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The US is on the verge of losing its house edge after a push

The US is on the verge of losing its house edge after a push

The major online betting companies in the US, FanDuel, DraftKings, and BetMGM, are accustomed to profiting from one of the cardinal principles of gambling: the house always wins. However, on Tuesday night in California, despite a significant campaign to support the legalization of online sports betting, they were soundly defeated. 

With two-fifths of the precincts reported, Californians rejected Proposition 27 by an 83.4 percent to 16.6 percent majority, bringing to a close the most expensive referendum campaign in US political history, which was fought through a blitz of opposing 30-second television commercials.

The three biggest betting businesses donated almost two-thirds of the $169 million raised by the industry-backed “Yes on 27” campaign to sway voters. More than 50 local Native American tribes, who oppose the casinos because they are a crucial source of employment, spent $237 million to maintain the status quo. 

Dan Little, chief intergovernmental affairs officer, one of the largest gaming tribes, claimed that “these out-of-state firms have grown arrogant.” They “overplayed their hand” and lost horribly because they had the opportunity to cooperate with us.

With 15 major league sports teams and an economy nearly as large as Germany’s, California has long been a target for gambling entrepreneurs. 

According to estimates by Eilers & Krejcik Gaming, if the ballot motion had been approved, it would have created the largest sports betting industry in the US, with earnings of over $3 billion per year.

The defeat in California constitutes a significant setback for the developing sector after four years of rapid growth following the Supreme Court decision to strike a 1992 federal prohibition that forbade commercial sports betting. 

Currently, about 35 states have legalised sports betting, but the three states with the highest populations in the US—California, Florida, and Texas—have resisted. Beynon declared that “these big states would truly make a difference.”

Online casino gaming is the ultimate goal for the sector. Online gambling generates $135 in revenue per person in the US, which is 3.6 times more than online sports betting. However, only 11% of Americans have access to online gambling, compared to 40% who can place wagers on sporting events.

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