The state’s tribes hold exclusive gaming rights, a privilege that has provided them with significant financial security. Any attempt to expand legal gambling must pass through their approval, ensuring that non-gaming tribes also benefit from the revenue. While this exclusivity has safeguarded tribal economies, it has also made passing sports betting legislation particularly challenging. The failure of Proposition 27 in 2022, which sought to legalize online sports betting outside of tribal lands, demonstrated the power and influence of these tribal entities. The rejection of the measure, which failed to garner even 20% support, showed that California’s voters were not ready to override tribal authority in favor of corporate sportsbook operators.
Californians find creative loopholes for sports betting ban
At the same time, California’s sports betting market continues to operate in a legal gray area. With traditional sportsbooks blocked, alternatives like Kalshi and daily fantasy sports (DFS) platforms such as DraftKings Pick6 have gained traction. Kalshi, a prediction market app regulated under the Commodities Futures Trading Commission, allows users to buy and trade contracts on various outcomes, including the Super Bowl winner and entertainment-related bets.
Similarly, DFS platforms enable players to wager on player performances rather than game results, skirting traditional gambling laws. While these alternatives provide some form of engagement for bettors, they often come with lower payouts and limited options compared to fully legalized sportsbooks.
Despite the tribes’ hesitance, demand for sports betting remains high, as evidenced by the record-breaking projections for Super Bowl wagers. American bettors were expected to place $1.39 billion in bets on the event, an 11.2% increase from the previous year. California’s exclusion from this legal market not only denies the state a substantial source of tax revenue but also pushes residents toward unregulated or out-of-state options.
However, the risks associated with sports betting cannot be ignored. Studies, such as the one conducted by UC San Diego in 2024, have shown that legalized sports betting increases irresponsible gambling behavior, particularly among lower-income individuals. The ease of access to online sportsbooks has led to rising cases of gambling addiction, financial troubles, and mental health concerns. This concern has contributed to the reluctance of tribal leaders and legislators to rush into legalization without thorough planning.
The future of California sports betting remains uncertain, caught between the promise of economic windfall and the protection of tribal sovereignty and consumer welfare. While the demand is evident, any future legislation will require careful negotiation to ensure that all stakeholders — from tribes to lawmakers to the betting public — benefit from the transition. Until then, California remains on the sidelines, watching other states capitalize on an industry it has yet to embrace.
