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California may benefit from legalizing sports betting, state senator says

Roderick Wright supports a New Jersey lawsuit challenging federal law that limits the activity. Experts say legal sports betting could generate $1 billion in annual revenue for the state.

August 01, 2010|By Patrick McGreevy, Los Angeles Times

Reporting from Sacramento — Los Angeles gamblers may have bet big on their Lakers winning the NBA championship, but they could not do it legally in California, and the cash-strapped state did not get a piece of the action.

What if Californians could place such bets in the future without having to drive to Vegas or break the law by calling the local bookie? A state legislator who wants to legalize Internet poker says California should consider sanctioning sports betting too to help fill government coffers.

State Sen. Roderick Wright (D-Inglewood), who chairs the committee that oversees gambling, supports a lawsuit filed by New Jersey officials challenging federal law that limits sports betting to Nevada and a few other states. Wright said he might ask the Legislature to join the suit.

"If you took the sports book in Nevada and other places, it's a pretty healthy piece of money, and we currently don't get squat,'' Wright said. "I don't know how much longer we can afford to basically be providing the revenue to all these other states from California people.''

Under California law, it is a misdemeanor to bet on a sporting event. And the federal Professional and Amateur Sports Protection Act prohibits the state from sanctioning sports betting, according to Whittier Law School professor I. Nelson Rose, an expert on gambling law.

The lawsuit by New Jersey argues that the 1992 federal law violates the U.S. Constitution by allowing betting in some states but not others. Rose said the law has "major constitutional problems.''

On Wednesday, federal legislation that would legalize some Internet gambling in the U.S. was approved by the House Financial Services Committee. The measure, which gambling interests hope can pave the way for legal sports betting, would allow online poker bets with firms licensed by the U.S. Treasury Department.

It is widely estimated that more than $100 billion is wagered in the U.S., legally and illegally, on sporting events each year, according to Marc Lefkowitz, an expert at the UCLA Gambling Studies Program.

About $2.6 billion is bet on sports legally in Nevada, and the state takes a share with a tax on the profits of casinos where the betting occurs, according to Frank Streshley, a senior research analyst for the Nevada Gaming Commission. Last year, the tax brought in more than $9 million, he said.

California could reap much more, according to Rose. He said California could generate more than $5 billion in legal sports betting and about $1 billion in annual revenue for the state, depending on how much the state would take from the operators it would license.

European bookmaking firms have been lobbying California officials in favor of a Wright bill to legalize Internet poker, in hopes of eventually seeing sports betting made legal as well. The bill is on hold in Wright's committee while he tries to negotiate changes acceptable to Indian tribes that operate casinos.

Allowing sports betting could mean 10,000 or more jobs for California, said Breon Corcoran, managing director of the Irish bookmaking company Paddy Power, which would like to operate sports gambling in California.

"It's a curiosity to us that Nevada is really the only state where you can do [unlimited] sports betting in the U.S.,'' Corcoran said.

Lefkowitz said any effort to legalize sports betting in California would be fought by professional sports leagues that don't want the taint of gambling in states where they have franchises. Nevada and Delaware have no NFL or NBA teams, and different levels of sports betting are allowed there.

The National Football League does not want the federal or state law changed, according to NFL spokesman Brian McCarthy, because the organization considers gambling a corrupting influence.

"We recognize that many states have many pressing economic issues, but more state-operated single-game wagering presents a threat to the long-term health and integrity of our sport,'' McCarthy said.

patrick.mcgreevy@latimes.com

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