As sportsbook operators report earnings for the first quarter of 2021, Super Bowl Sunday is the biggest sports betting day each year as it plays a big role in the multi-billion dollar industry. The Super Bowl took place in Inglewood, California, but sports betting is still illegal in the Golden State.
All Eyes Are On California to Have Sports Betting on November Ballot
Despite being home to some of the most professional and collegiate sports teams, California has yet to introduce sports betting to its residents. All eyes will be on California as lawmakers who support the initiative to have it on the November ballot.
The next three Super Bowls that will take place in Arizona, Nevada, and Louisiana all offer both retail and mobile sports betting. Louisiana offers sports betting in 55 of the 64 parishes across the state.
Just to put the numbers into perspective, the sports betting industry is expanding every year as more states look to enter the industry. Sportsbook operators across the country accepted approximately $60 billion in wagers, which generated $4.3 billion in revenue.
California has the potential to be a lucrative market in the industry and could surpass New York’s record-breaking start of reaching a handle of more than $1 billion in just 22 days. California is the most populous state in the United States as it is home to over 39.2 million people, which is nearly double when comparing the numbers to the Empire State.
According to a news media outlet, four 2022 ballot propositions and initiatives are being pushed that would allow the operation to become legal in the state. However, the potential sports betting bills that back sportsbook operators have faced some opposition from three tribes in the state.
The three tribes that are backing the blockade are The San Manuel Band of Mission Indians, The Rincon Band of Luisueño Indians, and the Wilton Rancheria. A release noted;
“The tribes are financially committed to defeating the operators and have established an initial campaign budget of $100 million.”
One of the propositions that made it to the ballot would permit sports betting to only take place on tribal lands. Sportsbooks are against it as it would give the tribes a monopolistic hold in potentially the most lucrative market in the industry.
The tribal committee criticized that the system lacks in-person age verification. Griffin Finan, vice president of government affairs for DraftKings, stated that the initiative would allow operators to use technology aimed at preventing minors from having access or the ability to place wagers through the sportsbook.
Sportsbook Operators Response to Operate in California
On the other hand, sports betting providers pledged the same amount of money of $100 million as they launched their initiative last year. The campaign is progressing at a solid pace as they collected a quarter of the one million signatures needed to be on the ballot in November.
This is backed by seven sportsbooks that include Bally’s, BetMGM, DraftKings, Fanatics Betting & Gaming, FanDuel, Penn National/Barstool Sportsbook, and Wynn. If the initiative makes it to the ballot in November and is approved by the voters, the mobile sports betting tax rate would be slated at 10 percent.
Chris Grove, a sports betting industry investor and partner in consulting firm Eilers & Krejcik Gaming, stated that California could generate up to $3 billion in annual revenue if mobile sports betting is implemented.
With the hometown Los Angeles Rams winning the Super Bowl, California missed on a huge opportunity to generate massive revenue. Full mobile sports betting could have generated $300-$400 million to the state’s sports betting handle if the operation was legal.
Hypothetically, if sportsbooks maintained a seven percent hold and with a 10 percent tax rate, it would have generated $25 million in gross revenue. That would translate to $2.5 million in state taxes.