How California’s ‘Fair Pay to Play Act’ Could Shake Up The US Sports Betting Industry

• According to a 2012 study conducted by the National College Players Association and the Drexel University Sports Management Program, 82 percent of full scholarship athletes who live on campus and 90 percent of full scholarship athletes that live off campus live at or below the federal poverty level.
• California Senate Bill, CA SB 206, would allow collegiate athletes in the state to sign third-party endorsement deals and profit from the use of their names, images, and likeness.
• The State Senate passed CA SB 206 by a vote of 31-5. The bill now sits in the California General Assembly.

SACRAMENTO, Calif. – A little over two weeks have passed since the California Senate passed the landmark bill, CA SB 206, also known as the “Fair Pay to Play Act.” While this has raised concern for the NCAA, the bill’s momentum through the state legislature could prove to be monumental in the US sports betting industry.

CA SB 206 would essentially allow college athletes in the state of California to be able to be compensated for the use of their names, images, and likeness. College athletes will then be able to hire state approved agents to sign endorsements and other financial deals from third-party enterprises.

Any money that is accrued during their time in college would be put into a trust fund and can only be accessed once they either graduate or leave the university.

The proposed legislation would make it illegal for California universities to punish student-athletes for signing such deals and would not allow the universities themselves to pay their players directly. If signed into law this year, the new measures would not go into effect until 2023.

The Senate ultimately voted in support of this bill by a margin of 31-5. Backing came from both Democrats and Republicans and it now sits in the California General Assembly awaiting further action.

Most of the support came from Democratic officials in the Senate. Given the fact that Democrats hold a majority of the General Assembly and that CA Governor Gavin Newsom is a Democrat, many believe the Fair Pay to Play Act has a good chance to become law during this year’s legislative session.

But while the Act would only take effect in California, the implications of it would be felt across the country and across industries. The dynamic of power within college athletics would change and the opportunities for businesses, including sportsbooks in the U.S., would open up in a whole new way.

How This Affects The College Athletics Landscape

The bill, as it is currently stated, would prohibit California colleges that receive an average of $10 million a year in media rights revenue from withholding their players to the opportunity of profiting from their names, images, and likeness.

This means that schools such as USC, UCLA, Cal, and Stanford would be the top targets of this bill. By passing the bill, these schools would have a superior edge in recruiting players all across the country.

In theory, a top high school prospect from Alabama could go to play at one of these California schools and be able to earn money during their time in college. This presents a unique capability that no other collegiate athletic program in the country is currently offering.

Players such as Zion Williamson, who is expected to sign a major shoe deal as soon as he enters the NBA, would be able to instead sign those types of deals while still in college.

The NCAA, whose mission it is to create a balanced collegiate athletics environment, would then possibly have to step in one of two ways.

The first course of action they could take is that they could disband the state of California from the NCAA. However, given the amount of money that these programs generate to the NCAA, it is highly unlikely that they would risk losing this source of revenue.

The second option would be to take the Fair Pay to Play Act to court. The NCAA could then argue that the Act interferes with interstate commerce in terms of broadcasting and streaming rights, revenue distributions, ticket sales, and other factors that play into intercollegiate sports.

Although, a third option that is on the table would be to allow all schools affiliated with the NCAA to offer their student-athletes the same opportunity as that of players in California.

According to a 2012 study conducted by the Drexel University Sports Management Program and the National College Players Association, 82 percent of full scholarship athletes who live on campus and 90 percent of full scholarship athletes that live off campus live at or below the federal poverty level.

How This Affects The U.S. Sports Betting Industry

California schools with new high-profile athletes may also incite more media coverage on the East coast. More coverage means more sports bettors are aware of the games and are more willing to put action on games involving those athletes.

With collegiate athletes in CA being able to sign endorsement deals with third-party businesses, this opens the door for sports betting companies to use this law as a means to advertise their company.

Betting on collegiate sports is legal in every state that has approved the practice so far and more are looking to do the same in the near future.

Sportsbooks will also likely have to shift their betting lines when it comes to California schools. With more talent on those teams, you can expect to see a higher vig than normal. You can also expect to see more player props on college athletes playing in the state of CA as opposed to other schools.

Since these schools all play within the Pac 12, LegalSportsBetting.com thinks sports bettors across the country may also be more inclined to make bets that involve the conference.

There are many implications of this bill that add up to be a mountain of potential changes across industries. Given the current trajectory of how the bill has fared in the state legislature so far, it is easy to see these changes coming within the next few years.

News tags: CA SB 206 | California | Fair Pay to Play Act | National College Players Association | NCAA | Pac 12