California Gambling Laws: What Gambling is Allowed in CA?

California has many options for those who are interested in legal gambling, although sports gambling is not currently available in the state. While the US Supreme Court lifted restrictions on sports gambling in 2018 and many states followed with legalization, California has not yet followed suit.

Still, the state has a long history of card rooms, horse racing, a state lottery, and tribal casinos. Further, there was a push to place a constitutional amendment on the ballot in November of 2019 to legalize sports betting.

In the past few years, California has seen legislation proposing the legalization of online poker. California may be in the opening act of expanding gambling options in the state.

Does California Have State-Regulated Online Gambling?

California does not currently have state-regulated online gambling. While there have been attempts to adopt legislation in this area, so far, the state has not enacted laws regarding online gambling.

Legal Progress On Poker Gambling In California

In 2008, Assembly Member Levine introduced AB 2026 in the California State Assembly to perform a study on allowing intrastate poker. The study focused on regulatory oversight of online gambling, technology, economic benefits to the state, and the types of games that might be allowed, among other matters. Ultimately, the Assembly failed to pass AB 2026, and the study did not move forward.

Another bill was introduced in 2016 to legalize online poker. Assembly Members Gray and Jones-Sawyer introduced AB 2863, the Internet Poker Consumer Protection Act of 2016, to allow intrastate poker. Licensed operators would have been required by the Act to deposit $12.5 million into the California general fund while paying 10 percent of their revenues to the state. The Act also included a concession of $57 million to be paid into a fund for the benefit of California horse racing tracks. Unfortunately, the bill never went up for a vote.

Legal Progress On Sports Betting In California

There may be movement on sports betting in California in 2020, including online options. California legislators held a general informational hearing in January of 2020 in Sacramento on sports betting with representatives from online sportsbooks in attendance.

In addition, several of California’s Indian tribes filed a petition to place a measure for sports betting on the November 2020 ballot. That petition would limit sports betting to physical locations at tribal casinos and would not allow any type of online betting. The petition appeared to be well on the way to gathering enough signatures to appear on the ballot.

However, with the COVID-19 pandemic interrupting the collection of signatures, that began to seem uncertain. In June 2020, state legislators pressed pause on the bill. It will not be presented to the voters until November 2022.

Are Sweepstakes Allowed Under California Gambling Law?

Sweepstakes are legal under California law, although sweepstakes entities must be careful to meet the legal requirements for this type of contest. If the rules are not followed correctly, the contest could easily be construed as a lottery, which is illegal. The legal elements of a lottery are:

  1. Giving a prize to a winner.
  2. The contest is determined by chance.
  3. A person pays “consideration” to participate in the contest.

Courts construe “consideration” broadly. It is more than just paying a fee to enter the contest. Consideration can include requirements such as opening a bank account to participate or even filling out a lengthy survey.

The main difference between an illegal lottery and sweepstakes is the lack of consideration for entering the sweepstakes. In fact, any solicitation materials for a sweepstakes entry in California must prominently display a “clear and conspicuous statement” that there is no purchase or payment for entering the contest. As long as online sweepstakes sites follow the relevant regulations, California does allow them to operate.

See our guides to Sweepstakes Casinos and Sweepstakes Poker in California. 

How Do Tribal Casinos Work In California?

Thanks to a significant 1987 US Supreme Court ruling originating out of California, tribes may now operate tribal casinos on reservation lands throughout the country. The Supreme Court case overruled any restrictions on gaming on Indian reservations. In that case, two tribes (the Cabazon and Morongo Bands) were operating small bingo parlors and card rooms on reservation lands near Palm Springs. The State of California sought to close down the operations, stating they violated state regulations.

In its decision, the Supreme Court relied on its prior rulings from the 1830s that Indian tribes are independent political communities, thereby granting the tribes sovereign immunity. The Court held that since California did not prohibit gambling on a criminal basis, the state could not regulate gaming on reservation lands.

In response to that ruling, California voters approved Proposition 1A in 2000. Proposition 1A allows the governor to negotiate compacts with tribes on reservations in the state to offer various types of gambling. The State and tribes have since entered into a number of different compacts to permit gaming. As a result, there are now many tribal casinos operating in California.

See our Guide To Tribal Casinos In California

Do Tribes Offer Online Gambling?

At this time, tribes in California do not offer online gambling. As noted previously, attempts to legalize online poker have thus far failed. Tribes were pushing for a ballot measure for the November 2020 election to allow sports gambling, but only in physical tribal casinos. It seems this measure will not be put to voters until November 2022.

What Games Can Tribes Offer At Casinos?

Under the Indian Gaming Regulatory Act (IGRA) passed by Congress in 1988, tribal casinos can offer a number of different games defined by various classes. Class I games include games that are for minimal value and traditional forms of Indian gaming. They are only regulated by the tribes.

Class II games include bingo, lotto, and poker. In these games, the participants are competing against each other and not against the house. Tribes can offer as many of these games as they want. Class II games are not subject to regulation by the states.

The IGRA also allows tribes to offer Class III games. These include all other types of gambling like slot machines, electronic games of chance, and many banked card games like blackjack. To offer these games, the games must be legal under the state laws, and the tribe must negotiate a compact with the state to permit the games.

California negotiated some compacts with tribes, but many prominent Las Vegas-style games are missing. The State of California has previously held that craps, roulette, and dice-games based on chance are prohibited under the state constitution and laws. Thus, you will not see these types of games in California casinos. Many tribal casinos have come up with some interesting workarounds to offer substantially similar games.

