California might legalize sports betting, if Assemblymember Adam Gray introduced a constitutional amendment gains support in the state legislature. Adam Gray introduced a sports wagering bill to the California legislature last week.
Assemblymember Gray’s proposal is similar to bill signed into law in Mississippi and Connecticut recently. The bill only would take effect if federal laws on sports gambling change.
Across the nation, lawmakers are waiting for the outcome of New Jersey’s sports betting appeal before the United States Supreme Court. Last month, the USA’s highest court agreed to hear New Jersey’s appeal of a lawsuit brought by the major American sports associations in 2014.
New Jersey’s Sports Betting Case
New Jersey and the sports leagues file legal briefs with the Supreme Court in August. As early as October 2017, lawyers for both sides will argue before the nine justices. Once that happens, the Supreme Court will issue a ruling, likely by the end of the calendar year.
At stake is the future of the Professional and Amateur Sports Protection Act of 1992 (PASPA). PASPA made it illegal in 46 states to offer sports bets. Under PASPA, Nevada operates legal sportsbooks. Three other states — Oregon, Montana, and Delaware — offer legal sports lotteries. New Jersey is fighting for the right to allow legal sportsbooks and, if the court rules on behalf of New Jersey, the PASPA law would be struck down.
California Sports Betting Amendment
Adam Gray’s bill would come into effect only if the PASPA was no longer federal law. Recently, Assemblymember Gray praised the Supreme Court for taking the case. Gray, the chairman of the Assembly Governmental Organization Committee, stated, “I am pleased to see the US Supreme Court has shouldered the burden of bringing legal clarity to the issue of sports wagering and the rights of states under the United States Constitution.”
This is not the first time Adam Gray has shown an interest in gaming. In 2016, he introduced a daily fantasy sports bill. In 2017, Gray introduced a combined California online poker and DFS bill.
Neither of those measures gained enough support to become law, but Adam Gray (along with Reggie Jones-Sawyer and Mike Gatto) is one of the California lawmakers most interested in gaming laws at the present. If ever the long-awaited California online poker bill becomes law in the next few years, Adam Gray would likely to be a driving force.
Why Sportsbooks Should Be Regulated
When he introduced the bill, Adam Gray argued a pragmatic, common sense approach to gaming laws. He said, “Whether we like it or not, Californians are already betting on sports through illegal and often unscrupulous websites in foreign countries. It is time to bring this multibillion dollar industry out of the shadows.”
“We need to crack down on illegal and unregulated online gaming and replace it with a safe and responsible option which includes safeguards against compulsive and underage gambling, money laundering, and fraud.”
The potential brick-and-mortar sports betting industry would be boon for California tribal casinos and racetracks. Nevada has a population of 2.9 million people, while Las Vegas was the destination for 42.9 million tourists in 2016. That population and tourism trade generated $4.5 billion in sports gambling, along with $219 million in tax revenues for the state government.
Revenue Potential of California Sports Betting
California has the largest population in the United States, with 39.2 million people. The Golden State had 268 million tourist visits, including 17 million from foreign visitors. California currently has 144 land-based casinos or poker clubs, 11 racetracks, and 18 off-track betting facilities. With over 13 times the population and 6 times the tourist traffic as Nevada, the potential sports betting might be worth tens of billions of dollars — and between $1.5 billion to $2 billion in state revenues each year.
Whether California’s many gaming interests could get together on a sportsbook law is another matter. The 10-year campaign to legalize online poker in California has been contentious and frustrating, despite how lucrative such a law might be. The tribal casino interests are rivals of the racetracks. The tribal casinos and the private poker clubs are rivals, too, while the various tribes have been at odds over California’s potential online poker laws.
Adam Gray on Sportsbook Regulations
Adam Gray hopes his bill bridges the gaps, at least when it comes to sports betting. Gray said when he introduced the California sports betting bill, “All other gaming activities in California are subject to regulations that ensure the safety of consumers. Sports wagering should be treated no differently.”
California Online Sports Betting
It should be noted that online sports betting would remain illegal, if even land-based sports wagers were legal. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) states that any gambling activity which was rendered illegal over the phone lines due to the 1961 Wire Act would be illegal over the Internet under the UIGEA.
The 1961 Wire Act was explicit that sports betting over phone lines (usually interpreted as ‘across state lines’) would be illegal. Thus, online sports betting is illegal under all previous official interpretations of the UIGEA, even if sports betting were no longer banned under the PASPA.
