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At
the same time, these industries are reflective of
the uniqueness of California's political landscape
– they are entrenched "incumbents"
with cadres of lobbyists and advertising agencies
and political action committees that all work the
system. Or in the case of the horse racing industry,
they can't get along and develop a unified voice to
take to Sacramento, which just muddies the waters
even more.
The
stakes are high for online gambling in California.
With a population of nearly 40 million and among the
highest household incomes in North America, gambling
experts predict that the online market is bigger than
that of England, France and Spain combined, where
the online business has been flourishing for years.
Our
analysts at U.S. Digital Gaming have concluded that
the California gambling market could generate tax
revenue to the state of more than $5 billion over
a 10-year period. Worse, we have concluded that in
any given year, California is losing more than $600
million in state tax revenue to illegal online gambling
– largely through unlawful offshore operators.
This is not an insignificant amount of annual revenue
– it could fund UCLA each year, the state's largest
public institution of higher education.
Then,
there is the state's desperate need for revenue. Gov.
Jerry Brown's recently adopted budget tackled a budget
deficit of more than $26 billion, a jaw-dropping amount.
To put that in perspective, the state of Indiana's
two-year operating budget was about $28 billion.
California
is desperate for new revenue and the state is motivated
to avoid new cuts or more traditional tax increases.
In the last couple of years, a host of legislators
have floated online gambling bills, held high-profile
hearings and have made the talk-show circuits. Many
would align the interests of California's bricks-and-mortar
industries with an online presence, crafting a nearly
seamless operating and marketing system for the Golden
State gambling operators of various types. But no
single piece of legislation has crystallized among
the fragmented stakeholders or generated strong support
from the governor or legislative leaders.
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