Is Sports Gambling Illegal In California

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With the exception of the day after the Major League Baseball All-Star Game, there’s a major sporting event every day of the year in this country. Whether your favorite sport is football, basketball, baseball, hockey, or even golf, there is always a game to watch. Sports fans know that this means there is no shortage of opportunities to make their favorite team’s matches a little more exciting.

The number of people engaging in sports betting is rising and California has got a large number of people interested in betting on sports. This will surely boost the economy of the state. The state of California can levy a tax on the service providers and make a big chump of money. Sports betting is illegal in California, while online gambling is limited to DFS betting. Even when sports betting is made legal in the state, it’s quite likely that Californians will need to travel to tribal casinos or racetracks to make bets in person. What is the California legal gambling age?

The question is: Is it legal to place bets on sporting events in California?

A Complicated Answer (PC 337(a))

The legal authority that controls betting on sports is a tangled web of federal and state laws. Though many states allow casino gaming and have state lotteries, gambling on sports exists in its own tightly controlled legal world.

First, there is a difference in the law between the person placing the bet and the person accepting the bet. The law is not the same for both parties in many states. In California, it is not illegal to make a bet, but it is illegal to take a bet, or operate as a bookie under California Penal Code Section 337(a).

In 1992, the federal government passed the Professional and Amateur Sports Protection Act, a law that prohibited sports betting in all but the four states where it was already legal: Delaware, Montana, Oregon, and Nevada. Congress controls interstate commerce, so it can prevent states like California from passing laws that would legalize betting on sports.1

The Online Picture

Another federal law, the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, makes it a crime for an online operator of a gambling website to accept bets using money from residents of the United States, but does not make it a crime to place those bets. The federal government has already won legal battles against offshore casinos like PokerStars, which was ordered to pay $547 million in a settlement with the U.S. government in 2012.2

There are still a number of offshore companies that have found creative ways to avoid running afoul of the federal law, but the risk for bettors is always that the site they use could be shut down before they can collect any winnings.

However, there is also an exception in the UIGEA for simulated games such as fantasy sports leagues. If the bet requires “knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events,” the bet is legal.3

Point Shaving and Bribery of Officials

There are a couple of areas where the law is definitely clear. Under California Penal Code Section 337, it is illegal for any person to bribe a participant in any sporting event to “not use his or her best efforts to win.” In other words, it is illegal for a person and an athlete to agree to rig the outcome of a game, and both the person and the athlete can be punished by a term in state prison and by a maximum fine of $5,000.

The same holds true for a person who bribes a referee or umpire, and for the referee or umpire who accepts the bribe. In those cases, the person and the official can be fined up to $10,000, and sentenced to a term in either county jail or state prison.

Is My March Madness Pool Illegal?

With all these restrictions, you are probably left wondering whether buying squares in a Super Bowl pool or a betting on a bracket in the NCAA basketball tournament is going to be something for which you can be sent to jail.

The truth is, though taking bets is illegal, enforcement of the law against individuals or even small groups of people is extremely rare because most bets between friends only result in the winner making money, and not a person taking a cut of the winnings for organizing the bet. In fact, it is not unheard of for these types of pools to spring up even in the offices of district attorneys, who are more concerned with breaking up large-scale operations that have links to organized crime than your bet with your friends.4

Contact the Attorneys at Wallin & Klarich to Learn More

Have questions about whether your gambling is violating the law? An experienced Wallin & Klarich attorney can help. We have been successfully defending people facing criminal charges for over 30 years. Contact us today for a free, no obligation consultation and let us help you, too.

With offices in Los Angeles, Sherman Oaks, Torrance, Tustin, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville, there is an experienced Wallin & Klarich attorney near you, no matter where you work or live.

Call us today at (877) 4-NO-JAIL or (877) 466-5245 for a free phone consultation. We will be there when you call.

1. [Mark Anderson, “Odds Too Long for California Sports Betting Bill,” Sacramento Business Journal, June 4, 2013, available at: http://www.bizjournals.com/sacramento/news/2013/06/04/california-sports-betting-bill-fails.html.]↩
2. [Nathan Vardi, “PokerStars Will Pay $731 Million To Settle U.S. Government Charges and Buy Full Tilt Poker,” Forbes, July 31, 2012, available at: http://www.forbes.com/sites/nathanvardi/2012/07/31/pokerstars-will-pay-547-million-to-settle-u-s-government-charges-and-buy-full-tilt-poker/.]↩
3. [Chris Smith, “Why Is Gambling On Fantasy Football Legal?” Forbes, September 19, 2013, available at: http://www.forbes.com/sites/chrissmith/2012/09/19/should-gambling-on-fantasy-football-be-legal/.]↩
4. [Daniel Roberts, “Was My Sports Bet Legal?” Fortune, February 15, 2011, available at http://fortune.com/2011/02/15/was-my-sports-bet-legal/.]↩

A proposal to legalize sports betting in California that could generate billions of dollars in tax revenue—but threatens the tribal monopoly on gambling in the state—has erupted into a political wrestling match as the bill awaits a key vote in the state Senate.

SCA-6 (Senate Constitutional Amendment 6) would legalize online and mobile sports betting, as well as legitimizing the state’s operating cardrooms—two elements vehemently opposed by the Native American tribes.

“Solving the battle between the tribes and the cardrooms is, one could say, almost as tough as solving Middle East peace,” Sen. Bill Dodd (D-Napa), who proposed the bill, told The Epoch Times.

Dodd first proposed SCA-6 in June 2019 to bring illegal sports betting out of the shadows and generate needed money for the state. The bill currently awaits a June 23 hearing and a vote before the state Senate Appropriations Committee before moving on if it passes.

