Could California soon see online casinos? In November, the matter will be brought before the legal system to bring about a referendum!(Image from Steve @ pexels.com)
Trivia question – what is the largest and wealthiest state in the USA? And the answer is California. A place where online gambling is still illegal, but all that could change.
It required 1 million signatures to bring the subject of online casinos and sports betting back onto the table in the state’s senate, which a referendum backed by DraftKings, FanDuel and BetMGM achieved. It means iGaming would also be in the running alongside the sports betting initiative.
Currently, the Californian population stands at close to 40 million, while if the state was a country, it would be the fifth richest nation in the world.
Imagine if online casinos came to the state! Add the already legal markets of online sports betting, pari-mutuel betting, and DFS on top and we are talking about a possible $ 1 billion+ per month online gambling revenue alone. Just to get your head around this, I am not including the state’s land-based Tribal Casinos already operating, but online sports betting alone. It is a market that the iGaming and sports betting companies, DraftKings, FanDuel and BetMGM, are licking their lips over.
Moreover, Software providers such as Evolution (Red Tiger/NetEnt/BTG/Ezugi), Wazdan, and Pragmatic Play (all already licensed in some states in the US), will certainly be looking at the iGaming options while Playtech will be keeping a close eye on both sports betting and iGaming.
November 2022 Turning Point: Since the 1 million signatures from state voters are now in, the matter will now be brought in front of the California State Capitol in Sacramento. The idea is to allow the coalition of tribal peoples already operating land-based casinos in the state to run a Monopoly over the online gambling market – an approach that has shown tremendous success in the Wolverine State of Michigan.
Putting Californian iGaming into Perspective
We have already seen just how successful online casinos have become in Michigan, New Jersey, and Pennsylvania. The states have populations of 10 million, 9 million, and 13 million, respectively. Just to save you the effort of doing the maths, that’s 3 states with 8 million fewer people compared to The Golden State.
Here’s another whammy. In March 2022, iGaming across each state brought in $ 132 million (MI), $ 141 million (NJ), and $ 124 million (PA). A total of $ 397 million, give or take.
If we do the maths correctly, California’s population is 20% larger than these 3 states, so we can reasonably estimate online casinos in the state will earn 20% more per month than these 3 states. That’s an additional $ 79.4 million. Therefore, once the California iGaming is fully established, it would earn roughly $476 million per month in revenue. Moreover, this prediction is bearing in mind Michigan began in January 2021 and Pennsylvania in late 2019, these 2 markets are still not fully established. These markets still have more room to grow, so we are looking at possible figures of more than half a billion. $500 million.
Another interesting point to make is the tax dollars MI, NJ, and PA have recorded.
- Michigan (March 2022): $23,882,899 (State Tax) + $9,184,448 (Local Tax)
- New Jersey (March 2022): $21,098,258 (State Tax) + $3,516,376 (Local Tax)
- Pennsylvania (March 2022): $42,255,078 reported combined ‘State’ + ‘Local’ tax
With those figures in mind and the fact that finances in the US are now being tightened since the pandemic, tax dollars the state could earn will certainly have a huge influence on those who will be voting for or against the current bill against online gambling in the state to be reversed.
Competition Vs the Bill: There is currently some speculation as to how DraftKings, FanDuel and BetMGM will get involved though, as the proposal suggests these big 3 brand names will set up operations only in land-based casinos and horse racing tracks under the control of Native Americans. Yet, there seems to be a counter to this in a press release last month. The PR report refers to DraftKings, FanDuel and BetMGM as ‘out-of-state corporations’.
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