Call it the Golden State, Cali, or simply California. The Golden State is the largest in the nation, with over 40 million residents. It seemingly has it all, including major tech industries, Hollywood, legendary sports teams, and incredible tourism. However, the one thing that keeps confusing residents and visitors is the solid state of its gambling laws.
California does have its share of local casinos, but it still hasn’t caught up with the other states in other gambling areas. This article breaks down the current state of California gambling and how it stacks up compared to other states.
- How California Became a Tribal Casino Powerhouse
When it comes to the fascinating world of land-based casinos, they come in two primary categories: commercial and tribal. The heart of commercial casinos like MGM and Caesars Palace are in Nevada and Atlantic City, but they can be in other states.
The biggest asset that California has in terms of gambling is the Tribal casinos. By far, California has the most of any state, with over 40 new projects getting approval. The rise of California Tribal Casinos is due to two main agencies – California Gambling Control Commission and California Bureau of Gambling Control.
These two agencies provide oversight for all of California’s gambling activities, including horse racing. With respect to the rise of Tribal Casinos into dominance, this is due largely to the birth of The Bureau of Indian Affairs, a federal agency enacted by Congress in 1989.
Before the birth of The Bureau of Indian Affairs, Native American tribes were extremely limited in economic opportunities. At best, California only had limited bingo and raffle halls, which had to operate for some form of charity or non-profit to operate legally.
By the end of the 1990s, California passed Proposition 1A, amending California’s Constitution to allow Native American tribes to operate casinos on federally approved reservations. With that now legal, the 2000s saw an incredible flurry of tribal casinos springing up like Cache Creek in the Sacramento Valley.
With tribally-owned casinos in full swing in the 2010s, many lawsuits began as the tribes began competing against each other for market share and to protect their profits. With the rise of Tribal casinos, it has also created friction with commercial casinos entering the Golden State. The same applies to the major sports betting industries like DraftKings and FanDuel, which continue to pay millions to lobbyists to expand into the Golden State.
- California’s Unique Gambling Laws
The legendary California Gold Rush in the 1850s really brought the concept of organized gambling to the forefront. Before and after, there were plenty of Native American tribes who unofficially organized their own forms of gambling. However, California, like most states at the time, frowned heavily on organized gambling to the point where they outlawed it in the state’s constitution.
It wouldn’t be until the early 1930s that California softened its stance slightly to support legal horse racing. To put that into perspective, the neighboring state of Nevada fully sanctioned gambling in 1932.
With the legalization of horse racing, the Golden State began generating dependent revenue. However, with the prohibition era in full swing and the desire to gamble like in Nevada, plenty of illegal gambling outfits began springing up.
By the close of the 1930s and the end of prohibition, California also softened its stance on gambling by allowing more card rooms to spring up. Card rooms became so popular that by the early 1950s, California sanctioned certain card rooms like poker games, but only under heavy supervision.
With the rise of Atlantic City casinos in the 1980s, the California government was under heavy pressure to legalize retail gambling. With Native American tribes suing their state and federal governments to operate casinos on their land for economic reasons, the tide for California retail casinos turned.
However, with the passage of the highly contested Indian Gaming Regulatory Act in 1988 and, ultimately, Prop 1A in California in 1999, organized casinos finally came to the Golden State. With the rise of American online casinos in 2012, mega states like California and New York have been put under new pressure to follow the lead of states like New Jersey and Pennsylvania.
Online gambling in the United States generates tens of billions annually in the seven states that sanction it. The first step towards legalizing California online sites came with a furious debate about online poker.
However, the measures for online poker and other online casino games in California failed in 2022 and 2023 measures. The same applies to sports betting, including online. Disputes with Tribal casinos about regulation and oversight ultimately doomed these measures. Also, advocates for problem gambling factored in heavily for the fall of online sports betting and casinos in The Golden State.
In conclusion, California is still making slow progress toward online gambling. The fact that there have been multiple ballots on these topics proves that the Golden State is inching closer to breaking down these barriers. New York is hoping that they finally legalize iGaming in their state. Should that happen, it’s a safe bet that California will shortly follow in their footsteps.