California's Gambling Landscape: Sports Betting and Online Casinos Remain Off-Limits

California stands as one of the few states in the U.S. that has not embraced sports betting or online casinos. The Golden State has maintained a cautious approach to regulating gambling activities, including online casinos, sports wagering, and sweepstakes. This regulatory vacuum has allowed verticals like prediction markets to flourish.

In 2022, California had a significant opportunity to advance sports betting with two proposals on the November ballot: Proposition 26 and Proposition 27. Both aimed to initiate regulated sports gambling but failed to secure enough support to progress. This marked the closest the state has come to implementing a unified sports gambling framework in recent years.

DraftKings and FanDuel made an attempt in 2025 to revive the sports betting issue, proposing a model that would ensure guaranteed minimum annual payments to each of California’s 109 federally recognized tribes. However, the tribal operators' strong interest in maintaining the status quo poses a significant challenge. With 109 federally recognized tribes, it is unlikely they would agree to a model allowing DraftKings and FanDuel to enter the state and partner with individual tribes.

Tribal casinos are a major economic driver in California, sustaining 184,701 jobs and contributing an estimated $34.6 billion in annual economic impact, according to the American Gaming Association (AGA).

In 2025, California Governor Gavin Newsom signed AB 831 into law, effectively outlawing sweepstakes-style gambling. The state has also taken issue with cardrooms, with California Judge Richard Darwin striking down new regulations that would have imposed heavy restrictions on player-banked blackjack-style casino games offered at the state’s cardrooms. There are about 88 cardroom venues in California, and they operate on a player-based model.

Prediction markets are not currently opposed in California, and the state seems to subscribe to the idea that the Commodity Futures Trading Commission should oversee the sector. However, as more states question the legality of sports event contracts, California may reconsider its stance.