A bill that would allow California racetracks and simulcast wagering facilities to conduct betting on professional and collegiate sporting events has been introduced in the state legislature.
The measure would also allow card clubs and tribal gaming casinos to conduct sports betting, a multi-billion dollar industry nationally, for the first time in the state.
Current federal law prohibits such wagering under the Professional and Amateur Sports Protection Act of 1992, but makes exceptions for the states of Montana, Oregon, Delaware, and Nevada.
New Jersey, which passed a law similar to the one proposed in California in January following approval by voters in a nonbinding referendum, plans to challenge the federal ban. It contends the act violates provisions under the commerce and equal protection clauses of the U.S. Constitution, according to a state senate consultant.
SB 1390 was introduced Feb. 24 by Sen. Roderick Wright, Democratic chairman of the senate's governmental organization committee, which oversees horse racing and public gaming. The measure is expected to get a first hearing before the committee in April, according to Paul Donahue, a G.O. committee consultant who is preparing an analysis of the measure.
Wright's Southern California district includes Hollywood Park, which is in imminent danger of being razed for a large-scale commercial and residential redevelopment.
"Senator Wright has a real affinity for the horse racing industry," Donahue said. "He's kind of old school in that he doesn't want to see these racetracks turned into condominiums."
More than the revenue it would provide, sports betting is viewed primarily as a way to get people back to the racetrack, Donahue believes.
He said that California is one of seven or eight states looking at sports betting legislation in expectation that the federal ban will be overturned. He said that many legal observers feel that PASPA is unconstitutional so it is important to get a state law on the books.
"There's no rational basis for the federal law," Donahue said. "Oregon can have sports betting on every street corner if it wants to. But we can't do the same thing in this state."
Under the bill's provisions, sports betting could only be conducted in person at licensed California facilities. No bets could be taken over the phone or via the Internet. The California Horse Racing Board and the California Gambling Control Commission, in collaboration with the state's Department of Justice, would regulate the activity and oversee licensing.
"It makes sense to have the agencies that have already done the licensing be in charge of regulating it," Donahue said. "By opening it up to all those who are licensed to conduct wagering, no one is being favored. We are not creating a new class to be licensed."
Kirk Breed, executive director of the CHRB, said the addition of sports betting would present no major changes in enforcement or investigation procedures for the agency.
"All of us in horse racing feel that sports betting is a natural match with racetracks and satellite wagering," Breed said. "It provides an incentive for more people to come to the racetrack, especially young people. Personally, I think it's something we've got to get done."
Facility operators would be in charge of setting odds, according to the bill.
"The bill is legitimizing something that has been going on in California illegally for a long time," Donahue said. "It also provides an economic incentive to enhance their (tracks and simulcast facilities) business opportunities. And it's something the people of California should be allowed to do."
It's not clear what kind of impact sports betting would have on betting establishments or state revenues. A revenue projection is not yet completed, Donahue said.
"If everything lines up correctly, we would look very favorably at the possibilites this bill provides," said Christopher Korby, executive director of the California Authority of Racing Fairs.
