California sports betting faces uphill climb in the legislature

New California Sports Betting Effort Comes Via Ballot Initiative Filed This Week

California sports betting

If the state legislature does not allow voters to decide on legalizing California sports betting, an initiative filed Monday might give them the chance.

Russell Lowery, a consultant for a group calling itself Californians for Sports Betting, submitted the initial petition paperwork with the California attorney general’s office. The petition is being pushed for this year, but may not be qualified until the 2020 election.

Sports betting still active in the legislature

California’s state constitution prohibits sports betting and a majority of voters would need to approve a change. Assemblymember Adam Gray is pushing the state legislature to put the measure in front of voters in November, but similar efforts to legalize sports betting stalled in past sessions.

A Medium post earlier Monday under the Californians for Sports Betting handle put more direct pressure on the negotiations.

“… fierce opposition from entrenched special interest groups makes it unlikely to pass through both houses of the state legislature before the June 28 deadline — and proves voters need to take this matter into our own hands,” the post reads in part.

Sorting out potential players

Native American tribes hold a powerful position in gaming in the state thanks to constitutional protection for most forms of gaming. Tribal gaming generates about $8 billion annually in California.

Steve Stallings, chairman of the California Nations Indian Gaming Association, told the Associated Press last month that tribes will protect that interest in any sports betting discussion.

“Expansion of gaming is a slippery slope,” Stallings said. “Tribes feel like they have somewhat an exclusivity to it. When the state or other interests violate that, then tribes are concerned.”

The other notable gaming interests are the state’s roughly 75 card rooms and more than a dozen horse racing tracks. For the card rooms, their house-banked games have endured legal issues, as the tribes have long argued they violate the law in the state.

It appears those rooms would benefit from the legislation as well. The paperwork filed Monday would change the constitution to say that “the Legislature may authorize banking and percentage games including and not limited to sports wagering.”

“If they don’t resolve it in the legislature, there’s an initiative measure out there,” Lowery said. “I’m not sure what impact that would have (on negotiations). Filing it now gives me time to put the whole coalition together.”

So who is backing the initiative?

Lowery declined to say whether the card rooms are involved, and would not identify who is supporting the initiative beyond “in-state gaming interests, leagues, and out-of-state gaming interests.” But given the language about house-banked games, it’s almost certain the card rooms are involved.

“It’s just a response to the Supreme Court decision,” Lowery said. “Then having watched the legislative dynamics over the last decade or so on the gaming issue, I had a pessimistic view of the legislature’s willingness to address the issue.”

Lowery is a former chief of staff to the California Senate Republican Caucus and a former lobbyist for Pacific Gas and Energy. He said he has no direct ties to the gaming industry.

Between $2 million and $3 million will be needed to gather signatures for the initiative, Lowery said. Based on the last election’s turnout, between 500,000 and 600,000 valid signatures would be needed to place it on the ballot.

Lowery anticipates that will only be the first of many challenges in putting the question to voters.

“It’s going to be a fight,” Lowery said.

Adam Candee
- Adam Candee is the managing editor of Legal Sports Report. He covers sports business and news from Las Vegas. Adam is a former editor and reporter at the Las Vegas Sun, Arizona Daily Sun and KLAS-TV. He can be reached at [email protected]