California Senator Bill Dodd has announced that he is to remove his proposal to regulate sports betting from consideration, just a day before it was due to go to a vote of the Senate Appropriations Committee.
Dodd’s Senate Constitutional Amendment 6, developed in partnership with Assemblymember Adam Gray, had been placed in a suspense file earlier this month, as its fiscal impact was to be over $50,000.
It would then have required an Appropriations Committee hearing to determine whether it would be released from suspense. This was originally scheduled for June 18, before being pushed back to June 23.
This left the bill with just two days to secure the necessary two-thirds majority in both the California Senate and Assembly to be included on the ballot in the November 2020 election.
Dodd explained that the tight deadline had ultimately put paid to the bill’s prospects.
“Given the deadlines for getting a measure on the November ballot and the impact of Covid-19 on the public’s ability to weigh in, we were not able to get the bill across the finish line this year,” he explained.
“It remains important that we lift this widespread practice out of the shadows to make it safer and to generate money for the people of California. I will continue to be engaged in the issue as we work toward 2022.”
The bill would have aimed to legalize sports betting at tribal casinos and racetracks in the state, and would have permitted mobile wagering. While it was expected to generate up to $700m in annual tax revenue, and was seen as a credible way of making up a significant budget shortfall caused by novel coronavirus (Covid-19), it had also prompted significant opposition from tribal operators.
The tribes were particularly unhappy about a clause they saw as giving cardrooms legal certainty for offering player-banked games, in which one player acts as the ‘house’ for games such as blackjack. This was seen as infringing on their exclusive rights to these products.
Dodd and Gray had attempted to improve this in a round of amendments announced shortly before the proposal was pulled. This required the player-dealer position to be offered to all players at a gaming table at least every two hands of play.
A fee of $0.25 per player would have also been established, while any use of electronic devices or other technology to play games would have been banned. Cardrooms would also have been banned from advertising any ‘Vegas-style’ games.
However the California Nations Indian Gaming Association (CNIGA) welcomed the bill’s withdrawal.
“We are heartened to see that SCA 6 is being pulled from the legislative process,” CNIGA said. “While we appreciate that the state was trying to find additional revenues during this time, this bill was simply bad policy.
“It unjustly rewards the commercial, for-profit gaming industry for their practice of conducting Nevada-style games in flagrant violation of California law. This bill would have also threatened brick-and-mortar establishments by legalizing online gaming, which would reward out-of-state commercial business entities and raise regulatory challenges.”
Further amendments put forward significantly altered the fees set out in the original version of SCA 6. The $5m license fee for online operators was doubled to $10m, though the annual renewal fee was halved to $500,000.
All tax generated from retail and mobile gaming (set at 10% of gross revenue for retail, and 15% for mobile) on tribal lands would also have gone to tribal governments under the changes.
Finally, mobile wagering would have been phased in gradually. On-premises betting would have started at licensed casinos and tracks from September 2021, with mobile wagering then launching in September 2022, but with an in-person registration requirement.
It would not be until a year later that this would be lifted and online registration permitted.
With Dodd and Gray’s proposal being withdrawn, the only prospect for legal wagering coming to California is through a tribal ballot measure put forward in November 2019. While this had gathered 971,373 signatures before Covid-19 hit, just behind the 997,139 needed to make the ballot.
The deadline for collecting signatures arrives on June 25, though the tribes have launched a legal bit to secure a 90-day extension to complete the process.