California is home to a wide range of legal gambling options. This includes horse racing, off-track betting, a state lottery, card clubs, tribal casinos and charitable gaming. There have been several attempts to expand those options in recent years, including online gambling and sports betting.
Sports betting has been a particularly active topic of discussion in California of late and a variety of proposals to legalize the activity have been introduced in recent years. Recent proposals have focused on legalizing retail sportsbooks at racetracks and tribal casinos. Mobile sports betting has not been a major point of discussion to date.
The competing interests of stakeholders such as tribal gaming groups, cardroom owners and racetrack operators have made the legalization of sports betting a politically tricky issue. Similar issues have plagued online poker efforts, leaving California with a dearth of online gambling options despite broad political support for the concept.
Legal forms of California gambling today include:
- Horse Racing Betting: Trackside, off-track betting and mobile
- Lottery: Scratch-off and lotto sales at authorized retailers
- Slots, Video Poker and Table Games: Tribal casinos
- Daily Fantasy Sports Sites: Tolerated but not explicitly legal or regulated
- Poker and Player-Banked Games: Tribal casinos and card clubs
- Bingo and Raffles: Registered charities
Online Gambling in California
California online gambling options consist of horse racing betting and daily fantasy sports (DFS). Of those, only horse racing betting is explicitly legal. Daily fantasy sports contests are not addressed by current law, but major DFS providers have been operating in California for years with no legal blowback.
Advance Deposit Wagering
Advance deposit wagering (online/mobile racing betting) is regulated by the California Horse Racing Board. Mobile betting providers (also known as ADWs) must be licensed to offer their services to California residents. Most mainstream racing betting sites operate in California.
Daily Fantasy Sports
Daily fantasy sports sites operate on uncertain legal footing in California, but state authorities appear to have no desire to put a stop to the activity. Legislation to officially legalize and regulate DFS providers has been introduced several times in California, but none have made it through the full legislative process to become law.
Online Gambling Law in California
California law prohibits all forms of gambling that are not explicitly legal and regulated by the state. This means all forms of online gambling except parimutuel horse racing betting are effectively outlawed (minus an exception for fantasy sports, which are not treated as gambling under most interpretations of state law). Online horse racing betting is open to residents 18 or older.
Aside from mobile racing betting, state law does not specifically address online gambling. CA Penal Code § 330 provides a blanket prohibition of unregulated gambling as follows:
Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, seven-and-a-half, twenty-one, hokey-pokey, or any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor, and shall be punishable by a fine not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment.
Bills to legalize sports betting, fantasy sports and online poker have all been introduced in the legislature at various points, but all have failed to pass.
California casinos come in two distinct flavors. First, there are traditional casinos with a standard range of games operated by tribal groups on reservations. Tribal casinos operate slots, video poker, live poker and table games that involve cards. Games involving roulette wheels, dice and so on are not allowed.
In addition to traditional tribal casinos, California law allows commercial card clubs that may offer live poker and table games banked by players. Under state law, the house may not have an interest in the outcome of any game.
California Card Rooms
California’s card rooms are some of the oldest legal gambling institutions in America. These days, larger cardrooms are not the norm. Most of California’s roughly 89 cardrooms are now smaller operations as publicly owned corporations are prohibited (pg. 4) from investing in card clubs.
Regulations of card rooms were historically a local affair, and state regulation really took hold in the mid-80s. With the flow of information really taking off in this period, it made sense to crack down on criminal gambling activity on a statewide level. These efforts solidified in 1998 with the passage of the Gambling Control Act.
Casino Law in California
Modern tribal gaming was established through the passage of Proposition 1A, which California voters approved by a nearly two-to-one margin. Some tribal groups already had limited casino in operation at the time but were limited to offering video lottery machines and player-banked card games.
The passage of Proposition 1A in 2000 paved the way for a massive expansion of tribal gambling. Today, California casinos may offer slots, video poker, house-banked games and percentage card games (which are games in which the house has no interest in the outcome but collects a rake).
The minimum gambling age at tribal casinos is 18, but casinos with alcohol licenses must set the minimum age at 21.
- Taking reasonable actions to ensure that no ineligible, unqualified, disqualified, or unsuitable persons are associated with controlled gaming activities;
- Assessing and acting upon certain restricted transactions, including ownership changes and lending arrangements;
- Taking reasonable actions to ensure that gambling activities take place only in suitable locations;
- Granting temporary/interim licenses, permits, or approvals on appropriate terms and conditions;
- Developing and implementing regulations pursuant to the Gambling Control Act; and,
- Adjudicating recommendations concerning license denials or revocations or disciplinary actions.
If players choose not to deal, card rooms may hire third-party dealers to occupy the dealer spot. This aspect of the law has been the subject of no small amount of controversy as tribal gaming groups seek to prohibit the use of third-party dealers. All California card clubs must have the approval of their local municipal governments to operate.
