Looking for legal gambling in the Golden State? You have options when betting in California. California is home to 73 tribal casinos, 88 cardrooms, 6 horse racing tracks, 30 off-track betting facilities, and 21,000 lottery retail locations.
The state has a rich history of gambling that can be traced back to the Gold Rush era. California’s Constitution originally prohibited some forms of gambling activities in the state but ultimately left room for executive and legislative rebuttal.
Under the state constitution, the governor can make compacts with local Indian tribes allowing them to operate casinos. The California Constitution also grants the state legislature the authority to regulate horse racing, charitable bingo games, the California State Lottery, and charitable raffles.
All of these loopholes were exercised in the mid 80s to bring a major new industry into being. California gambling operations now employ over 20,000 people and have contributed over one hundred million dollars (pg. 21) to the state budget.
There are currently four primary forms of legalized gambling establishments in California:
- Card rooms
- Native American casinos
- Race tracks
- State lottery
Each category covers one or more forms of gambling (such as casinos offering slots and poker) and each establishment is governed by unique rules and regulations.
California has yet to legalize and regulate online single game sports betting. For now, the best bet for Californians wishing to wager on sports is through daily fantasy sports sites such as FanDuel and DraftKings.
California Sports Betting
Single game sports betting still remains unregulated in California. If you must scratch your sports betting itch in Cali, fantasy sports are your best bet.
Sen. Bill Dodd and Assemblyman Adam Gray introduced legislation in late June 2019 that would give California voters the opportunity to green light sports betting in the state. The legislative vehicle would be a constitutional amendment that voters could approve in 2020.
Previously-proposed sports betting laws have tried to expand the California Legislature’s ability to allow and regulate sports betting operations. This new proposed amendment would bypass the legislature and let sportsbook operations begin after approval.
The finer points of Dodd’s and Gray’s new legislation has yet to be laid out and the two want to hear from California’s varying gambling interest groups before such details are given.
The proposed amendment is currently known as ACA 16 and it will require a two-thirds majority in both California’s Senate and Assembly 180 days before the election.
In a statement, Bill Dodd said this:
“I look forward to working with stakeholders in a collaborative effort to help bring this out of the shadows. By legalizing sports wagering, we can avoid some of the problems associated with an underground market, such as fraud and tax evasion, while investing in problem gambling education.”
Online Sports Betting in California
As for the full array of online betting, Californians wait with bated breath. With online gambling regulations now occurring on a state-by-state, California’s massive population and economy represent the largest chunk of untapped market in the nation. Third largest state by size, California has more residents than any other state in the U.S.
The American Gambling Association estimates that online sports betting brings in $154 billion worth of wagers annually nationwide via offshore betting operations. California contribution to this figure is vast and there have been several legislative efforts to authorize, regulate and tax online betting in the state.
Assemblyman Adam Gray said it best in an interview with KCRA:
“The choice is not ‘should we have sports wagering or not have sports wagering.’ We do have sports wagering.”
A frequent proponent of gambling legislation, Gray continued:
“You could see tax revenue as high as a $100 million or $200 million a year to the state general fund if we authorize sports wagering.”
The Supreme Court’s overturning of PAPSA represents one less hurdle in making online betting and legal sports betting a reality in California.
With that being said, the state’s legislative climate for online betting reform is not as sunny as California’s weather. A report published prior to the PAPSA decision predicted California would legalize sports betting by 2023. More on these efforts below.
Political and market indicators are mixed when it comes to potential reform. On one hand, the state has a history with regulated gambling and the tribes within its borders are considered experts in implementing public safety and integrity provisions.
On the other hand, these established entities and operators frequently fail to come to a consensus on proposed gambling legislation. The state’s everlasting need for tax revenue factors heavily on the minds of state lawmakers and could ultimately drive the issue.
Fantasy Sports in the Golden State
Operators such as FanDuel.com and DraftKings.com operate by way of federal exemptions written into the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Beyond these exemptions, the UIGEA also gave states the authority to legalize and regulate online horse racing and greyhound betting.
States still have the option to ban fantasy sports operations within their boundaries although California has not done so. As such, Californians are allowed access to the nation’s safe and regulated fantasy sports markets.
All major fantasy sports sites allow California gamblers to draft fantasy teams and wager real cash money on virtual teams. The major fantasy sports sites operating in CA offer wagering on NFL, MLB, NBA, NHL, college basketball and college football.
Always on the crest of new technological waves, California was one of the first states to propose legislation to regulate daily fantasy sports back in 2015. These efforts have completely stalled out since this time (e.g. AB 1437), DFS operators have served the California market nonetheless for years.
There is no law that explicitly makes DFS operations legal in California, but neither is there a law against contests of skill. The legal teams of the nation’s major DFS operators have analyzed CA gambling code and determined it is safe to offer fantasy contests.
As for California’s regulatory efforts of DFS, AB 1437 survived committee hearings and an assembly vote but ultimately died in the Senate. For California to achieve full realization of tax revenues from DFS, these regulatory efforts must be continued.
