The question has confounded the Nevada gaming industry since the mid-1990s.
Does gaming expansion in neighboring California pose an economic threat to the state’s casinos?
California voters, who approved tribal casino expansion in 1998, will have another chance to weigh in on the Golden State’s gaming future in November.
The choice could consist of three ballot questions to legalize sports betting. The initiatives have different support groups and provide various wagering options.
A coalition of nearly two dozen tribal casino operators wants approval for just retail sportsbooks inside their properties. Seven of the nation’s largest sports betting operators, meanwhile, are backing a referendum to allow mobile and online sports betting. Three other tribal casinos are pushing a mobile sports betting bill that would allow the tribes to operate the activity while prohibiting the inclusion of out-of-state sportsbook operators.
California, with a population of nearly 40 million, is the largest of the 17 states still without legal sports betting. According to the American Gaming Association, it is one of 11 states with either pre-filed legislation or a pending ballot question related to expanded sports betting.
Sports betting proponents predict big dollar signs for the Golden State, but if history repeats itself, that may not spell doom and gloom for the Silver State’s gaming cash flow. Nevada gaming companies are largely staying out of the fray — at least for now — and analysts are not sounding alarm bells yet. After all, Nevada has seen gaming proliferate beyond its borders for years now.
B Global Managing Partner Brendan Bussmann called Nevada a “one foot in the grave state” whose demise was often predicted during different waves of nationwide gaming expansion.
“New Jersey was going to kill us. The expansion of sports betting was going to kill us. Online gaming was going to kill us. We are still kicking and seeing record revenue,” Bussmann said of Nevada’s record-shattering $13.4 billion in gaming revenue in 2021.
“The experience of Las Vegas cannot be matched, and so people will still come to Nevada and partake in sports betting,” he said.
‘I’ve quit betting against Nevada’
The retail sportsbook initiative backed by tribal casino operators qualified for the Nov. 8 ballot last year. The mobile betting initiative backed by sportsbook operators reached 25 percent of its required signatures in January. The tribal mobile betting measure hasn’t yet achieved the 25 percent mark.
The two remaining petitions need to be filed with the secretary of state’s office by the end of April to make it on the 2022 ballot.
Nearly 80 tribal casinos operate in California and produce, by recent estimates, a U.S.-leading $9 billion a year in annual gaming revenue. California is home to multiple professional sports teams in all four of the major sports leagues, as well as several of the nation’s largest college athletic programs.
Chris Grove, CEO of American Affiliate, a technology and media company focused on the U.S sports betting and online gaming market, told the Los Angeles Times in November that California legal sports betting could produce north of $3 billion in annual revenue, depending on what voters ultimately approve and how the facilities are managed.
https://thenevadaindependent.com/article/california-sports-betting-competition-or-opportunity-for-nevada
Nevada sportsbooks produced a single-year record of $455.1 million in revenue based on $8.1 billion in wagers in 2021. That’s one reason analysts, gaming operators and Nevada casino and tourism leaders have debated the state’s ability to match up with the potential competition.
For some analysts, the answer can be found in Interstate 15 traffic jams.
“There's little reason to think that California sports betting legalization would represent a threat to Nevada's sports betting industry, in our view,” Eilers & Krejcik Gaming analyst Chris Krafcik said in an email. The firm is based in Southern California.
“California drive-in traffic to Las Vegas remains strong despite the widespread availability of various types of gambling within California,” said Krafcik, who follows sports wagering nationally.
Both ends of the state rely on California for tourism.
The Reno-Sparks Convention and Visitors Authority said in its most recent study that 27 percent of all visitors come from California. The Las Vegas Convention and Visitors Authority counted 30 percent of the Southern Nevada market’s overall visitation as coming from California, with 27 percent of those visitors making the trek from Southern California.
Krafcik said Las Vegas has sportsbook offerings that provide “a level of destination appeal for sports bettors that other states, including California, simply cannot match.”
For example, Circa in downtown Las Vegas has a three-level sportsbook that includes private boxes, while the nearly 16,000-square-foot rooftop pool area includes a 40-foot tall television screen tuned to sporting events.
Art Manteris, who retired last year after managing sports betting for more than three decades at Caesars Palace, Las Vegas Hilton (now Westgate) and Station Casinos, was vocal in his worries for Nevada’s sports betting future after 2018, when the U.S. Supreme Court ruled that states could legalize and regulate sports wagering.
“Some of us old-timers had serious concerns about Las Vegas’ future when riverboat casinos started opening, and when Native American casinos opened,” Manteris said.
“We were wrong every time,” Manteris said. “So what happens to Nevada sports handle when California opens sports betting? Good question. But I’ve quit betting against Nevada.”