New Jersey doesn’t allow its sports books to accept wagers on games involving Rutgers, Seton Hall, Princeton or any of the state’s other colleges or universities.
The ban hasn’t curtailed legal sports betting. In October, New Jersey sportsbooks took in a record $487.9 million in wagers, eclipsing September’s previous record by 9.5%.
California Indian tribes backing a statewide ballot referendum that would legalize sports betting have similar language inserted into the measure, which they hope to place in front of voters next year.
If approved, the change to the California constitution would allow sports wagering at Indian casinos and licensed racetracks, but would prohibit bets on sporting events involving California universities and colleges.
That means games involving Pac-12 powerhouses such as USC, UCLA, and Stanford would be off the board.
Jacob Mejia, vice president of public and external affairs for the Pechanga Tribe Development Corp., suggested that California voters would be more likely to support the initiative if the state’s schools were removed from the betting lines.
“California college and universities are important to voters, and they are important to us,” said Mejia. The Pechanga Tribe, which operates one of Southern California’s largest casino resorts, is one of 18 tribes backing the proposal.
“The opinions that matter most are those of California voters on November 3, 2020,” Mejia said.
Observers and interested parties worry that removing California schools continue to keep open the market for illegal and unregulated off-shore gambling sites and illegal bookmakers – the type of operations the legal gaming industry wants to diminish following the May 2018 ruling by the Supreme Court that opened the U.S. to legal and regulated sports betting.
NHL Commissioner Gary Bettman (l) and William Hill U.S. CEO Joe Asher at the AGA Sports Betting Summit in March 2019
“I’m not a fan of prohibiting wagering on in-state college teams,” said William Hill US CEO Joe Asher, whose Las Vegas-based company operates regulated sports betting in 10 states for casinos and racetracks, including New Jersey. “It makes it that much harder to compete with the black-market bookies who offer betting on them.”
Eilers Krejcik Gaming analyst Chris Grove agreed that “placing restrictions on college wagering puts the legal sports betting market at a fundamental disadvantage to illegal sportsbooks.”
Still, Asher admitted the referendum could gain additional voter support by eliminating bets on California universities.
“That is often a part of the political process, where compromise is necessary to get the votes required to pass legislation,” Asher said.
History
New Jersey’s language banning in-state college betting was inserted into the state’s 2011 sports betting voter referendum, which passed by a 2-to-1 margin and set the stage for the historic six-year legal battle that led to the Supreme Court ruling.
Thirteen states now offer legal sports wagering in casinos and racetracks. Six other states and the District of Columbia have legalized the activity but are still considering regulations before launching.
Delaware and Rhode Island prohibit wagers on colleges and universities in their respective states. Under its yet-to-be enacted law, Illinois has made in-state collegiate games off-limits to sportsbooks.
Nevada had a similar ban on games involving the University of Nevada, Reno and UNLV until 2001. At the time, the late Senator John McCain sought to remove betting lines of all college games from Nevada sportsbooks.
McCain cited the prohibition on Nevada schools. State gaming regulators, in response, changed the regulations and legalized wagers on UNR and UNLV.
Nevada benefits?
Brendan Bussmann, Global Market Advisors
The California prohibition wouldn’t allow in-state gamblers to bet on an in-state university, even if the team qualified for the National Championship or a high-profile bowl game, such as the Rose Bowl.
“The only people that win when you keep universities and colleges off the board is the illegal market,” said Global Market Advisors Partner Brendan Bussmann. “Are you really telling me that no one is betting on a USC/UCLA football game? That’s just a short side view. Even New Jersey today wishes that it did not have the restrictions that the ballot initiative from 2012 put on their market with Rutgers.”
#exclusive – Off-the-board: California sports betting proposal won’t allow wagers on in-state schools. –@howardstutz, CDC Gaming Reports. https://t.co/KGYCPZiFGP @WilliamHillUS #CDCgaming
— CDC Gaming Reports (@CDCNewswire) November 19, 2019
The winner under this scenario could be Nevada sportsbooks, which would continue posting lines on California teams. Casinos already count California patrons among their largest customer bases in Las Vegas, Reno and Laughlin.
Vinny Magliulo, vice president of corporate relations for Las Vegas Dissemination Company, who has managed Strip sportsbooks, said California gamblers will still flock across state lines, “as long we expand offerings across the board and continue to offer entertainment, dining, shopping and sports.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
