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California Prepares For Federal Sports Betting Reform

Proposed Amendment To Constitution Comes Forward


In the wake of the U.S. Supreme Court indicating that it will hear New Jersey’s appeal against the Professional and Amateur Sports Protection Act of 1992, the state of California is now considering legislation to ready itself for a change to federal law.

The measure comes from Assemblymember Adam Gray, the Democratic Chair of the Assembly Governmental Organization Committee. Gray was the man leading the state’s online poker efforts in recent years, but those efforts weren’t able to gain enough traction.

While online poker in California could be worth several hundred million annually, the illegal sports betting market in America has some $150 billion in wagers each year, according to the American Gaming Association. California is the nation’s most populous state. In Nevada, the only state with single-game sports betting as allowed under PASPA, a record $4.5 billion was bet at the state’s nearly 200 regulated sports books last year, with revenue from those bets of about $220 million.

California’s tribal gambling market is worth $4 billion a year, making it the second largest casino market in the nation behind Nevada.

The Supreme Court could rule on PASPA sometime in the early part of next year, which could pave the way for Congress passing a new law to establish a regulatory structure. Forty states have casinos, whether tribal or commercial or a combination of both.

Gray’s proposal, ACA 18, would alter the California Constitution, subject to legislative and voter approval.

“I am pleased to see the U.S. 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,” Gray said in a statement.

“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. All other gaming activities in California are subject to regulations that ensure the safety of consumers. Sports wagering should be treated no differently."

According to a recent study for the AGA conducted by Greenberg Quinlan Rosner Research, 55 percent of Americans support legalization on the federal level. Only 35 percent oppose. Ten percent are undecided on the issue. About 20 percent of Americans bet on sports in the last year.

Last month, the National Indian Gaming Association announced that it was joining the AGA’s Coalition on Sports Betting to reform the antiquated law.

“We have a window of opportunity to get this done and the National Indian Gaming Association is critical to making it happen,” AGA CEO Geoff Freeman said in a statement. “Tribal engagement will help to move the needle forward and as the industry further unites, we will be able to end the failing ban on sports betting and allow our industry to grow.”

The commercial casino industry and the tribal casino industry are worth more than $40 billion and $30 billion per year, respectively.