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How Sports Betting Can Benefit California’s Economy


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  • The market for sports betting has reached nearly $5 billion this year.
  • UN reports increasing numbers in illegal sports betting, estimates $1.7T black market.

In 1992, the Professional and Amateur Sports Protection Act (PASPA) was passed which placed a federal ban on all sports betting. The decision was taken to protect sports players from being targeted by criminal gangs and to keep general members of the public safe from problem gambling.

PASPA proved incredibly effective in the following 12 years, but then, with the rise of the internet and online gambling it became unfit for purpose. Online gambling Service Companies from the UK and other places where online sports betting was legal, began to offer their services to betting starved Americans.

That’s why, in 2018 the Supreme Court took the decision to strike down PASPA and thus lift the federal ban on sports betting. Since then a number of states have moved to legalise sports betting to allow their citizens to make popular Moneyline bets on certain NFL odds for teams like the Jackson Jaguars priced at -340 or even place outrights on NBA markets.

On November 8, Californians will be asked to go to the ballot to vote on Proposition 27 which would allow online and mobile sports wagering outside of tribal lands. An awful lot has been said on both sides of the argument, some of it true, some of it partially true and some parts of it, completely untrue.

In this article, we take a look at what the real benefits would be to California’s economy from legalising online sports gaming. Read on to find out what they are.

More Jobs and Less Homelessness

One popular argument at the moment is that the implementation of legal sports betting in California will help combat the homeless crisis, but is that really the case?

Well, it’s complicated. The easiest place to start is with the increase in jobs. Undoubtedly, legalised sports betting in California would see a big increase in jobs, not just directly but indirectly as well, so it’s possible that Proposition 27 would help a large number of people into the job market.

Where it gets complicated though is in terms of tax revenues. If the industry brings in $500 million in revenues then it’s more than likely that a large percentage of the taxes collected on those revenues could be used to address the homeless issues in the state.

That all depends on how much the industry actually generates and how state decision makers decide to spend those tax dollars. The latest evidence from other states where sports betting has been legalised, seems to suggest that industry is more than capable of exceeding even the most optimistic of estimates.

Economic Stimulation

Prior to the striking down of PASPA it was estimated that Americans were wagering $50-60 billion a year with overseas online gambling companies. That was all money that was going out of the American economy and into foreign countries economies.

If that was happening back then, what do you think Californian sports betting fans are doing right now? They’re making wagers with sports betting sites based out of states where it is completely legal, and thus sending their money out of the local economy.

Of course, if Proposition 27 is passed there will be plenty of companies from outside of the state offering their services to Californians, but there will also be plenty of home-grown sports betting sites.

Their success will have a direct impact on our local economy, providing a much-needed stimulus after the past few years of economic turmoil.

Wider Economic Benefits

Not everything in life is black and white and that’s particularly true when it comes to business. The passing of Proposition 27 won’t just have an impact on the gambling industry, it will also have a ripple effect on a number of other industries.

Advertising agencies will report increased revenues, California based sporting franchises will be able to partner with sports betting companies. The housing market will receive a stimulus as workers employed by the industry look to upgrade their living situation or move closer to their workplaces.

Tax money currently spent of gambling enforcement laws will be freed up to be used in other areas and there will be jobs created by the creation of new government departments to monitor the industry.

Reduce Corruption in Black Market of Gambling

The United Nations Office on Drugs and Crime (UNODC) has released a new report that highlights the increasing numbers of people engaging in illegal sports betting. The report estimates that the global black market for sports betting is worth around $1.7 trillion. This is a huge increase from the $155 billion that was estimated in 2009. The UNODC says that the increase is due to a number of factors, including the growth of online betting, the proliferation of illegal.

In short, there will be big and small benefits to almost every area of the economy if Proposition 27 passes.

In Summary

Don’t believe everything you hear or read when it comes to the arguments for and against Proposition 27. Make up your own mind and make sure that you fact check everything you read (including the claims made in this article!)

An informed decision made on November 8, whichever way it falls, is better for California than a rushed one.

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