How is the American betting market changing in California?

The American betting market has undergone a seismic shift since the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) in 2018, allowing states to legalize sports betting. However, California, the most populous state in the U.S., remains a glaring exception. Despite its massive potential, California has yet to legalize sports betting, creating a unique dynamic in the American betting landscape. This article explores how the betting market is evolving in California, the challenges it faces, and what the future might hold for this lucrative yet untapped market.

The Current State of Sports Betting in California

As of 2025, California remains one of the few states without legal sports betting. Despite multiple attempts to pass legislation, including Propositions 26 and 27 in 2022, voters have consistently rejected measures to legalize sports wagering. These propositions, which aimed to allow retail and online sports betting, respectively, failed due to a lack of consensus among stakeholders, including tribal gaming groups, commercial operators, and lawmakers.

The tribal gaming industry, which holds significant political and economic influence in California, has been a major roadblock. Tribes have opposed online sports betting, fearing it would undermine their exclusive rights to casino gaming. Meanwhile, commercial operators like DraftKings and FanDuel have pushed for online platforms, creating a stalemate that has left California bettors without legal options.

The Economic Potential of California’s Betting Market

California’s potential as a sports betting market is unparalleled. With a population of nearly 40 million and a thriving sports culture, the state could generate billions in annual revenue. For context, New York, the largest legal sports betting market, handled over 22 billion in wagers in 2024, with 2 billion in gross gaming revenue. California’s market could easily surpass these figures, given its larger population and higher per capita income.

The economic benefits extend beyond revenue. Legal sports betting could create thousands of jobs, boost tourism, and provide significant tax revenue for public services like education and infrastructure. However, the lack of legalization has driven bettors to unregulated markets, resulting in lost opportunities for the state.

Challenges to Legalization

1. Tribal Opposition: California’s tribal gaming groups have been the most vocal opponents of online sports betting. They argue that it would cannibalize their casino revenues and undermine their sovereignty. While some tribes have shown willingness to compromise, the majority remain steadfast in their opposition.
2. Political Gridlock: The state’s political landscape has further complicated efforts to legalize sports betting. Lawmakers are divided on how to structure the market, with some advocating for a tribal-only model and others pushing for a more inclusive approach that includes commercial operators.
3. Public Perception: Voters have been skeptical of sports betting initiatives, partly due to aggressive advertising campaigns by opposing factions. Propositions 26 and 27, for example, were criticized for their complexity and perceived lack of transparency.
4. Regulatory Hurdles: Even if legislation passes, implementing a regulatory framework will be a monumental task. California’s size and diversity mean that any system must account for a wide range of stakeholders, from tribal casinos to professional sports teams.

The Rise of Alternative Betting Options

In the absence of legal sports betting, Californians have turned to alternative options like daily fantasy sports (DFS) and sweepstakes casinos. Platforms like Underdog Fantasy and Bet have gained popularity, offering a legal way for residents to engage in sports-related wagering.

Sweepstakes casinos, in particular, have emerged as a controversial yet thriving industry. These platforms operate in a legal gray area, allowing users to play casino-style games without directly wagering money. While critics argue that they skirt gambling laws, proponents see them as a viable alternative until sports betting is legalized.

The Future of Sports Betting in California

Despite the challenges, there is hope for the future. Industry experts predict that California will eventually legalize sports betting, though it may take several more years. The state’s tribes are gradually warming up to the idea, and lawmakers are exploring new ways to craft legislation that satisfies all parties.

One potential solution is a staggered approach, where retail sports betting is legalized first, followed by online platforms. This would allow tribes to maintain control over the initial rollout while giving commercial operators a pathway to enter the market.

Another possibility is the introduction of a new ballot measure in 2026 or 2028. Proponents of legalization are likely to refine their messaging and address the concerns that led to the failure of previous initiatives.

The Broader Impact on the American Betting Market

California’s hesitation to legalize sports betting has significant implications for the broader American market. As the largest state, its absence creates a gap in the national landscape, limiting the growth potential of operators and reducing tax revenues that could benefit public services.

Moreover, California’s stance has influenced other states. For example, Texas, another large market, has also delayed legalization, citing similar concerns about tribal rights and regulatory complexity.

Conclusion

The American betting market is evolving rapidly, but California remains a holdout. While the state’s potential is undeniable, legalizing sports betting will require overcoming significant political, regulatory, and cultural hurdles. As stakeholders continue to negotiate, the rest of the country watches closely, knowing that California’s decision will shape the future of sports betting in America.

For now, Californians must rely on alternative options, but the dream of a legal, regulated sports betting market remains alive. When it finally happens, it will be a game-changer for the state and the nation.