California's Expansion into Gambling Continues

Two bills presently in a hold pattern in the California legislature have been boosted by the results of a recent field poll.  Legalizing sports betting is favored by 58 percent of all registered voters – a 23 percentage-point margin over opponents – receiving thumbs up from both genders and all age groups, political parties and religions sampled, the Field Poll found.  Online poker, a separate option for expanding gambling in California, also received more support than opposition in the Field Poll but by a much tighter margin – four percentage points.
In California, Senate Bill 1390, proposed by Inglewood Democratic state Sen. Rod Wright  in February to legalize sports betting if Congress alters the federal ban or it is thrown out in court.  It passed the Senate 32-2 in late May, and has moved onto the Assembly.  Senate Bill 1463, languishing in the Legislature, would allow Californians to play poker on state-sanctioned websites.  Gov. Jerry Brown has not indicated if he will sign either of the bills if one or both pass both houses.

Wright is chairman of the Committee on Government Organization, which oversees horse racing. Wright’s district is home to Hollywood Park, a major horse track.  SB 1390 would  help the state’s struggling horse-racing industry by making horse tracks – as well as Indian casinos and card rooms – the primary beneficiary of the legalized sports betting.  Total handle at racetracks last year declined by more than $537 million, according to the California Horse Racing Board’s annual report.Horse tracks are also looking to strike while the iron is hot if online poker prevails in the legislature.  Horse Racing United, a not-for-profit organization representing substantially all thoroughbred racing and breeding interests within California, announced an exclusive provisional agreement under which Cantor Gaming, subject to pending state legislature approval, would provide Horse Racing United the technology and supporting infrastructure required for a world-class intrastate Internet poker platform, capable of offering online poker wagering to registered players in the State of California.

Federal Reaction is Unclear

Legalizing sports wagering in California would accelerate any showdown with the federal government over the issue.  The Professional and Amateur Sports Protection Act of 1992 banned sports gambling in all but four states.  In Nevada – the obvious sportsbook king of the U.S. – casino visitors wagered about $2.87 billion on sporting events in 2011. Gross gaming revenue for Nevada’s sports books last year was $140.7 million, equal to 4.9 percent of the total wagered.  The other exempted states are Oregon, Montana and Delaware, where operating sports lotteries are legal.  Sports excluded from the act jai alai, horse racing and dog racing.

In New Jersey, the state Division of Gaming Enforcement has created regulations for sports betting, giving Republican Gov. Chris Christie the necessary framework for his campaign to overturn the federal ban.  The new regulations would restrict sports pool licensing to Atlantic City casinos and state-owned racetracks, or their joint venture. It would cost $50,000 for a license application, and a resubmission fee of the same amount over five years. Half of the fees will go toward prevention, education, and treatment programs for compulsive gamblers.