Published: May 5, 2022

California voters will decide whether to join online sports betting frenzy in November

There’s a reason they call California the Golden State, and the fervent competition for billions of dollars expected to be produced by online sports betting is the equivalent of a modern gold rush. 

Those leading the push for legalized online sports betting in the California rejoiced Tuesday over the official gathering of more than 1.6 million signatures, sending a second betting initiative to the state’s November ballot. 

Previously, a separate measure limiting sports betting to in-person wagers inside tribal casinos and "brick-and-mortar" facilities, such as horse race tracks, also eclipsed the million-signatures threshold. 

Because of the prevalence of tribal casinos and horse tracks in California, other venues — Dodger Stadium, SoFi Stadium and Arena, for example — will be on hold to land on-site sports lounges like the ones landed by Wrigley Field and Madison Square Garden. 

Regardless, with California’s sports-enthusiastic population of 39 million trouncing that of the over 19 million in New York, legalizing online sports betting is expected to generate a taxable mother lode of riches. 

The online betting measure would earmark 85% of the online betting tax dollars for homelessness and mental health support, while 15% would go to tribes not participating in the marketplace.

Preliminary estimates are that $500 million would be raised annually in California by applying the 10% tax on online sports betting, according to Nathan Click, a spokesman for Californians for Solutions to Homelessness and Mental Health Support, which supports the online betting measure.

“This is the state’s No. 1 need, its greatest humanitarian challenge, and right now there is no permanent revenue source for housing and the services required to help elevator people out of homelessness,” Click said.

The sports betting measures need to exceed 50% in yes votes to pass.

Supporters of the brick-and-mortar measure have targeted the online sports betting group in television ads, calling the option troubling because minors could access adults' accounts. The online-betting group counters face recognition and background checks can counteract such attempts.

Click said both measures could pass and co-exist in their own working models.

Should the in-person tribal casino measure not pass, those tribes who want in on the sports betting business would be allowed to create their own online sportsbooks, joining those linked to the online sports betting measure — FanDuel, DraftKings and BetMGM. 

The annual taxable dollars estimate projects an astounding $50 billion of annual online sports betting if California mandates betting to start no later than Aug. 29, 2023. 

New York opened legalized online sports betting in January and a record $5.28 billion was bet in the first three months of business, generating a walloping $167.392 million in state taxes. 

New Jersey, Arizona and more than 20 other states are reporting windfalls of cash from taxes hooked to online sports betting legalization. 

“These states are using this revenue to solve big challenges. California should be next,” Tamera Kohler, CEO of the Regional Task Force on Homelessness San Diego, said in a prepared statement distributed by the homelessness and mental health advocacy group. 

That group reported Tuesday that California polling shows the online betting venture has support from 59% of residents canvassed.

The measure will be up for vote Nov. 8. 

“This ballot measure would give cities like Fresno a guaranteed funding source to address homelessness,” Fresno Mayor Jerry Dyer said in a prepared statement released by the homelessness/mental health group. 

Los Angeles, San Francisco and San Diego have also struggled with a homelessness crisis. 

“To truly solve this critical issue and give those most vulnerable among us the housing, mental health and addiction treatment they need, there must be an ongoing revenue stream,” Dyer said. “This initiative would do just that.”

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