Also known as the California Sports Wagering and Consumer Protection Act, the bill would require a two-thirds majority vote in the state legislature to become a ballot measure for voters to resolve in the Nov. 3 general election.

Native American tribes, which own and operate casinos on their lands throughout the state, are attempting to get their own initiative on the ballot which would legalize sports betting only at their casinos and the racetracks, without mobile wagering.

“It’s become clear that they don’t want the [SCA-6] bill, and they don’t even want to talk about the bill,” Dodd said in a June 16 interview.

Earlier this month, a coalition representing 25 California tribes sued the state, seeking a 90-day extension to qualify their own ballot initiative. The suit argues that the tribes were unable to garner the necessary signatures to get their initiative on the ballot due to delays caused by the COVID-19 pandemic.

The Coalition to Authorize Regulated Sports Wagering filed the lawsuit against California Secretary of State Alex Padilla on June 9 in Sacramento County Superior Court.

More than 20 states have legalized sports betting since 2018, when the U.S. Supreme Court overturned a federal ban on the activity. California voters would have to support a ballot measure to change the state’s constitution to allow sports wagering in the state.

A Revenue Windfall

The legalization of sports betting in California could bring in $200 million to $300 million in tax revenue in the first year alone, $500 million in the second year, and between $800 million and $1 billion annually when the market is mature, Dodd said.

Dodd’s proposal would allow tribal casinos and the state’s major horse racetracks to operate sports wagering at their establishments and via mobile phone apps. It would require strict third-party age and identity verification.

So far, the tribes have refused to come to the table, Dodd said—and a major sticking point concerns online and mobile betting.

“They don’t want online [sports betting], and unfortunately, online is about 80 to 85 percent of the market,” Dodd said. “The state really doesn’t realize anything if we only have bricks-and-mortar.”

In his May budget revisions, Gov. Gavin Newsom, facing a $54 billion budget shortfall for 2020–21 in the wake of the COVID-19 pandemic, urged legislators to find new sources of revenue, and warned massive spending cuts are on the horizon.

The bill would also allow the governor to negotiate a cut of banking and percentage games, such as craps or roulette, which are currently not legal in the state, but would be allowed at the casinos if the proposal passes.

Tribal Casinos Argue Against the Bill

James Siva, chairman of the California Nations Indian Gaming Association, and Edwin Romero, chairman of the Barona Band of Mission Indians, representing dozens of tribes, strongly opposed SCA-6 at an earlier Senate Appropriations Committee hearing on June 9.

Siva called SCA-6 “a bill that seeks to reward elicit practices at the state’s commercial, for-profit cardrooms and hide behind the tribes and the COVID-19 crisis to reach that end.”

Illegal

“Allowing commercial cardrooms to continue what are currently illegal practices is essentially rewarding these businesses for bad behavior, which is a non-starter in any discussion regarding gaming expansion in California,” Siva wrote in a May 31 letter addressed to Dodd.

The tribes have faced competition for business from the cardrooms, which offer player-backed games instead of house-backed games. The tribes believe the cardrooms should not be allowed, and allegedly hide profits to avoid taxes.

The letter called online gambling “extremely problematic for the Tribes” and stated it is “a practice that our organization opposes.”

Under existing law, it’s questionable whether tribes could accept online wagers placed from outside tribal lands or could implement an effective system in time, which could mean tribes “could be shut out of the state’s online sports wagering market altogether,” Siva said in the letter.

“A robust Indian gaming industry also provides benefits beyond our reservations,” Romero said. In 2016, he said, Indian gaming in the state generated 124,000 jobs and $3.4 billion in “taxes and revenue-sharing payments to the federal, state, and local governments,” statistics confirmed by the bill.

The tribes also say the state has overestimated how much tax revenue online sports betting will generate, and that it would come too little, too late to ease the costs of the COVID crisis.

“By the time really significant funding comes in, the crisis will have passed—but the damage to local governments will remain and be codified into law,” Siva said at the hearing.

Dodd said he has suggested amendments to tribal leaders, but “they don’t want to discuss it” because they don’t like the online components.

“They’ve got a lot of power in the legislature, and a lot of goodwill that they’ve created over the years with their wonderful benevolence for many communities throughout the state of California. But, at the same time, I think that perhaps they’re thinking that they can win straight-up on a power play,” Dodd said.

Siva did not respond to recent requests by The Epoch Times for comment. His office referred to the May 31 letter as representing his viewpoint.

‘Too High a Societal Cost’

The letter cited problem gambling proliferation, underage gambling, and threats to established tribal brick-and-mortar facilities as serious concerns.

Even without legal barriers to tribal participation in the online sports wagering market, “we believe that online sports wagering imposes too high a societal cost,” Siva wrote.

Is Sports Gambling Illegal In California Now

But Dodd doesn’t think that underage gambling would be any worse than it is now with illegal sports betting, which he says is a $150-billion-a-year industry nationwide.

“With our ability and technology to be able to track people and understand their age and everything else, there are big time protections,” Dodd said. He cited Oregon, New Jersey, Pennsylvania, and Illinois as states with legalized gambling that “don’t have any problems.”

Is Online Sports Betting Illegal In California

“We’re trying to come up with a creative solution to bring significant dollars into the state of California,” Dodd said.

Dodd sent a list of proposed amendments to tribal leaders on June 16 that involve a staggered introduction of mobile gambling and additional restrictions for cardrooms. But the bill, as it now stands, is set to go before the Senate Appropriations Committee on June 23.