Nevada Sports Betting Faces Potential Competition From Cali

Written By Marc Meltzer on September 22, 2022 - Last Updated on September 29, 2022
Will Nevada gambling be impacted by California sports betting legalization?

Nevada was once the only home to legal sports betting in the US. That’s no longer the case.

States around the country started to legalize sports betting after the Professional and Amateur Sports Protection Act (PASPA) was repealed in 2018.

Casino and Nevada sportsbook operators have been paying attention to the potential competition. To date, they haven’t shown too much concern about the competition Nevada gambling.

The prevailing thought is that most states offering legal sports betting would just increase sports betting in Nevada. This has been largely true. Additionally, the option to stay home and bet isn’t keeping visitors from visiting Las Vegas, Reno, or Lake Tahoe.

Now California is considering legalizing sports betting. This could have an impact on Nevada casino and sports betting revenue.

Nevada sports betting revenue over the past few years

Nevada sportsbook revenue in 2021 was 69.4% greater than the previous year. The large increase was due, in part, to fewer events to wager on in 2020.

Overall, Nevada casinos won a record-breaking $13.4 billion from gamblers last year.

Gaming revenue in Nevada is different than in many states. Only 57.70% of Nevada casino revenue came from gambling last year according to a report compiled by UNLV Gaming.

That number is even lower at casinos on the Vegas Strip. Last year these casinos saw 48.03% from gaming. That’s the highest since 1999.

Gaming was responsible for between 35-45% of the overall revenue for the previous 20 years.

The notion that “rising tides lifts all boats” might be accurate through the first few years of legal sports betting outside of Nevada.

As sports betting continues to grow in popularity around the country there’s more mainstream media coverage and more sports bettors. These tourists are still visiting Nevada to eat, drink, gamble, see shows and enjoy the other amenities not available at home.

California visitors are important to Nevada’s bottom line

There’s always been one state that concerns sportsbook operators in Nevada. While Nevada locals wager on sports, tourists visiting Las Vegas and Reno from California are also important to the bottom line.

According to the most recent Las Vegas Visitors Profile, 30% of people visiting Sin City last year were from California. That’s an increase from the previous two years when the number of visitors from California was 23% and 21%, respectively.

Many of these visitors are wagering on their favorite sports teams. Northern Nevada typically sees wagers on San Francisco and Oakland teams. Las Vegas sees more betting on teams from Los Angeles and San Diego.

If California legalizes sports betting it’s possible that the amount of money wagered on sports from the state would decrease.

California is considering two different sports betting options that could possibly have a small impact on Nevada’s economy.

California sports betting propositions

Sports betting is now legal in 30 states around the country. There are more still considering how and when to make this legal.

California residents will have two options to legalize sports betting this year. On election day, Californians can vote for or against propositions 26 and 27.

The two propositions take a different approach to legalizing sports betting in California. On the surface, one might have more of an impact on visitation to Nevada to bet on sports.

California Prop 26

Prop 26 would only allow in-person sports betting at tribal casinos and horse racing venues in California. If voters approve this proposition, online and mobile sports betting would not be permitted in California.

Additionally, Prop 26 would not allow wagering on California’s college sports teams. Anyone looking to wager on UCLA, USC, or Stanford games would still have to visit Nevada.

This proposition would also allow the tribal casinos to offer traditional dice and roulette games unrelated to sports betting.

California Prop 27

Prop 27 would bring online and mobile sports betting to the entire state. If this proposition is approved anyone of legal gambling age could wager on sports from a computer or mobile device from any location within California state lines.

Each online sportsbook operator (DraftKings, FanDuel, etc.) would have to partner with a federally recognized Indian tribe. While the online sportsbook operators and Indian tribes are fighting against each other now, it’s possible the two parties might want to work together in the future.

Will either proposition impact Nevada casinos?

Both propositions could impact Nevada casinos and sportsbooks. The access to online and mobile sports betting in Prop 27 would likely have more of an effect on the Silver State.

Prop 26 would limit sports betting to the 66 tribal casinos and four horse racing venues located throughout California.

Prop 27 would make online and mobile sports betting accessible to anyone of legal gambling age located anywhere in California. This proposition will allow more people access to legal sports betting.

If online and mobile sports betting were legal throughout the state, California residents could just stay home for major events they might visit Nevada casinos to wager on.

For example, it would be less expensive to attend a Super Bowl party close to home in California to watch and wager on the game than it would go visit Las Vegas for an event. The cost to drive or fly plus hotel and party costs are significant enough that some would stay home.

This is already happening to a lesser extent in other states. However, the warm weather of Las Vegas is still a draw for many bettors in colder climates in other time zones.

There wouldn’t be weather envy from Californians. The state has plenty of cities with comfortable weather throughout the year.

Millions of Californians visit Nevada casinos each year despite the 66 casinos located throughout the state. It doesn’t seem likely that offering sports betting in those casinos would change visitation too drastically.

Sure, some will stay closer to home if Prop 26 is chosen. Sports betting would just be another item on the California casino gaming menu.

The online and mobile sports betting in prop 27 would make it fiscally responsible for some gamblers to skip Sin City to bet on the biggest sporting events.

Photo by Marek Masik/Shutterstock
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Marc Meltzer

Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. Marc is a freelance writer and social media consultant. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.

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