The world’s fifth-largest economy could potentially be growing much bigger next year, as today the State of California certified that a measure will appear on the midterm ballot to legalize sports betting statewide in November of 2022.
The measure is supported by a coalition of sports betting companies, including DraftKings, FanDuel, and BetMGM. DKNation is a partnership of DraftKings, Inc. and Vox Media.
The summary of the petition as it will appear on the ballot is as follows:
Legalizes online and mobile sports wagering, which currently is prohibited, for persons 21 years and older. Such wagering may be offered only by federally recognized Indian tribes and eligible businesses that contract with them. Individuals placing bets must be in California and not located on Indian lands. Imposes 10% tax on sports-wagering revenues and licensing fees. Directs tax and licensing revenues first to regulatory costs, then remainder to: 85% to homelessness programs; 15% to nonparticipating tribes. Specifies licensing, regulatory, consumer-protection, and betting-integrity standards for sports wagering.
The potential of the market size in the Golden State is as much as $3 billion, and the infamous initiative process in California that provides for direct democracy will require only a majority of votes in favor. Some other states have a higher threshold for law-by-vote, but the largest state in the union requires just 50% +1 to pass any legislation.
Just under one million signatures were required to reach the ballot, and the coalition turned in over 1.6 million. A somewhat-competing measure from Native American tribes, horse racing tracks, and local card rooms will also be voted on at the same time, but the proposal by the nationwide sports books was designed not to conflict so that both nationwide providers and local partners could offer mobile app-based betting to consumers.
We’ll keep an eye on this, but California would immediately become one of the largest legalized sports betting jurisdictions in the world. If passed the bill would take effect on January 1, 2023, barring and subsequent fights in court about implementation.