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Welcome to the first monthly edition of the Steam Report! Today, we'll focus on the recent news coming out of the Golden State. (Spoiler: there's beef)
Today's in-depth story is:
🇺🇸 Sports Betting in California Moves Forward?
This, and more, in just 5 minutes to read.
-- Dylan
POP QUIZ ❓
Q: How much money was spent on the 2022 sports betting legalization campaign in California?
🇺🇸 Sports Betting in California Moves Forward?
In TSR#12 we updated you on the progress being made in Texas on the front of sports betting legalization in the form of a new house bill (HJR 134), so it's only right we take some time to break down the current state of affairs in the other behemoth state that has so far resisted attempts to legalize, California.
Recent Developments
The big news this month comes from San Diego, where the Sports Betting Alliance Tribal Advisory Board met on April 1st at the Indian Gaming Tradeshow & Convention. This board, which includes representatives from major operators like DraftKings, FanDuel, BetMGM, and Fanatics, along with six tribal members, discussed a potential framework for legalizing sports betting under tribal control.
According to Legal Sports Report, the early framework would have "the tribes form a single statewide entity that would hold all licenses and maintain ownership of the online sports betting market." The sportsbooks would pay guaranteed revenue shares to each tribe, with additional performance-based payments.
Tribal Pushback
Not so fast, though. After some media outlets reported that a deal had been reached, tribal organizations pushed back hard. The California Nations Indian Gaming Association and Tribal Alliance of Sovereign Indian Nations issued a joint statement accusing the Sports Betting Alliance of a breach of trust by inviting media to what was supposed to be a private discussion.
A tribal spokesman clarified: "While the meeting was productive in some ways, the suggestion that an agreement had been reached between tribes and commercial operators is simply false."
FanDuel's Big Bet on California
FanDuel continues to bet heavily on California eventually legalizing sports betting. The company has been wooing investors with projections that the US sports betting market will reach $63 billion by 2030 – a number that assumes both California and Texas will legalize betting in the coming years. It also was one of the four US sportsbook to spend big on a 2022 ad campaign in support of legal sports betting. Inevitably we’ll see FanDuel along with DraftKings, BetMGM, and Fanatics play a big role in any future pushes.
What's Next?
If enough signatures can be gathered for another ballot initiative, we could see another vote as early as 2026. The last attempt in 2022 (Proposition 27) was soundly defeated with only 16% support after tribal groups strongly opposed it.
The major challenge remains finding a framework that satisfies both commercial operators and tribal interests. For the sportsbooks, giving tribes significant control and guaranteed revenue might be the price of entry to California's potentially massive market. For tribes, maintaining their gaming sovereignty while capturing the benefits of online sports betting is the primary concern.
Looking to the Future
There's still a lot of work to be done to reach consensus among tribal groups, and then to convince voters who previously rejected legalization by a wide margin.
As Axios San Francisco noted, "If sports betting becomes legal in California, it'd immediately become the top market in the country." The potential is enormous – but so are the hurdles.
That's all for this update. Stay tuned for more developments in this ongoing saga.
TRIVIA ANSWER
A: Over $400 million — the most expensive ballot battle in state history.
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Written by
Co-founder of Pinnacle Odds Dropper and Editor of The Steam Report - a popular weekly advantage betting newsletter
