The Gold Rush of legal online California sports betting will not arrive in 2023 or anytime soon, as California voters rejected both ballot measures. While several proposals to bring the best sports betting sites to California have failed, legal daily fantasy sports contests have seen a surge in popularity in a thriving Golden State market.

Known as the “Golden State,” California would be one of the richest countries on Earth if it were an independent nation. Offsetting that is a lack of favorable business practices by an oppressive government. California has seen a massive loss of population, business, and wealth because of its one-party state pigheaded stupidity and anti-growth policies. And these traits go a long way toward explaining why California has no legalized sports gambling.

State of California Sports Betting Overview

Sports betting remains illegal in both retail and online contexts in California. Though Californians had two different ballot options to legalize sports betting in November 2022, they declined. 

Whether you live in California or not, you may not understand why sports betting is a contentious issue in the state. After all, California’s population yields the state’s potential to be the country’s largest sports betting destination. Legalizing sports betting would undoubtedly add much money to the state economy.

The problem is that there are several well-funded groups in the state that both have an interest in the future of sports betting in California and are well-connected to the political systems in the state. These groups do not always agree with one another. In fact, some of them are entrenched adversaries.

The primary stakeholder for all forms of gambling in California is a loose coalition of tribal groups. California is home to hundreds of federally recognized Native American tribes. These tribes own and operate all of the casino locations in the state. Furthermore, they have argued repeatedly that the language in their compacts with California gives them a monopoly over gambling in the state. This has led to their steadfast refusal to allow most expansions of gambling. Even though the tribes would likely benefit from legal sports betting in California, they do not want to run the risk that the expansion might cede some of their control to another group.

The tribes do not agree with or even acknowledge the existence of the state’s many cardrooms. The rooms, which include some of the largest poker venues in the world, contend that they exist in a neutral space within the context of the compacts and California law. The tribes do not agree with this argument and go to great lengths to deny that the card rooms are legal. Tribal lobbyists have even gone to bat against lawmakers whose legislation acknowledges the card rooms in any way, as they fear that such a reference might grant the rooms some modicum of legitimacy.

A third player at the sports betting table is the group of horse racing tracks in California. The state is home to several prestigious racetracks, including Santa Anita Park. The tracks themselves don’t have any conflict with the tribal groups and are somewhat likely to be involved in any sports betting that comes to pass, but as mentioned, the tribes aren’t prone to taking chances with expanded gambling. 

Finally, no conversation about an issue in California doesn’t involve the state government. Lawmakers and regulators in Sacramento have no interest in allowing a gambling expansion to proceed without getting their piece. Sports betting would be a major cash infusion into the state’s coffers. Still, the political realities in the state — particularly with the tribal groups — make outright support of sports betting legislation a tricky proposition.

State of California Sports Betting Timeline

The latest California online sports betting efforts emerged in October 2023 via two ballot initiatives that would authorize tribal operators to operate mobile sportsbook apps in partnership with experienced operators. The two ballot proposals would work in tandem to give tribal operators the exclusive right to offer online sports betting through a hub-and-spoke model that would require all wagers placed in California to be routed through servers located on tribal lands.

The proposals would also allow tribal casino operators to partner with experienced sportsbook brands, but it would require them to use their federally recognized tribal names exclusively for branding. In other words, if a tribal group partners with DraftKings for the California online sports betting market, the mobile app would be named after the tribe and would not be permitted to use DraftKings branding at all.

The proposal would also limit partner operators to receiving no more than 40% of revenue share from their tribal partners. Additionally, operators would pay 25% in total taxes and fees once licensed. The law would establish a minimum age of 21 to bet online and would allow wagers on professional and college sports.

Whether the proposals are successful in authorizing online sports betting in California is uncertain at best because they don’t even have the backing of California’s tribal casino operators. In a statement, the California Nations Indian Gaming Association said it was “deeply disappointed” in the proposals’ sponsors for not consulting with the tribes before filing the ballot petition.

In early 2023, DraftKings CEO Jason Robins said, “I don’t think it’s a 2024 thing” about sports betting legalization in California. Robins cited a stalemate situation with California tribes as the industry’s major hurdle.

The events of the first half of 2022 favored the tribal groups in the state. A lawsuit by cardroom interests to challenge the legality of the retail sports betting initiative failed to gain an audience with the California Supreme Court in February, and a refiling of the same suit in March led to its dismissal in the Los Angeles Superior Court in April.

April also saw the end of efforts for sports betting at card rooms in California. The tribes then declined to pursue passage of their own online sports betting measure in May, opting instead to fight against the sportsbook-backed proposal (Proposition 27).

However, the tribes could not stop the online measure’s momentum, and it gained access to the ballot in June when the secretary of state certified more than 1 million signatures on the petition. Thus, Californians voted on two separate sports betting propositions in November—however, both measures failed by wide margins.