Nevada Sports Betting Faces Potential Competition From Cali

Legal sports betting in the US was once only allowed in Nevada. However, that is no longer the situation.

After the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018, states across the country began to legalize sports betting.

Casino and Nevada sportsbook operators have been monitoring potential competitors. So far, they have not expressed significant worry about the competition in Nevada’s gambling scene.

The common belief is that legal sports betting in most states would simply boost sports betting in Nevada, a notion that has largely proven to be true. Furthermore, the convenience of betting from home does not deter visitors from traveling to Las Vegas, Reno, or Lake Tahoe.

California is currently contemplating the legalization of sports betting, which could potentially affect the revenue of Nevada’s casinos and sports betting.

Nevada sports betting revenue over the past few years

In 2021, Nevada sportsbook revenue increased by 69.4% compared to the previous year. This substantial rise was partially attributable to a decrease in the number of events available for betting in 2020.

Last year, Nevada casinos broke records by winning $13.4 billion from gamblers.

According to a report by UNLV Gaming, only 57.70% of Nevada’s casino revenue last year came from gambling, a figure which sets it apart from many other states in terms of gaming revenue.

The percentage is even lower at casinos located on the Vegas Strip. Last year, gaming accounted for 48.03% of their revenue, marking the highest rate since 1999.

Between 35-45% of the total revenue for the past 20 years was attributable to gaming.

The idea that “rising tides lifts all boats” could be true during the initial years of legal sports betting outside Nevada.

The popularity of sports betting is on the rise across the country, leading to increased mainstream media attention and a rise in sports bettors. Despite this, tourists continue to flock to Nevada to indulge in eating, drinking, gambling, watching shows, and enjoying other amenities they can’t find at home.

California visitors are important to Nevada’s bottom line

One state has always been a concern for Nevada’s sportsbook operators. Not only do Nevada locals bet on sports, but tourists from California visiting Las Vegas and Reno also significantly contribute to the profit margins.

The latest Las Vegas Visitors Profile reveals that last year, 30% of visitors to Sin City hailed from California. This is a rise from the preceding two years, when the proportion of California visitors was 23% and 21% respectively.

A significant number of these visitors place bets on their preferred sports teams. Teams from San Francisco and Oakland are typically bet on in Northern Nevada, while Las Vegas sees a higher amount of betting on Los Angeles and San Diego teams.

Should California legalize sports betting, it’s plausible that the state’s total amount wagered on sports may decrease.

California is contemplating two distinct sports betting alternatives that could potentially slightly affect Nevada’s economy.

California sports betting propositions

Betting on sports is currently legalized in 30 states across the nation, with several more states contemplating the process and timing of its legalization.

This year, residents of California will have the opportunity to legalize sports betting by voting for or against propositions 26 and 27 on election day.

The two propositions suggest distinct strategies for legalizing sports betting in California. Superficially, one might appear to influence visits to Nevada for sports betting more significantly.

California Prop 26

If approved, Proposition 26 would restrict sports betting to in-person transactions at tribal casinos and horse racing venues in California. Online and mobile sports betting would be prohibited under this proposition.

Furthermore, Prop 26 would not permit betting on California’s college sports teams. Those wishing to place bets on UCLA, USC, or Stanford games would need to travel to Nevada.

This proposal would also permit tribal casinos to provide traditional dice and roulette games, which are not connected to sports betting.

California Prop 27

Proposition 27 aims to introduce online and mobile sports betting across the whole state. Should this proposition be approved, it would permit anyone of legal gambling age to place bets on sports via a computer or mobile device from anywhere within the boundaries of California.

All online sportsbook operators, such as DraftKings and FanDuel, are required to form a partnership with a federally recognized Indian tribe. Although there’s currently friction between these operators and Indian tribes, there’s a possibility that they may seek a collaborative relationship in the future.

Will either proposition impact Nevada casinos?

Both proposals could influence Nevada’s casinos and sportsbooks. However, Prop 27, which allows access to online and mobile sports betting, could potentially have a greater impact on the Silver State.

Proposition 26 would confine sports betting to the 66 tribal casinos and four horse racing sites spread across California.

Proposition 27 would enable anyone of legal gambling age in California to access online and mobile sports betting. This proposition would expand the accessibility of legal sports betting to more individuals.

If online and mobile sports betting were legalized across the state, California residents wouldn’t need to visit Nevada casinos to place bets on major events; they could do it from the comfort of their own homes.

For instance, attending a Super Bowl party in California close to your residence for game viewing and betting could be more cost-effective than traveling to Las Vegas for the event. The expenses involved in driving or flying, coupled with hotel and party costs, can be substantial enough to convince some to remain at home.

Other states are already experiencing this to a lesser degree. Nevertheless, the warm climate of Las Vegas continues to attract numerous gamblers from colder regions in different time zones.

Californians wouldn’t experience weather envy. The state boasts numerous cities with year-round pleasant weather.

Despite the presence of 66 casinos in California, millions of Californians still visit Nevada casinos annually. It is improbable that introducing sports betting in these casinos would significantly alter this visitation pattern.

Certainly, if Prop 26 is selected, some people will prefer to stay near home. Sports betting would simply become an additional option in the gaming menu of California casinos.

Prop 27’s provision for online and mobile sports betting could financially incentivize some gamblers to forego Sin City and instead place their bets on major sporting events from the comfort of their own homes or mobile devices.