In November this year, residents of the US’s most populous state will vote on at least four initiatives that could make legal and regulated sports betting a reality.
One of these initiatives is driven by iconic betting groups FanDuel, DraftKings and BetMGM, and looks promising on the surface. Its wording allows for gaming operators and Native American tribes to offer sports betting online across California.
But there’s a catch. The requirements that operators need to meet in order to obtain a license are next to impossible for smaller companies.
For example, operators will need to pay a licensing fee of $100 million to do business in California. They will also need to be licensed in 10 other states or operating in five states and running at least 12 casinos. This clearly rules out practically all of the existing operators, bar the big ones, and leaves no room for startups.
Gambling analysts call the initiative “absolute nonsense.”
Prof. John Holden of Oklahoma State University told the Santa Cruz Sentinel: “I think what’s effectively happening is, basically, the 5 to 10 frontrunners in the market have decided ‘Alright, let’s ensure that there’s no one else who can compete by agreeing to pay these exorbitant license fees.’”
But those behind the initiative argue differently. They say that the license fee is simply one measure that ensures that significant revenue to fund homelessness, housing and mental health treatment is generated by California sports betting.
