California Sports Betting: When Will It Be Legalized?

by Ted Dahlstrom (TedD) Last Updated 2024-08-27T19:43:02

California is the white whale of the sports betting industry. The term “white whale,” taken from the famous novel Moby Dick, has been used for decades to describe something that is desired but continually out of reach. The metaphor certainly fits here because all the major sportsbooks have dreamed of operating in California and have placed the state at the center of their expansion strategies, yet legalized sports betting has remained stubbornly out of reach.

Could 2024 be the year that mobile sportsbooks finally capture their white whale? Will sports betting finally become legal in California? The answer is no, as an initiative to legalize sports betting was soundly defeated in November 2022 and no subsequent initiative has qualified for the ballot. But we won’t let that stop us from speculating about the future of sports betting in the state, including the potential for California sports betting sites to emerge once legislation is passed.

Let RotoGrinders be your Ishmael as we discuss the current status of sports betting and DFS in California, what has (and hasn’t) happened thus far, what could happen in 2024 and beyond, and which sportsbooks want to come to California (hint: all of them). We will also go over the sports teams in the state and wrap up with a very special FAQ. Let’s get started.

California DFS Prop Betting Sites

While sports betting may not be legal in California, sports fans can still play on their favorite daily fantasy sports sites like PrizePicks, Underdog Fantasy, and Betr Picks. There are also new, emerging DFS prop sites available in California every day. Additionally, future California betting sites may offer features such as market coverage, bonuses, and user experience reviews for sports bettors in the state.

If you’re looking for traditional daily fantasy sports, you can sign up at FanDuel using the FanDuel DFS promo code.

Best Betting Promo Codes in California

Though sports betting isn’t legal in California yet, you can claim promo codes from the top DFS operators. Even better, if you’re a college sports fan, you can use these sites to pick props for college football and college basketball.

You can also get exclusive DFS and sports betting tips, analysis, and tools for all of these sites and more by subscribing to RotoGrinders Premium content!

Other Alternatives to California Sports Betting

If DFS isn’t you’re thing and you want something more similar to actual sports betting, consider signing up for these social sportsbooks in California:

Sports Betting in California

Sports betting is not legal in the state, nor has it ever been. California has limited legal gambling options for such a large and populous state. There is a state lottery and four horse tracks, but that’s pretty much it—all the gambling in the state centers around the Native American tribes and their dozens of casinos. Over 70 tribal casinos are operating in the state, most of which offer table games and slot machines but none of which offer sports betting. In fact, California is the biggest state in the country for tribal gaming revenue (over $9 billion wagered annually), a fact that is not lost on the tribes or their supporters in the legislature.

Since California is the most populous state in the country, it is obviously the biggest state without legal sports betting. Mobile sports betting coming to New York (8.3 million) was big, but mobile sports betting in California (39.1 million) would be HUGE. It’s not an exaggeration to say that billions of dollars in revenue for both the state and the sportsbooks are on the line.

Current Political Landscape

Sports betting has been discussed for many years in CA, but the powerful tribes have successfully lobbied the state legislature not to expand gambling, including sports betting. Bills in the legislature have been introduced but haven’t gained much traction. The influence of the tribes combined with historical resistance in the legislature to expand gambling has resulted in a stasis that shows no signs of changing.

Enter the initiative process. California is famous for its initiatives, a citizen-driven movement that lets people vote on policy changes usually reserved for the state legislature. Initiatives are popular in many states, mainly in the West, and special interest groups often use them to advance a policy goal stymied in the legislature.

After failing to garner support in the legislature, it was widely expected that the biggest sportsbooks would attempt to legalize sports betting through an initiative, and in 2022 that expectation became a reality when Proposition (Prop) 27 qualified for the November ballot.  

Enter the initiative process. California is famous for its initiatives, a citizen-driven movement that lets people vote on policy changes usually reserved for the state legislature. Initiatives are popular in many states, mainly in the West, and special interest groups often use them to advance a policy goal stymied in the legislature.

After failing to garner support in the legislature, it was widely expected that the biggest sportsbooks would attempt to legalize sports betting through an initiative, and in 2022 that expectation became a reality when Proposition (Prop) 27 qualified for the November ballot. This online sports betting measure faced significant opposition from tribal casinos and did not pass.

A similar process is expected to be undergone in 2024. The Pala Band of Mission Indians have expressed its intention to file an online sports betting initiative. The Pala Band of Mission Indians have a history of being aggressive in online gaming as they spent around $3 million to oppose Proposition 27, which was backed by commercial gaming operators.

