August 27, 2021
BY BRIAN HEWS
Second in a series.
A coalition of California cities has submitted language to the California AG’s office for a ballot initiative they are proposing for the November 2022 statewide election.
The measure is known as the California Sports Wagering and Consumer Protection Act, and, if passed by voters, funds collected would appropriated by the Legislature to deal with homelessness, affordable housing, public education, and mental health.
The initiative would legalize sports wagering in California. Economic surveys estimate illegal sports gambling generates over $10 billion in revenue entirely outside the regulatory system.
The Act would allow betting on amateur, collegiate and professional sports while prohibiting betting on high school sports and on potential injuries.
A statement from Cities For Responsible Sports Betting declared, “this illegal enterprise contributes to criminal activity and leaves bettors without legal protection, accruing all its benefits to out-of-state and criminal enterprises while Californians pay the associated costs.
“The California Sports Wagering and Consumer Protection Act attacks black-market gaming activity, increases public safety, protects consumers from unscrupulous operators, and raises substantial revenue to fund services like improving COVID-19 relief, homelessness, mental health, and public education.”
Chris Grove, a managing director for Eilers and Krejcik, a firm that advises lawmakers said, “California is easily the largest prize in the U.S. sports betting market, legalization could bring California some $1 billion in gross annual revenue without online betting and $3 billion if the state expanded it to include online wagering.”
Gardena Mayor Tasha Cerda said, “Throughout California, cities like mine are at their breaking point coping with social ills like homelessness, housing shortages, and crime, which have been supercharged by the COVID pandemic’s health and economic damage, let’s bring sports wagering out of the shadows, regulate the industry, and use a portion of the proceeds to benefit all Californians. Right now, the illegal and offshore operators reap those rewards and they’re bleeding us dry.”
Limiting sports wagering, those that will be allowed to have operations at their facilities only include highly regulated entities that are experienced in gaming operations like state & federally recognized tribes, state-licensed gaming establishments, and professional sports leagues.
The initiative also replaces unregulated and untaxed operators with a safe and legal online and mobile sports wagering market.
The measure guarantees strong oversight of monies collected requiring sports wagering operators to conduct annual audits and publicly report their findings to state regulators.
“California residents continue to suffer impacts from the pandemic,” said San Jose City Council Member Raul Peralez. “We built strict accountability into the measure. We need to be able to move forward on what voters have asked for and will demand from us.”
The initiative also establishes strong enforcement mechanisms to keep sports wagering away from underage Californians and sets aside funding for problem gambling programs.
“A legal sports wagering market will bring protections for consumers and children,” said Mayor Cerda. “This measure confines sports wagering to highly regulated and safe facilities requires age verification for digital wagering, and outlaws advertising or marketing of sports wagering to children and young adults.”
State elections law requires the proponents to gather 997,139 valid signatures to qualify the California Sports Wagering and Consumer Protection Act and must do so by April 2022 in order to appear on the November 2022 general election ballot.
The proposal ties sports betting licenses to land-based operations.
Along with every tribal casino, cardroom and horse racing track, California’s 19 professional sports teams would also get licenses:
NFL- 49ers, Chargers, Rams
NBA- Clippers, Kings, Lakers, Warriors
NHL- Ducks, Kings, Sharks
MLB- Angels, Athletics, Dodgers, Giants, Padres
MLS- Earthquakes, Galaxy, LA FC
WNBA- Sparks
All sports wagering platforms must pay a bi-annual license fee of $1 million as well as a one-time licensing fee of $5 million.
Revenue would be taxed at 25% with another 1% due annually put toward problem gambling programs.