Sports Betting in California
Sports betting is illegal in California. Several bills to legalize and regulate sports betting have been discussed, but progress has been slow due to competing interests. Further complicating matters and slowing the pace of progress is the fact that legalizing sports betting will require a constitutional amendment that must be approved by voters.
The American Gambling Association estimates that online sports betting brings in $154 billion annually nationwide via offshore betting operations. California’s contribution to this figure is vast, and there have been several legislative efforts to authorize, regulate and tax online betting in the state.
Assemblyman Adam Gray said it best in an interview with KCRA:
“The choice is not ‘should we have sports wagering or not have sports wagering.’ We do have sports wagering.”
A frequent proponent of gambling legislation, Gray continued:
“You could see tax revenue as high as a $100 million or $200 million a year to the state general fund if we authorize sports wagering.”
The Supreme Court’s overturning of PASPA represents one less hurdle in making online betting and legal sports betting a reality in California.
The odds of sports betting being legalized at some point appear favorable because clearly there is demand among lawmakers and various stakeholders. However, the pace of progress will continue to be slow as tribal groups, card room operators and racetracks all jockey for position and push legislation advancing their interests.
Sports Betting Laws in California
CA Penal Code § 337a prohibits all forms of bookmaking. First offenses are punishable by up to one year in prison and a fine of up to $5,000. The fine grows to as high as $15,000 if a defendant is a habitual violator, meaning there are at least two previous convictions of the same bookmaking crime.
The crime includes those accepting bets, collecting or paying money, or any other employment related to illegal sportsbooks in California.
Any future sports betting legislation will have navigated California’s varying interest groups. As it stands, California’s tribes have the exclusive right to operate casinos. Therefore, any new sports betting or online gambling legislation would have to come to terms with the 109 federally recognized tribes within California’s borders.
California Nations Indian Gaming Association Chairman Steve Stallings made it clear where his organization stands on the issue:
“California voters have, on numerous occasions, confirmed the exclusive right of California tribal governments to operate casino-style games. Legalization of sports betting should not become a backdoor way to infringe upon exclusivity.”
Proposed sportsbook legislation would essentially have to expand the tribes’ existing operations to get the fast track in Sacramento. But who better than the California tribes, with almost 2 decades of modern gambling management and operations experience in the state, to implement the state’s first sportsbooks?
When it comes to online gambling, the tribes have been much more reluctant to embrace change. They have seen advances as direct competition to their brick-and-mortar operations. With heightened geo-location tracking coming online, California tribes with casinos will likely push for legal online and mobile options that can only be utilized when somehow tied with the existing physical casino.
Again, it cannot be overstated enough, and no new legislation will pass without the cooperation of the California tribes that have relied on gambling for 19 years. A right-of-first refusal could also address the exclusivity issue and still leave room for the potential of future commercial operators.
One rising tension is between California’s tribes and card room owners. The tribes claim California card rooms are given more enforcement leeway in terms of the games they offer. In turn, the tribes say this is cutting into their operations and the exclusivity agreements found in the compacts they have signed with the state.
The feud between California’s tribes and cardrooms culminated in multiple tribes suing the state over what they claim infringements on tribal exclusivity agreements.
Poker in California
Poker is legal in two forms in California. Card clubs may spread poker and other community-banked games using cards like Pai Gow Poker and baccarat. Tribal casinos may also spread live poker. All games are permitted if the rules are on file.
Poker Laws in California
Poker is covered by two laws in California. Card clubs are authorized through a gambling exception for games banked by players or in which players take turns acting as the dealer.
The Gambling Control Act (BPC Chapter 5) and accompanying regulations allow card clubs to charge a fee for poker and other non-banked games but not charge a rake as a percentage of the pot. In practice, card clubs tend to charge a small fee during each hand.
A moratorium on the establishment of new card clubs in California has been in place since 1995 and is set to expire on January 1st, 2023 absent action from legislators. This does not apply to tribal poker rooms.
Home Poker Games
California law provides an exception for home poker games that meet certain requirements, but anyone considering hosting a social poker game should speak with an attorney before proceeding. CA Penal Code § 337j states that it is unlawful to “deal, operate, carry on, conduct, maintain, or expose for play in this state any controlled game” without first acquiring all necessary licenses.
The law further defines “controlled game” as “any poker or Pai Gow game, and any other game played with cards or tiles, or both, and approved by the Department of Justice, and any game of chance, including any gambling device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance.”
However, the law provides an exception to the definition of “controlled game” as follows:
(D) Games played with cards in private homes or residences, in which no person makes money for operating the game, except as a player.
