California Sports Betting Stands To Bring The State Big Bucks

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Could sports betting revenue in California bring in too much money? 

Yes, according to a legislative analysis sent to the attorney general’s office on Friday. 

The California Constitution limits how much tax revenues the state can spend each year, with exceptions like spending on infrastructure and emergencies. This measure would increase tax collections by up to the mid-hundreds of millions of dollars annually and, as a result, could increase the chances that the state would collect revenues in excess of the limit,” Gabriel Petek, a legislative analyst working for the state legislature, wrote in a letter to Attorney General Rob Bonta.

The measure at issue is one put forward by several California cities in an effort to combat homelessness and mental health issues.  It is still in the approval process and is entirely separate from a referendum favored by the state’s tribes that is slated to be on the ballot in November 2022

How Much Money Would Be Raised In Sports Betting, Where Would It Go?

The analysis is part of the review process put forward by the attorney general’s office. Backers of the city initiative would tax revenue at a 15 percent rate, as well as a 1 percent fee going toward gambling addiction programs. 

The analyst’s report makes clear sports betting has the potential to add hundreds of millions of dollars to the state’s coffers. 

“The magnitude of the increase in state revenues is uncertain, but could reach the mid-hundreds of millions of dollars annually,” the report said. 

Under state law any revenue that goes above and beyond what the prescribed limit could only go toward taxpayer rebates of “school payments.”

Multiple Bites At Sports Betting Apple

The sports betting initiative already on the ballot allows for sports betting at the tribal casinos as well as certain horse tracks. It does not allow online sports betting.

The cities initiative, which would need to collect nearly 1 million signatures once the AG’s office signs off on it — would allow for sports betting at both private and tribal locations. It does allow mobile sports betting. 

“The Cities Gaming Initiative opens sports wagering to every entity licensed to conduct gaming in California including Indian tribes and to all professional sports teams seeking to conduct sports wagering directly or via the internet,” Jimmy Gutierrez, general counsel of the authority, told the Las Vegas Review-Journal in August. 

The attorney general’s office expects to have a decision on whether or not the cities proposal can go forward with signature-gathering later this fall. If it is given the green light to proceed, supporters need to gather the signatures by next summer. 

Under the terms of the cities’ initiative, if both it and the tribal measure were passed by the voters, the one garnering more “yes” votes would be declared the ultimate winner. 

About the Author

Mary M. Shaffrey

Mary Shaffrey is an award-winning journalist who co-authored "The Complete Idiot's Guide to Government." She has spent more than 20 years covering government, both at the state and federal level. As a fan of the Baltimore Orioles and the Providence College Friars she feels cursed. Luckily she is a hockey mom too so her spirits aren't totally shot.

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