On Tuesday, California moved closer to legalizing sports betting with the Senate Governmental Organization Committee passing a bill 9-3 along party lines to change the state constitution to allow such betting at select locations across the state.
SCA 6 and legalized sports betting
Senate Constitutional Amendment 6, authored by Senator Bill Dodd (D-Napa) and Assemblyman Adam Gray (D-Merced), would legalize sports betting at all Indian casinos on tribal lands and at the four racetracks. Bets would be placed either at the casino itself or through the internet, with every bet being taxed 10% for casino bets and 15% for online bets. The whole system would also be closely monitored for any wrongdoing, such as people under the age of 21 placing bets. Around 1% of all revenue would also go towards fighting problem gambling and gambling addiction.
SCA 6, also referred to as the California Sports Wagering and Consumer Protection Act, was written by Senator Dodd and Assemblyman Gray primarily as a way to combat California’s $54.3 billion budget deficit caused by the coronavirus and the following economic downturn. However, both Dodd and Gray have also been fighting to allow sports betting in the state for some time. Their previous attempt, ACA 16, fizzled out after a lukewarm reception both late last year and earlier this year.
But SCA 6, which was originally introduced in June of 2019, was amended in late May to switch the reasoning for passage from wanting more jobs and keeping tourists from going to Nevada to helping fill the budget gap. The new reasoning, as well as one of the few solutions being offered during the Committee of the Whole meeting last week, spurred changes and boosted the bills popularity. The estimated $200 million to $500 million a year in revenue, with some sources estimating as high as $2 billion, has been widely touted by supporters as something California needs.
“A duty to bring illegal sports wagering out of the shadows”
“Given all the challenges that have arisen from the coronavirus crisis, some might argue that is an unlikely time for the Legislature to consider a gambling issue. But the revenue losses suffered by schools, cities, the state and other local governments are real, immediate and severe,” noted the lawmakers. “By acting now to end the black market in sports gambling, California can generate desperately needed revenues simply by regulating an enterprise that is already taking place.”
ACA 6 has received the support of many groups, including the MLB, NBA, NFL, NHL, the PGA, fantasy sports industry leaders FanDuel and DraftKings and even some law enforcement groups.
SCA 6 faces significant opposition
However, opposition to the bill led by the GOP has also received many allies, most notably by a minority of Indian tribes. Many tribes had been trying to get their own measure put on the ballot that didn’t include mobile gaming and other sticking points. Tribes are worried that online sports betting can’t be regulated properly, and that, because of the lowered number of gamblers and tourists following the coronavirus epidemic and economic downturn, there will be much less projected revenue.
No tribal representatives were called in to testify on Tuesday, with some Capitol employees later stating that it was likely because of the opposition of some tribes, despite the majority of tribes wanting sports betting. However, both Gray and Dodd did state that negotiations with tribes was ongoing.
Republican lawmakers, while concerned about an increase in crime and unanswered questions about online sports betting, also noted that there are concerns on how the funds will be used and what SCA 6 means for tribes.
“This is literally showered in a grey zone of misinformation, false narratives and false choices,” said Senator Andreas Borgeas (R-Fresno). “My concern is that the tribes are going to take this to court and this will be stuck in litigation for a significant period of time.”