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States Across the Country are Making Billions on Sports Betting. So Why Doesn’t California?

April 6, 2023

Since the US Supreme Court opened the door for states to legalize sports betting in 2017, the industry has quickly expanded nationwide. Now, 36 states offer legal options for sports betting.

The rewards have been immediate, with billions of dollars being added to state revenues.

These revenues are put to work in various ways: Colorado uses it to fund its water plan, Illinois is rebuilding their state infrastructure. And Pennsylvania which legalized sports betting in 2019 and hosts some of the most popular sportsbooks in the nation is investing in education and in the property tax relief fund.

With the early success, it is no surprise that sports betting has snowballed in the US. However, one notable state has yet to pass sports betting laws: California. The question many people are asking now is why?

Nationwide Revenue Numbers from Sports Betting

2022 was a record-setting year for the sports betting industry in the US. According to the American Gaming Association (AGA), the states combined to bring in over $1.5 billion in tax revenue. That is a whopping number that is a massive jump from 2021, thanks mainly to New York joining the states that allow sports betting. The state legalized it in 2022, bringing in over $691 million in tax revenue.

It’s an impressive mark, but you can expect it to be topped once again in 2023. As of March 14, states have reported over $2.6 billion in tax revenue from sports betting. That is a massive jump from the previous year and has already surpassed projections set by the states.

The States Making the Most Money From Sports Betting

The states with the top five amounts of tax revenue from sports betting are New York, Pennsylvania, New Jersey, Illinois, and Tennessee. Nevada is close behind in sixth, with the rest of the country trailing further behind. Here is a look at how these top five states performed in 2022.

State2022 Tax Revenue from Sports Betting
New York$691,725,874
Pennsylvania$138,437,433
Illinois$119,193,880
New Jersey$97,880,392
Tennessee$68,052,961

Why hasn’t California Legalized Sports Betting?

While there have been several significant attempts to legalize sports betting in the nation’s most populated state, they have all failed to even get to a vote. The state would need a referendum to allow citizens to vote on legalizing the industry in their state. However, an aggressive campaign from the state’s Native American Tribes has caused the efforts to stall.

Currently, the state’s Tribal casinos have a monopoly on casinos in the state and are estimated to bring in over $8 billion a year. Those numbers rival the revenue of Vegas casinos, giving the Tribes plenty of reason to fight against this movement. While they could offer their own sports betting under a new law, the fear is that the ability to bet online would drastically lower the number of people visiting their casinos.

Tribal opposition to legal sports betting in California has already stopped efforts to bring it to a vote in each of the last three years. However, there are signs that sports betting may get enough support to bring sports betting to a vote in 2023. It is believed that most residents would vote yes, so it will come down to either negotiating a deal with the state’s Tribes or overcoming their campaign against it.