This appears to permit private poker games as long as the house does not take a rake, charge an entry fee or sell snacks, drinks, etc. Again, anyone considering hosting a private game should speak with a gaming attorney prior to hosting the game.
Fantasy Sports in California
The nation’s major daily fantasy sites all accept customers from California. State bookmaking laws include operating “sports pools” as a crime, but it appears DFS operators do not consider their product to fall under that category and are actually considered contests of skill.
Despite the uncertain legal footing, major DFS operators offer their product openly in California and have not been ordered to cease and desist. California residents can safely assume it is safe to participate in fantasy contests hosted by mainstream providers such as FanDuel and DraftKings.
Fantasy Sports Laws in California
California law does not specifically address fantasy sports. Existing laws that prohibit sports betting and “selling pools” have never been leveraged to put an end to the operations of the major fantasy sites that operate in California.
The California Lottery launched in 1984 and provides funding to public education across the state. Lottery players can visit any authorized retailer to purchase entries to draw games and instant win scratch games. Online ticket sales are not authorized at this time.
Intrastate California Lotto Games
- Daily 3
- Daily 4
- Daily Derby
- Fantasy 5
- Hot Spot
Interstate California Lotto Games
- Mega Million
California Lottery Law
Voters approved the creation of a state lottery by approving Proposition 37 in 1984 by a healthy 58-42 margin. The passage of Prop 37 allowed the legislature to implement the California State Lottery Act of 1984, which established the legal framework under which the lottery operates.
State law dictates that money raised by the lottery support public education through the California State Lottery Education Fund. To date, the lottery has transferred billions of dollars to educational efforts on lottery sales of roughly $5 billion per year.
Lottery players must be at least 18 years of age.
California Horse Racing Betting
Parimutuel horse racing betting was the first form of gambling to be officially legalized in the state. California is home to 6 major racetracks and roughly 30 off-track betting facilities. Off-track betting facilities, or OTBs, are brick-and-mortar operations that allow betting on races held in-state and out-of-state via simulcasting agreements with other tracks.
Casinos and the occasional state fair may also operate OTBs. What’s more, Californians can also bet on horse races online and via mobile devices through sites such as TwinSpires, BetAmerica, and TVG.
A full list of racetracks, OTBs and authorized advance deposit wagering (online betting) operators can be found here on the California Horse Racing Board website.
California Racing Laws
Horse racing betting was authorized in California by the passage of Proposition 3 in 1933. Prop 3 established the original horse racing board to oversee the conduct of the industry and authorized in-person wagers placed at tracks.
Regulators later expanded the law to approve simulcast wagering, which authorized wagers placed at off-track betting facilities and via mobile apps. The horse racing industry pays to support the expenses of the regulatory board in addition to state and local taxes.
The minimum age to bet on horse races in California is 18.
Games of Skill
California gambling law leaves significant leeway for games that are based on skill rather than luck. BPC § 17539.1-17539.3 even details how contests played for money must be conducted in order to stay in line with the law.
California law does not address esports betting, but competitors wagering on their own games or paying entry fees to enter tournaments would most likely be considered legal under state law as long as the games being played are based on skill. Wagering on the outcomes of other people’s matches would fall afoul of laws against sports betting.
Skill-based Gaming Machines
Skill-based gaming machines were introduced in California tribal casinos in 2017. These are found at many properties that offer slots in California. Games that require a wager to play and that return prizes are heavily regulated, but amusement-style games that offer free plays are permitted at locations other than casinos.
CA Penal Code § 330b(f) provides a limited exception for certain gaming machines that are based on skill:
Pinball and other amusement machines or devices, which are predominantly games of skill, whether affording the opportunity of additional chances or free plays or not, are not included within the term slot machine or device, as defined in this section.
California Charity Gaming Laws
Charitable gaming is legal in California and the conduct of such is overseen either at the state or local level.
Charity bingo was legalized in 1976 with the passage of Proposition 9 and charitable raffles were approved via Proposition 17 in 2000. In 2015, lawmakers approved SB 549 allowing nonprofits to hold 50/50 raffles at major league sports games in which half the prize pool goes to charities and half is awarded as prizes.
Charity Poker Nights
Qualified nonprofit organizations that wish to host poker nights may host up to one fundraiser per calendar year and must register with the Bureau of Gambling Control prior to holding the event.
Nonprofits that wish to host raffles must register with the Registry of Charitable Trusts under the Attorney General’s office and dedicate at least 90% of their gross receipts to charitable purposes.
Charitable bingo games are governed at the city and county level in California. Nonprofit organizations that wish to conduct a charity bingo night are directed to contact their city or county for information.
California Gaming Regulator Directory
The following groups regulate gaming in California:
- Bureau of Gambling Control (card clubs, casinos and charitable gaming)
- California Lottery
- California Horse Racing Board