market’s revenue and nearly 90,000 additional unique customers as a result.

These models look great on the surface. They allow tribal operators to assume the vast majority of gaming control and influence, but they also dole out licenses to a select group of online operators. As things currently stand, it definitely makes sense for California lawmakers to investigate a similar setup.

Whether that happens, though, is anyone’s guess. California has yet to propose a Connecticut-like sports betting model, and that absence may be telltale. Tribes have far more power in The Golden State than they do in Connecticut or New Jersey. They may not see a reason to soften their stance against online operators at all. The California sports betting market is also far larger than those in Connecticut or New Jersey. A limited number of sports gambling spots may wind up being aggressively opposed by online operators smaller than FanDuel or DraftKings, who don’t have as much capital to bid on licenses. 

Potential hangups in mind, a “skins” model is still worth exploring. Given the current state of affairs between tribes and online operators, it seems like a more realistic path to legal California sports betting.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: