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On the surface, California and Florida couldn’t be any noteworthy different — geographically, politically, and vibes-wise. However, events that took place in Florida last week could have massive ramifications on California in terms of sports betting.
As you probably know, California is one of 12 US states still holding out on legalized sports betting. Even more, among those states, it feels like California isn’t even close to getting any bills passed. The appetite isn’t there for local lawmakers and even residents — despite the state being a hot bed for college and pro sports.
However, a new path has cleared for legal betting in the Golden State . The best part? It might not even require votes. Let us take you into what’s going on, beginning with the far-reaching implications of a Florida court case.
Tribe’s Monopoly On Florida Sports Betting Will Stand
Contrary to popular belief, Florida does have sports betting. However, it’s not a free market. No, in Florida, the Seminole Tribe has an exclusive right to offer sports betting, which they do in partnership with Hard Rock International. But that exclusive right came under legislative scrutiny.
You see, Florida government, led by governor Ron DeSantis, entered into a compact with the tribe. It was a 30-year agreement that cost the Seminole Tribe billions of dollars. Since it was an agreement, no public vote was cast like other states. This agreement is a “hub-and-spoke” model that allows betting on tribal land in Florida.
This did not make others with a financial interest in betting happy, which led to a string of lawsuits. However, one lawsuit by West Flagler Associates made its way to the US Supreme Court last week — the highest court in all of the land. It wasn’t a full-on hearing, but a request for a cert petition. Welp, that request was denied, meaning the case won’t go to hearing.
And with that Supreme Court decision, the Seminole Tribe has, more or less, locked in their monopoly until 2051 when the original 30-year agreement ends. There’s a small chance that commercial sportsbooks — DraftKings, ESPN Bet, and FanDuel — can enter the fray, but they need a vote not a handshake agreement like the tribe. Never say never, but the Seminole Tribe would fight any vote tooth and nail (using the boatloads of money they’re making off betting too).
You’re probably thinking, “cool, but how does that affect California?” A lot, actually. Really, any state that allows betting strictly via tribal casinos like California is impacted by this Supreme Court decision. Allow us to explain:
California’s Path To Legal Betting Now Open
As we said, the Supreme Court is the highest order. What they say, goes for everyone else — unless challenged (which is very hard to do). Therefore, this is the green light for California tribes to enter into an agreement with local lawmakers to offer sports betting.
But here’s the thing: tribes already have agreements in place. They already have land casinos throughout the state. All they need to do is amend those agreements to also feature sports betting on their native land.
The key is none of this needs a vote. In 2022, this topic hit the ballots under the Legalize Sports Betting on American Indian Lands Initiative initiative. The results, well, they were not pretty. About 67 percent of Californians voted no on the bill, which tells you how much voters are against sports betting even if it’s limited.
So really, all it would take for legal sports betting is for the tribal casinos to pony up money to amend the deal. That’s it. Given how much the market opportunity is — California is the largest state by population — you have to believe the tribes will fork over what it takes to get this through. With a monopoly, they can recoup the costs and then some in a matter of time.
Big-Name Operators Left Licking Their Chops
If you’re a commercial operator like BetMGM or FanDuel, you have to be mad at the Supreme Court decision. California is the biggest domino to fall nationwide and allowing compacts puts these commercial sportsbooks at a huge disadvantage.
Don’t take our word for it though, this is what Deutsche Bank analyst Carlo Santarelli has to say about the matter:
“Much like Florida, however, should the tribes successfully amend the compact, the opportunity for the traditional online operators would remain cloudy.”
Cloudy indeed. Billions are literally on the line in California’s sports betting industry. Though, execs and investors from those big-name operators have one glimmer of hope. Unlike Florida and the Seminole Tribe, there is not just one tribe that dominates the casino landscape. There are multiple tribes in California operating casinos.
This situation leaves the door open for one or more of those casinos to partner with a commercial operator. After all, setting up a betting app is costly and involves tech — something the tribes might not want to invest in. Partnering with an existing app is a quicker set-up process.
We’ll have to see what happens. But don’t be surprised if legal sports betting comes to the Golden State sooner rather than later.