Horse Racing Betting in CA
California is home to 6 major racetracks and roughly 30 off-track betting facilities. Off-track betting facilities, or OTBs, are brick-and-mortar operations that allow for betting on races held in-state and out-of-state via simulcasting agreements with other tracks.
Casinos and the occasional state fair may also operate OTBs. What’s more, Californians can also bet on horse races online and via mobile devices through sites such as TwinSpires, BetAmerica and TVG.
Horse racing has been a part of California’s makeup since 1933 when voters passed a constitutional amendment that allowed for the regulation of pari-mutuel horse-race gambling.
Also established in 1933 was the California Horse Racing Board (CHRB) which currently oversees all horse racing and wagering within the state. The CHRB’s mission is to, “ensure the integrity, viability and safety of the state’s horse racing industry,” and they do so by overseeing the, “wagering, breeding, physical safety and the promotion of horse racing.”
The power of the CHRB was recently expanded when the California State Legislature unanimously approved to give the regulatory agency the authority to suspend or move races without the requisite 10-day public notice period.
“We must take action now to protect horses and jockeys, ensuring safety is always paramount in California horse racing,” said the bill’s co-sponsor, Sen. Bill Dodd. “Because clearly, there is a problem here, and we can’t sit back and do nothing.”
Dodd was referring to the record number of horse deaths at Santa Anita race track during the 2019 season. When the CHRB asked Santa Anita to cancel its last scheduled races, the race track denied the request and continued the scheduled races. Under CHRB’s new authority, there would be legal recourse for such defiance.
California Card Rooms
California’s card rooms are some of the oldest legal gambling institutions in America. These days, larger cardrooms are not the norm. Most of California’s roughly 89 cardrooms are now smaller operations as publicly owned corporations are prohibited (pg. 4) from investing in card clubs.
Regulations of card rooms were historically a local affair and state regulation really took hold in the mid-80s. With the flow of information really taking off in this period, it made sense to crack down on criminal gambling activity on a statewide level. These efforts solidified in 1998 with the passage of Gambling Control Act.
- Taking reasonable actions to ensure that no ineligible, unqualified, disqualified, or unsuitable persons are associated with controlled gaming activities;
- Assessing and acting upon certain restricted transactions including ownership changes and lending arrangements;
- Taking reasonable actions to ensure that gambling activities take place only in suitable locations;
- Granting temporary/interim licenses, permits or approvals on appropriate terms and conditions;
- Developing and implementing regulations pursuant to the Gambling Control Act; and,
- Adjudicating recommendations concerning license denials or revocations, or disciplinary actions.
Tribal Conflicts with Proposed Sports Betting Legislation
Any future sports betting legislation will have navigated the California’s varying interest groups. As it stands, California’s tribes have the exclusive right to operate casinos and therefore any new sports betting or online gambling legislation would have to come terms with the 109 federally recognized tribes within California’s borders.
California Nations Indian Gaming Association Chairman Steve Stallings made it clear where his organization stands on the issue:
“California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games. Legalization of sports betting should not become a backdoor way to infringe upon exclusivity.”
Proposed sportsbook legislation would essentially have to be an expansion of the tribes’ existing operations to get the fast track in Sacramento. But who better than the California tribes, with almost 2 decades of modern gambling management and operations experience in the state, to implement the state’s first sportsbooks?
When it comes to online gambling, the tribes have been much more reluctant to embrace change. They have seen advances as direct competition to their brick-and-mortar operations. With heightened geo-location tracking coming online, California tribes with casinos will likely push for legal online and mobile options that can only be utilized when somehow tied with the existing physical casino.
Again, it cannot be overstated enough, no new legislation will pass without the cooperation of the California tribes that have relied on gambling for 19 years. A right-of-first refusal could also address the exclusivity issue and still leave room for the potential of future commercial operators.
One rising tension is between California’s tribes and card room owners. The tribes claim California card rooms are given more enforcement leeway in terms of the games they offer. In turn, the tribes say this is cutting into their operations and the exclusivity agreements found in the compacts they have signed with the state.
The feud between California’s tribes and cardrooms culminated in multiple tribes suing the state over what they claim are infringements of tribal exclusivity agreements.
CA Online Poker
Unfortunately, there is no regulated online poker in California at this time – but not for a lack of trying. Since 2017, bills seeking to allow internet poker have been an annual fixture in the state’s legislature. The vying interest of anti-gambling groups, commercial gambling entities, and the tribes have combined to stall all progress on these bills.
These efforts ceased in 2018 when, finally, no internet poker bills were introduced in the state legislature. Whether these efforts have ceased or evolved is a trickier question. Many believe the road to online poker in California will only come up after sports betting has found a rightful home in the state.
The California Lottery now has over 10 draw games and dozens of scratchers that it sells at over 21,000 locations across the state. California does not sell ticktes online at this time.
Established in 1984 by a ballot initiative that passed by 58%, the California Lottery was created for the sole purpose of providing supplemental dollars to public schools in the state.
By law, the CA Lottery is required to return 87% of the total annual revenues to public school systems. In the 2017 fiscal year, the CA lottery have $1.69 billion towards public education in the state. This was the eighteenth consecutive year that the lottery had generated over $1 billion dollars to the states school systems.