How Much Revenue Could California See From Sports Betting
While sports betting is legal in over half of the states in the union, California is among the places where bettors are still waiting to place legal wagers on sporting events. The state is a sports mecca with over twenty major league professional teams. On the college level, California has more NCAA Division I schools than any other state at 27.
Furthermore, those teams include franchises and programs that win championships often including the NBA’s Golden State Warriors as well as Pac-12 member Stanford, which has won more championships than any other DI athletic program in the nation. Los Angeles schools UCLA and USC are at number two and three, respectively, behind Stanford in championship titles.
Given this backdrop, when sports betting in California finally arrives, the revenue generated is expected to eclipse all other states by a large margin.
California’s Sheer Size Would Make it King
As of now, New York is at the top of the list for sports wagering revenue. Bettors helped the state collect over a half a billion dollars in tax revenue since mobile sports wagering became legal in January 2022. As of Oct. 30, taxes and licensing fees totaled $740 million for the state.
California’s population and economy are massive, compared to New York’s. With 39 million people, the West Coast state’s population is twice as large. If it were a country, California would have the fourth-largest economy on the planet. Hence, it’s no surprise that estimates for sports betting in the Golden State outpace the rest of the country.
If tribal casinos and private horse racetracks were allowed to offer retail sports betting, the projected revenue would be $3.1 billion, according to a report from research and consulting firm Eilers & Krejcik Gaming. The failed Prop. 26 that was on the Nov. 8 election ballot was a measure that would have given the tribal casinos and racetracks the ability to open retail sportsbooks.
Before the election, Del Mar Racetrack COO Josh Rubinstein said the approval of Prop 26 would be “monumental for us.” He added: “I believe we would shatter our current records immediately upon Prop 26 being implemented.”
Mo’ Money, Mo’ Money, Mo’ Money For The Tribes
California has 66 tribal-run casinos that already generate $9 billion annually. Several of those casinos have existing partnerships with professional sports teams. For example, Yaamava’ Resort & Casino owned by the San Manuel Band of Mission of Indians is the exclusive tribal casino of teams across several leagues including the Anaheim Ducks, the LA Kings and the Los Angeles Dodgers.
The major sports leagues themselves have existing partnerships with online sportsbooks including DraftKings and FanDuel. When sports betting finally becomes legal in California, it’s possible that the tribes, the pro teams, and online sportsbooks could enter lucrative partnerships.
Estimated Revenue From Mobile Betting Alone
The Eilers & Krejcik Gaming report also provided estimates on how much money the state could earn solely from online sports betting. Companies like FanDuel and DraftKings would be able to offer their mobile betting apps to California residents. Even with just online wagering available to residents, the state could see $2.8 billion annually in revenue according to the report.
The ill-fated Prop 27 on the Nov. 8 ballot was a measure to bring online sports wagering to California. The fine print of the ballot stated that sportsbooks would have had to pay a $100 million licensing fee, renewed every five years for $10 million. If future measures have similar licensing stipulations for online sportsbooks, the state would make money before a single bet is placed, not to mention the windfall from licensing fees every five years.
“This campaign has underscored our resolve to see California follow more than half the country in legalizing safe and responsible online sports betting,” Nathan Click, a spokesperson for the Yes on 27 effort said in the aftermath of the election.
Eventually, Sports Betting Is Coming
Sports betting will arrive in California sooner or later. Both the online sportsbooks and tribal leaders agree on that point. And when it does, and if estimates are correct, California will instantly outperform every other state in sports betting revenue. As of now, the largest market for sports betting is still off limits for bettors and the state is missing out on billions in revenue.
