Proposal Signals Trust is Building
The state’s tribes have been the biggest roadblock for sports betting. They have claimed that several key industry proponents lied to them to legalize the industry. That has broken the trust, leading to years of failed bills.
While the tribe's proposal is far from guaranteed to pass, it shows that trust is beginning to be restored. Several key supporters have been removed from the negotiation process, helping to ease tensions between the two sides.
If third-party sportsbook operators can reach a deal with the tribes, California could finally have a legal sports betting market.
Can a Tribal-Run Market Get Enough Support?
California’s tribes operate one of the largest gambling industries in the country, outearning even Las Vegas. They fear online sports betting could significantly threaten that revenue if lawmakers cut other third parties out of the industry.
The tribes' chief rivals were card rooms and horse tracks. These operators believe they should have a right to a piece of a legal sports betting market. They have lobbied hard with lawmakers, leading to strong support in the state legislature.
The problem is that those operators and tribal leaders have a bitter relationship and likely won’t find an agreement. This will set up a fierce debate among lawmakers, making the passage of any bill difficult.
Prediction Markets Change Conversation
This round of negotiations over sports betting will feature a new wrinkle: sports prediction markets. Crypto trading platforms offer these and allow users to purchase “contracts” on who they think will win a game, tournament, or event.
These platforms allow customers to gamble against the market instead of the house, allowing them to avoid falling under the gambling umbrella. That means they can operate anywhere in the US, including California.
Prediction markets are under fire but have support from the federal government. If they are allowed to remain, Californians would be allowed to bet on sports without the tribes, operators, or state making any money. This motivation is bringing the sides together and could finally create a regulated sports betting market.
