California Casino Signs Partnership with Sports Betting App

Just about everyone in North America knows that sports betting in California has yet to be legalized, so this latest news will incite plenty of furrowed brows and confused faces: A company that operates multiple California casinos has signed a partnership with a mobile sports betting app known as Sparket.

Naturally, this raises the question: What gives?

Is this a preemptive agreement in anticipation of California sports betting finally being legalized? Is it the product of a loophole? Does this partnership with a mobile sports betting app suggest anything about the future of gambling in California?

Let's go ahead and parse the details.

Details of Mobile Sports Betting App Partnership with California Casinos

Sparket operates a software called Social Betwork, which its website describes as a "revolutionary live event wagering software to help operating partners grow revenue and reach." In a news release reviewed by OSB, Sparket broke down the details of their partnership with the 29 Palms Band of Mission Indians:

"Sparket has inked a new partnership deal to license its Social Betwork™ software to the 29 Palms of Mission Indians. The software will be white-labeled to offer promotional free-to-play sports and live event wagering via Sparket's proprietary pool wagering system. Users can participate online for their upcoming March college basketball tournament contest and win real prizes at the Tortoise Rock and Spotlight 29 casino properties in Southern California. The respective casinos plan to run promotions throughout the year using the Sparket technology. In addition to its casino properties, Spotlight 29 is an active community supporter with local non-profits and recently became a founding partner of the 10,000 seat Acrisure Arena."

This announcement is ultra-specific yet doesn't clear up how it's even possible. Sparket, after all, is not a fake sports betting app. It pays out real money.

At first glance, this suggests something's off. Both California sports betting bills failed to pass this past November. This effectively prevents the state from rolling out any legal gambling services prior to the 2024 general selections.

So, again, we ask: What gives?

It Turns Out There Is a California Sports Betting Loophole

Though sports betting in California remains illegal, pari-mutuel wagering is allowed. 

For anyone unfamiliar with the term, pari-mutuel betting basically translates to "betting among ourselves" or "pool betting." The experts over at LaurelPark.com have described it best: "It is similar to a stock transaction," they write. "When you buy a $2.00 ticket on a horse you are, in effect, buying one share in the horse's performance in the race."

You might be wondering why California allows pari-mutuel wagering but not generalized sports betting. It's a fair question. Mostly, it boils down to interpretations of chance. Fixed odds betting (aka typical sports gambling) is considered a game of luck by many states; pari-mutuel betting has been deemed a game of skill because of the payout-pool structure.

With all this in mind, California only allows pari-mutuel betting for horse races. And yet, the Sparket sports betting app mentions that the Tortoise Rock and Spotlight 29 casinos are already running promos for the March Madness tournament.

How is this possible? Because those "betting' programs aren't paying out cash. As the press release notes, participants can "win real prizes." They're not referring to a payout determined by odds. These could instead be fixed cash prizes or rewards that take the form of experiences (trips, gift cards, etc.)

Why Would a Sports Betting App Partner with a Casino That Can't Offer Real Sports Gambling?

This is a common question that pops up whenever a sports betting app or company strikes partnerships in states that don't offer legal wagering. Upon first consideration, there doesn't seem to be much of a benefit. However, further reflection yields an explanation.

By entering a partnership with the 29 Palms Band of Mission Indians now, Sparket will theoretically have the inside track on the California sports betting market if and when gambling is legalized. That's a pretty big deal.

Remember: California is considered the most lucrative sports betting market in the United States, even though it has yet to legalize wagering. By gaining an early entry, Sparket sidesteps what will be fiercer competition later on, when many of the top online sportsbooks for the United States look to enter the mix and join forces with local casinos. As many may recall, such partnerships were a stipulation from one of this past November's sports betting bill (Proposition 27).

Indeed, Sparket may not rake in money while helping 29 Palms offer "free-to-play" options. But it's a worthwhile gamble considering California's prospective market size. They have the largest population (40.2 million) by nearly 10 million people. Sparket stands to make a ton of money if and when they're able to process live wagers on real bets. In the meantime, as a fairly new sports betting app, they also gain a ton of exposure to a client base that may not currently know much about their services.

Now, whether this partnership says anything meaningful about the future of legal sports in California remains to be seen. It probably doesn't. The timeline for California sports betting has not suddenly accelerated. If anything, the agreement between 29 Palms and the Sparket sports betting app reinforces what we've known all along: Legal Sports betting will come to California eventually. It's just a matter of when.

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: