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Online Sports Betting to be legalized in new proposition

The California Legalize Sports Betting Initiative has qualified for the November 2022 ballot. The initiative legalizes mobile sports betting to Californians 21 and older and redirects 10% of the revenue to fund homeless programs and support other indigenous tribes.

Illustrated by Melody Zhang

By Daniel Gong and Faith Qiao


15 January 2022

 

Introduction:


On November 4, 2021, a new ballot was issued regarding online and mobile sports betting. If this ballot is passed, online and mobile sports betting would be legalized for California residents 21 and older (federally recognized Indian tribes and associated businesses will be running the betting). The state will place a 10% tax on wagers, with the tax going towards regulatory costs to run the program, homeless programs, and to non-participating Indian tribes. Proponents of the ballot hope that tax revenues can reach hundreds of millions of dollars annually. The concern is that the revenue is redirected from other sources, and in combination with regulatory costs, the initiative can result in minuscule profit and social costs.


Why Now?

Sports gambling is gaining traction because of a 2018 supreme court case. In May 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act, a 1992 decision that prohibited legalizing sports gambling. This act was initially passed in order to safeguard the integrity of sports, as there was fear that gambling would make teams “throw” games for money. In other words, this means that an individual or a private entity can bribe or manipulate the outcome of certain sports games in favor of one side of the bet which essentially undermines the integrity of betting as well as the game itself.


However, in 2018, the supreme court ruled the Professional and Amateur Sports Protection Act as unconstitutional. As Justice Samuel A. Alito said, “It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals.” In short, Justice Alito calls the law an attack against state sovereignty, which is why it was ultimately repealed. Even though PASPA was ultimately repealed due to issues with states rights, Gabriel Feldman, director of sports law at Tulane Law School, says “It will likely change how we viewed sports for the past 100 years.” With the removal of the law, states are now allowed to pass bills legalizing online and mobile sports gambling. Illegal gambling was already hugely popular across the US before this court case, with over 150 billion dollars in sports betting in 2018. So, after this court case, the huge novelty factor of being able to gamble legally combined with the initial appeal of gambling created a huge boom that is still currently ongoing.


Considerations:

Betting (in essence gambling) and displacing the funds into initiatives to help the homeless and other social welfare objectives is a good idea on paper, but the issue lies in the fact that gambling predominantly affects poorer neighborhoods more than the affluent. This is based off of a study conducted by the Buffalo Research Institute that involved 5000 telephoned interviews with ages ranging from 14 to 90. Additionally, according to the International Center for Responsible Gaming, problem gambling can arise from “all types of gambling, from sports betting and the lottery to bingo and casino games.” However, in California, there is a substantial black market of illegal, unregulated, and untaxed betting enterprises. Thus legalizing (therefore, enacting regulations on) betting will slowly "stamp out" this market or at the very least generate revenue from underground gambling.


Furthermore, sports gambling is already generating huge revenues in the 30 states that have legalized it. From January to October 2021, sports gambling generated $3.16 billion, an increase in profit of 230% from 2020.

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Gambling is a serious problem and often leads to substance abuse. For more information on how it impacts daily living, potential treatments, and how to help people who might be suffering from addiction check out Bicycle Health's article detailing the relationship between gambling and substance abuse disorders.

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