Update: October 2023

In October 2023, a group connected to the Pala Band filed two initiatives with the state to give tribes full control of sports betting in California. The timing is curious because other tribes and the state tribal trade association have all said they were not consulted about the initiative before it was filed. If the initiative sponsors can get enough signatures, the initiative(s) will be on the ballot sometime in 2024. Stay tuned as we continue to update you on the latest news out of CA.

Update #2: November 2023

The California Nations Indian Gaming Association, a trade group representing the largest tribes in the state, came out in fierce opposition to the initiatives proposed by the aforementioned group. It remains odd that the initiative sponsors want to pursue an initiative so opposed by the very groups it would affect. Either way, this initiative is dead on arrival.

Update #3: January 2024

The initiative does not have enough support to make it to the ballot in 2024 and will not qualify for a vote of the people this year. Efforts to legalize sports betting in CA are all but dead for the year. Maybe 2025 will bring better luck for proponents of sports betting.

California Prop 26 and Prop 27

Note: As you are probably aware, both Prop 26 and Prop 27 were rejected by voters in November 2022. We are leaving this content in the page because it is useful information and future initiatives will likely contain much of the same language and content that were in the 2022 initiatives.

This is where things get complicated. Not one but two initiatives related to sports betting qualified for the November 2022 ballot, which means the voters decided whether to legalize sports betting in California. The two initiatives relate to sports betting, but they are very different. Let’s break them both down, starting with Prop 26.

California Prop 26

Prop 26 would have legalized sports betting but would have limited it to retail wagering at the existing tribal casinos in the state along with the state’s four horse tracks. Under Prop 26, sports betting would be retail-only, a massive bummer for bettors because over 80% of wagers nationwide are made on smartphones or computers.

The tribes support Prop 26, but they do not see sports betting as a huge moneymaker. Rather, they seek to consolidate gambling in the state and shut out outside operators. Casino gaming is far more profitable than sports betting, so this is more about keeping others out than gaining revenue from sports betting. We’ve seen this play out in a few states where the tribes control sports betting, including Maine, North Carolina, Washington state, and Wisconsin. This strategy does not result in significant revenue for the state, but it does allow tribes to maximize their revenue streams to provide for their members.

Where the Revenue From Prop 26 Would Have Gone

Most of the revenue would go to the state’s tribes, which would most likely virtually keep all the revenue generated from retail sports betting at their casinos. Each tribal compact would need to be re-negotiated with the state to include sports betting if Prop 26 were to pass, but the revenue split wasn’t expected to change. The four horse tracks would have their retail sports betting revenue taxed at 10%, and that money would be split between responsible gambling initiatives and the state general fund.

Supporters of Prop 26

The state’s tribes were supportive of Prop 26, which doesn’t come as a surprise. The surprise is that not all of them were on board. Some tribes that do not operate casinos supported Prop 27 because a percentage of the tax revenue from that initiative would go to their tribes. The state Democratic party was neutral on Prop 26, which is significant because Democrats control the legislature and all statewide offices. The Democrats’ neutrality on the issue is a win for the tribes and is due in no small part to the sizable campaign contributions they made to Democratic lawmakers.

Opponents of Prop 26

The state’s card room operators opposed Prop 26 because it would further consolidate the tribe’s hold on gambling in the state. Card rooms offer a few card games like poker and blackjack but do not have slot machines or dice games, which severely limits their potential revenue. Their influence may not be significant, but card rooms employ many people in smaller communities throughout the state, so their opposition carries some weight.

Not surprisingly, the major sportsbooks also opposed Prop 26. Allowing sports betting to be solely offered by the tribes would be a devastating development to the sportsbooks, many of which have staked their futures on the legalization of sports betting in California. If you are skeptical about that, consider Fantatics Sportsbook, a sportsbook that doesn’t even exist yet, committed up to $100 million to help pass Prop 27. It is not hyperbole to say that the future of sports betting as an industry was tied to California and Prop 27. So, yeah, they opposed Prop 26.

California Prop 27

While Prop 26 limits sports betting to tribal casinos, Prop 27 would have fully legalized mobile sports wagering throughout the state. That part is true, but there’s a catch. The initiative is over 60 pages long, and one of the buried details reveals that, in order to qualify for a coveted license, a sportsbook must operate in 10 or more states, which would have limited the possible sportsbooks entering the California market to the following:

• BetMGM
• Caesars Sportsbook
• FanDuel
• DraftKings
• PointsBet
• BetRivers

That’s it. Splitting up the California market six ways is a dream come true for the six lucky sportsbooks, but it is a pretty raw deal for everyone else who is left out. But if you pay the bills, you get to make the rules, and the above sportsbooks bankrolled Prop 27, so they unsurprisingly snuck in a provision that grants them exclusive access to the market (for now).