Are All Casinos In California Tribal Casinos?

All legally defined casinos in California are tribal casinos. Some card rooms may contain the word “casino” in their names. Legally, they are not casinos but instead are regulated as California card rooms by state law.

How Do Card Clubs Work in California?

Card rooms in California allow players to gamble against each other instead of the “house.” At tribal casinos, the dealer working for the casino is also the banker, paying out winners and taking money from losers. This is different from card rooms. At most card rooms, an employee serves as the dealer, and an independent third party is the banker. The card rooms make money by assessing a fee on each hand.

What Games Do Card Clubs Offer?

Poker is the main game at California card rooms. Card rooms offer other casino table games like baccarat, pai gow poker, and blackjack, referred to generally as “California” games. These games are not played the same way as they are at casinos. Regulations require that the players take turns as the dealer. If a player does not want to deal, the dealer employee will take up the task. At a casino, an employee would be the dealer all the time.

Who Can Operate A Card Club?

A business that wants to operate a card room must obtain a valid state gambling license from the California Bureau of Gaming Control and the California Gambling Control Commission. The Bureau conducts a background investigation to see if the applicant is suitable for a license. The question of suitability is based on multiple factors, including:

  1. Honesty.
  2. General character.
  3. Reputation.
  4. Habits.
  5. Financial and criminal history.

The Bureau ensures that gambling activities are conducted honestly and free from corruption and other interference. All supervisors working for a card room must also have a license as a critical employee by the Bureau.

Currently, and since 1995, there is a moratorium on new card room licenses. There is hope that the government will lift this moratorium by 2023.

Betting On Horse Races In California

California has a long history of horse racing. In 1933, California voters approved Proposition 5 legalizing pari-mutuel wagering on horse races. Since then, several iconic venues for horse racing have been operating in the state. The California Horse Racing Board (CHRB) is the governmental body that oversees horse racing.

The CHRB is responsible for enforcement of a number of different regulations. In June of 2019, Governor Newsom signed a bill into law granting the CHRB the power to suspend horse racing licenses for the safety of the horses. The Santa Ana venue had been in the news for a high number of horse deaths in 2018 and 2019. The CHRB also enforces the rules related to wagering on horse races.

See our Guide To Horse Racing In California.

Legal Online Betting In California

Online betting for horse races became legal in California in 2002. It is known as advance deposit wagering. This process allows a participant to place funds in an account with a licensee. The participant then directs the licensee to place wagers on behalf of the participant.  The CHRB regulates advance deposit wagering both inside and outside of California.

Where Else Can You Place Horse Racing Bets?

Off-track betting is legal in California. California authorized satellite horse racing wagering in a law passed in 1984 and expanded in 1987. The satellite facilities offer off-track betting from horse races around the country. In addition, the state enacted legislation in 2007, allowing “mini-satellite” wagering facilities, as long as the location is not within 20 miles of another facility that offers betting. Card rooms may operate a mini-satellite facility.

The California State Lottery

California offers a state lottery. Proposition 37, passed in 1984, established the lottery. California voters approved the Proposition by a margin of 58 percent. It amended the California constitution to allow the state lottery to begin operating, with the first tickets sold in October of 1985.

Governor Schwarzenegger approved Assembly Bill No. 142 in 2010, which reallocated lottery revenues to maximize the benefit to public education. The bill also required 87 percent of revenue to be returned to the public in the form of prizes.

California began offering Powerball in 2013. Unlike other states participating in the Powerball, it offers pari-mutuel payouts for winners. A California Supreme Court case from 1996 upheld restrictions based on the California penal code that require the use of pari-mutuel payouts. As a result, a lottery winner in California may receive a different payout for a prize than a winner in other states.

Can You Buy Lottery Tickets Online In California?

A player cannot buy tickets online directly from the California lottery. Some services do offer the ability to purchase tickets online. These are known as courier services that buy the tickets on a participant’s behalf for a fee. They do not take any portion of the winnings. Further, neither the state nor the lottery endorses these services.

Who Regulates Legal Gambling In California?

A number of different governmental entities regulate legal gambling in California. The California Assembly and Legislature have the power to pass legislation impacting and authorizing new forms of gambling. The Bureau of Gambling Control and the California Gambling Control Commission regulate a lot of gambling activity in the state under a bifurcated system. The Bureau upholds the integrity of gambling in California. The Commission sets minimum standards for gambling in the state and grants licenses only for the appropriate individuals. These entities regulate the tribal casinos as well as card rooms.

As noted earlier, the California Horse Racing Board (CHRB) is responsible for regulating horse race betting. California established the CHRB in 1933. The governor appoints seven members to serve on the CHRB. The CHRB has broad regulatory authority over the horse racing industry. It regulates everything from the granting of licenses, to betting on races, to track safety.

With regard to the lottery, the governor appoints five members to the California Lottery Commission. The Commission approves the budget and business plan for the state lottery.

What Would It Take To Expand Gambling In California?

The California legislature needs to act to expand gambling in a meaningful way. Alternatively, a petition that would expand gambling could be put on the ballot. The main areas ripe for expansion are online poker and sports gambling. California may be more receptive to expanding in both those areas as it faces a severe budgetary shortfall due to the COVID-19 pandemic. Legislators may be looking at possible additional revenue to help during this uncertain time.

However, there are several different interests at play in the state. For example, it appears that tribal casinos want sports gambling only at physical locations, while other parties favor online options. The next few years will likely see movement and debate on the expansion of gambling in California. How this will play out remains to be seen.

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