Is Online Sport Betting Illegal in California?
49 Pages Posted: 5 Jan 2022
Date Written: December 2021
In 2018, the United States Supreme Court declared unconstitutional a federal statute that barred states from legalizing sports betting. Since then over 20 states have enacted legislation permitting sports betting, in various forms, within those states. California has not yet joined that group of states, although not for lack of effort. The proponents of legalized sports betting in California have operated under the assumption that legislation, or a state constitutional amendment, is necessary to permit sports betting in California. What if that assumption is incorrect?
California law that makes sports betting illegal was developed over a century ago and that law and precedents are ill equipped to deal with modern technology that permits online sports betting. A reasonable argument can be made that online betting between California customers and out of-state sports betting platforms that are established and operate in jurisdictions that permit online sports betting is not illegal under California law, and thus, also not illegal under federal law.
This paper explores that argument by examining the relevant provisions of the California Constitution, California statutory and common law, and applicable federal law pertinent to online sports betting. The conclusion reached is that current law does not interdict online sports betting for two primary reasons. First, as written the laws simply do not reach the manner in which online sports betting is conducted in the world today. Second the consistent and persistent non-enforcement of sports betting laws against California recreational bettors supports the positions that such betting, on the customer’s part, is not illegal in California. And, as argued in the paper, if that position is correct, online betting in California by California customers cannot support either a state or federal prosecution against the customer or the out-of-state sports betting establishment that accepts the customer’s bet. California gambling law exerts a strong gravitational force but that force is unable to capture and retain the phenomenon of a properly structured online sports betting arrangement.
Keywords: Sports Betting, Gambling, Wagering, Bookmaking, Criminal Law, Civil Law
JEL Classification: K14, K23, K42
Suggested Citation: Suggested Citation