It won’t be cheap to enter the California market. Under Prop 27, sportsbooks would have pay an eye-watering $100 million license fee and a $10 million renewal fee every five years. On top of that, they would pay a reasonable 10 percent tax rate. Interestingly, tribes can also open their own branded sportsbook as a part of the initiative, if they pay a $10 million license fee. We’ve seen tribes in other states roll out their own branded sportsbooks, with limited success. Of course, those other states aren’t California.

Where the Revenue From Prop 27 Would Have Gone

The tax revenue generated from Prop 27 would eventually add up to billions of dollars for the state. Prop 27 directs 85% of the taxes from sports betting to go toward funding mental health and homelessness initiatives, a worthy use of public funds that has led initiative backers to call Prop 27 the “California Solutions for Homelessness and Mental Health Act.” The other 15% would go to the tribes without casinos, which is why, as mentioned, those tribes supported Prop 27 and oppose Prop 26.

Supporters of Prop 27

Not surprisingly, the biggest sportsbooks were the biggest supporters of Prop 27, putting hundreds of millions of dollars into efforts to pass the initiative. Prop 27 was the costliest initiative in state history, which is saying something. Up to $300 million was spent trying to convince people to vote for or against it.

Opponents of Prop 27

Even though Prop 27 requires sportsbook operators to partner with a tribe to qualify for a license, the vast majority of the tribes in the state are vehemently opposed to the initiative. They see it as something close to an existential threat to their sovereignty, partially because they believe they have exclusive rights to gambling in the state. Another reason is if people can bet on sports from their couch, they may be less likely to get in their car and venture to a casino to gamble. A third reason is the tribes believe the passage of Prop 27 could eventually lead to a further expansion of online gambling that would include casino gaming, which could put the tribal casinos out of business.

The tribes and their allied partners put up a serious fight against Prop 27, pledging up to $100 million to defeat the initiative while also spending big to promote their own Prop 26 initiative. The state Democratic party formally opposed Prop 27, aligning with the tribes in their fight against the big, out-of-state mobile sportsbook operators. This is a big deal because many other organizations like labor unions and progressive nonprofits take their lead from the Democrats and opposed Prop 27 in solidarity with the party.

Sportsbooks Potentially Coming to California

Every sportsbook wants to be in California, but not all of them will end up in the state. This is because of the aforementioned provision in the initiative that required a sportsbook to be operational in 10 or more states in order to qualify for a license to operate in California. This is a sneaky way for the big sportsbooks to keep the little guys out. Whenever sports betting comes to CA, we expect the following sportsbooks to be the first ones to launch in California:

• BetMGM
• Caesars
• FanDuel
• DraftKings
• PointsBet
• BetRivers

Prop 27 required a sportsbook to partner with a tribe in order to qualify for a license. With over 100 tribes in the state, all the sportsbooks should be able to easily find a partner. And the $100 million license fee is steep, but with 23 million people in the state over 21, the fee is a small price to pay for access to the biggest market in the country. The biggest hurdle for sportsbooks to overcome is, by design, the 10-state requirement.

California Professional Sports Teams

California is home to a whopping 22 professional sports teams in eight different leagues. Here are all the pro teams in the state.

California Sports Betting FAQ

When will sports betting be legal in California?

Because Props 26 and 27 didn’t pass in 2022, it is anyone’s guess when sports betting will come to California. The sportsbooks could bankroll another initiative in 2024, but they are still figuring out if that would be an effective strategy. Bottom line is that it will be several years before sports betting is legal in the state, if it ever happens.

What happens now that California Prop 27 didn’t pass?

It may seem like legalized sports betting in California is inevitable, but that is not true. Efforts to legalize sports betting in the legislature have gone nowhere, even as many other state legislatures have decided to bring sports betting to their states. The power and influence of California’s tribes have kept mobile betting from coming to the state, which won’t change anytime soon. Prop 27 is not the last chance for legal mobile sports betting to come to California, but because it did not pass, several years may pass before we see legalized sports betting in the Golden State, and even that is not a guarantee.

Which sportsbooks will launch in California?

The first wave of sportsbooks to open up shop in California will likely include BetMGM, FanDuel, Caesars Sportsbook, DraftKings, PointsBet, and BetRivers. California bettors will have a variety of options available to them once these sportsbooks launch in the state.

What are sportsbooks doing to promote responsible betting?

Every sportsbook puts forth a lot of time and effort to promote responsible gambling. Such efforts include deposit and time limits on the app and a self-exclusion option that allows users to ban themselves for a certain amount of time. The sports betting industry also helps fund nonprofits such as the National Council on Problem Gambling, which offers a helpline and chatline for people who need to talk to someone about their problem gambling.