California and Texas Hesitate on Legalizing Sports Betting

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00:00California and Texas are the two markets that will probably benefit the most from CalSheet

00:04because there is no legalized sports betting.

00:07And Sam, it looks like the future for California is even murkier.

00:10Not that there's any sports betting discussion going on right now,

00:13but sweepstakes discussion and contests are being put out there.

00:17And if those can't be passed through or made illegal, I don't see sports happening anytime soon.

00:22Yeah, definitely not.

00:23Sweepstakes is very similar to that sports prediction market conversation,

00:27which is another industry that is kind of regulated a certain way to not be governed or regulated as sports betting.

00:36These online casinos or online sports books that will have two forms of currency you can play with.

00:43One you buy, and when you buy that one currency, you then get a free version of that currency,

00:49or you're gifted by the company, which you can then use to play slots, casino games, bet on sports.

00:55And in turn, if you win on that, then you get paid out real money.

00:59So, you know, a mechanism to kind of use a third party or a middleman where it's not technically sports betting.

01:04And that's been one of the reasons it's been such a popular new kind of vertical in this space to reach states,

01:10you mentioned, like California, where there isn't sports betting.

01:13But unfortunately for those companies, it's being cracked down on,

01:16and it's much easier to crack down on this than it is to do prediction markets,

01:20which, you know, is tied up in the courts, there's the feds involved.

01:22You know, California just this week passed a bill that was signed by Governor Gavin Newsom

01:28that officially makes these types of sweepstakes models illegal in California by January 1st,

01:34which I think is pretty telling that they're still fighting the sports prediction industry.

01:38They're still fighting the daily fantasy sports industry, which, you know,

01:42the attorney general has come out and said,

01:43this is sports betting, but those companies continue to operate.

01:46They were really able to kind of effectively just eradicate sweepstakes in the space.

01:51And that comes from a lot of the same reason that sports betting hasn't been legalized yet.

01:54It's the state's native tribes, which hold a tremendous power over gaming in the state

02:00and influence in the legislature.

02:02They came out really hard against sweepstakes casinos,

02:05and they were able to get the entire legislature to vote unanimously to ban them,

02:10and then the governor also on board to sign them.

02:12So sweepstakes, dying in California, but you still have sports predictions.

02:16You still have fantasy sports in the meantime,

02:18and who knows when sports betting will ever get there.