The ongoing dispute over the regulation of sports betting in California has resulted in some interesting hybrid legal strategies. Most of the current discussions center around whether or not there is a right to collect taxes off of winnings from sports betting in California. The state legislature is attempting to pass a bill that, if passed, will make it illegal for online sports books to collect taxes from winners. While no one seems to completely agree with the idea, the fact remains that the bill could raise the costs and fees for sports book owners.
The main argument centers around whether or not sports books should be subject to the same legal regulations as casinos. The argument on both sides is very similar: there is a difference between gambling and lottery tickets. While the lottery is largely localized in California (due to the lack of competition within the state), gambling is usually international, with betting anywhere in the world. Therefore, it makes no sense to apply the same legal regulation to all gambling venues. Native Californian card rooms and state licensed racetracks are exempt from most forms of gambling regulation in the state.
A great many sports books are in conflict with their local governments, often because of their reliance on state regulated gambling. In many towns and cities across the Golden State, elected leaders and city council members are attempting to enact ordinances that would severely limit online sports betting. Many cities and municipalities have passed laws that ban gambling, yet those same municipalities refuse to enforce those laws. The conflict in California seems to stem from the fact that most states want to tightly regulate online sports betting while none of them want to extend the same regulation to brick and mortar businesses. The lack of cooperation from local politicians to pass local laws against online gambling has left many sports books in an awkward position.
The conflict between the California State government and San Miguel Casino is particularly disturbing. San Miguel Casino was built in 1875 and is located on a large parcel of land northwest of San Francisco. San Miguel is one of the best preserved and largest working Native American Casinos in the country. According to the “PNAC”, a non-profit group funded by several prominent Native American tribes, the San Miguel Casino has enjoyed tax exempt status for over twenty years.
Traditional Casinos in the state of California are almost impossible to regulate. State licensed casinos and gaming halls are prohibited from implementing online sports betting, regardless of how well laid out their terms and conditions may be. In most cases, state auditors have discovered that the majority of these laws were never intended to be enacted in the first place. Despite the fact that state auditors have conducted numerous reports outlining the problems inherent in the current legislation, state officials have repeatedly attempted to keep the problem covered up by passing additional statutes. The current legislation attempts to “mitigate” the widespread criticism surrounding the state’s inability to effectively regulate its license gambling halls, by allowing them to continue operating as they are.
Although there is currently no legislation that would force the California State Government to recognize the long standing tribal and dfs operators, the possibility of regulation is highly unlikely. The State has repeatedly demonstrated that they will not become enamored with an unregulated online sports betting industry. If the State ever did become overly intrusive, especially regarding state operated gambling operations, it is likely that it would immediately lose any further state funding provided through the gambling bond rates. As recently stated by Assemblyman Steve Trodden, the State of California is in full support of legislative efforts to legalize sports betting in California. However, he admitted that the prospects for the measure to become a law are slim. In the past, Assemblyman Trodden has indicated that he is expecting the California State Government to take an aggressive stance against the dfs operators, especially if a large number of players from outside of California start to operate daily fantasy sports games in the Golden State.
Currently, the only way the dfs operators will be forced to regulate themselves is if the state gets involved and passes a law regulating the dfs industry. Despite the fact that this measure has the support of the California State Government, many state representatives are trying to introduce similar legislation in the next session. Even though the likelihood of this happening is unlikely, it does raise the same question as to whether or not legalization is a good idea for California? Proponents of legalized online gambling claim that California should become a leader in recreational gaming. By legalizing online gambling, the state will remove a key gateway that profits illicit enterprises. By removing this key ingredient in the chain, online betting will become regulated, safe, and legitimate.
Opponents argue that because the online gambling industry is already illegal in the state of California, it is not wise to legalize it. If you live in California, you should keep in mind that there are currently two different types of regulation for the people who will be able to access your land-based casinos. If you choose to partake in one of these options (we recommend you do so) you should keep in mind the risks and dangers involved. Remember, California is the Golden State because of its long history with business and professional dealings with gambling. If you are looking to take part in a form of gambling that has been deemed illegal in California, then you may want to keep a careful eye on the various news sources that cover the situation, and consider talking to your local state representative about the issue of making California’s daily fantasy sports betting and other forms of gambling legal in the State of California.