Why is LA so reluctant to legalize sports betting?November 10, 2020
The United States has had something of a complex history when it comes to sports betting. Many tight legislations were adopted during the 20th century, with mistrust and a historical attitude that associated sports betting with corruption in sport and gambling. Fixing and other scandals led to the 1992 Professional and Amateur Sports Protection Act which outlawed all sports betting except for in a handful of scenarios.
But in May 2018 things began to change after the US Supreme Court overturned the federal bill that banned the practice in a 6-3 decision which claimed that PASPA was unconstitutional as it infringed upon states’ rights. Experts estimate that the market has massive potential in size and for revenue. An industry research firm valued the market at up to $8.1bn in revenue terms by 2024, while the American Gaming Association estimated there was currently $150bn in the illegal sports betting market, suggesting this figure could be even larger.
Atlantic City, the gambling hub of New Jersey, was the first state to adopt the legislation. Since the ruling, 11 states have now legalised sports betting within the borders, with a further seven states having passed a law to make sports betting legal but pending a launch date.The case of Pennsylvania
One of the first states to pass a law authorizing sports betting, alongside New Jersey, was Pennsylvania. Launched officially in November 2018, online sports betting also became legalized in May 31 2019.
Since then, these legalized sportsbooks in Pennsylvania have reaped so many of the benefits of legalising the activity in the state. Figures from the Pennsylvania Gaming Control Board showed that in August 2020 there was bettors in the state wagered a record $365m on sporting events that month; up 121.5% on the $164.8m wagered in July of the same year — and an impressive 234.7% wagered around the same time the year before it. One of the most popular way to bet in the Keystone was through mobile sports betting, with 88% of bets being placed via the internet — wagered $321.6 via online sportsbooks and $43.4m at casino sportsbooks in-person. Land-based betting generated only $2.8m and online betting contributing $24.8m.
The top three brands that dominate the space include DraftKings, FanDuel and Rush Street — Penn National Gaming recently decided to get their own hand in the revenue pool with the launch of Barstool Sportsbook.But will L.A. follow suit?
As of June 2020, it didn’t look like it would be any time soon. Two years after the U.S. Supreme Court changed the legislation on sports betting, and with betting on sports legalised in two dozen other states, it would make sense if the state of California wanted to get in on the action. But political debates between rival gambling interests, including the Native American tribes who operate more than 60 casinos in the area, have kept things from going ahead. Senator Bill Dodd announced in June that there wasn’t enough time to finish the complicated negotiations that would allow them to get a sports betting measure on the November ballot — which means that the bill will be left for another year.
“Given the deadlines for getting a measure on the November ballot and the impact of COVID-19 on the public’s ability to weigh in, we were not able to get the bill across the finish line this year,” Sentaor Dodd said in a statement. “It remains important that we lift this widespread practice out of the shadows to make it safer and to generate money for the people of California.”
Senator Dodd also noted that his legalization proposal could generate up to $700 million a year in tax revenue for the state. Chris Gove, a gambling industry analyst said that he wasn’t surprised around the deadlock in California. “The bottom line in California is that too many stakeholders in the state’s gambling industry have too many existing high-stakes conflicts to allow sports betting to move forward,” Grove said. “In many ways, sports betting is a footnote for tribal and commercial gambling interests in the larger conversation around gambling in California.”What’s next?
Well, it seems there’s been some movement. Senator Dodd and Assemblyman Adam Gray restarted the legislation push in July, and are trying yet again to put the question up on the November ballot. It seems that COVID-19 related lockdowns have actually served to boost mobile sports betting across the states that allow it; a rise in figures, and revenue, has encouraged many of the key players in the California debate to try and move things forward and take advantage of what could be a big profit.
Whether it’s on this ballot or the next, it’s likely that the popularity of sports betting across the country — and indeed, around the world — will see the state legalising the activity over the next several years