California is the latest state to set its sights on eliminating sweepstakes casinos from operating within state lines. Assembly member Avelino Valencia recently introduced Assembly Bill 831.
The stated objective of the bill is to amend the state’s existing laws so that it would prohibit all operation of online social casinos that offer sweepstakes versions of their casino games. With a sweepstakes casino, players play with and win virtual sweepstakes coins that can later be exchanged for prizes that can include sums of cash.
“Sweepstakes platforms sell virtual coins that are used to play casino-style games and can be redeemed for cash or prizes, essentially operating as unlicensed gambling businesses,” Valencia said. “By exploiting ‘No Purchase Necessary’ disclaimers, they sidestep California’s regulatory framework and evade the state’s voter-approved proposition related to Tribal-State gaming.
“Many of these sweepstakes operators are based offshore and function without proper oversight, avoiding requirements like consumer protections, responsible gaming safeguards, background checks, and tax compliance.”
The bill has already been passed by California’s Senate Governmental Organization Committee by a 10-0 vote. It now moves forward for consideration by the Public Safety Committee.
This bill has the backing of the California Nations Indian Gaming Association (CNIGA), a powerful lobby group in the state’s gaming industry. Tribal government gaming has contributed $25 billion to the state’s economy and employs over 100,000 people. They also have exclusive rights to operate gaming in the state under the California Constitution.
“Together, Tribal governments and the State of California will continue to address and take decisive action against illegal internet gaming in all its forms,” said Yuhaaviatam Tribal Council of San Manuel Vice Chairman Johnny Hernandez, Jr.
Along with the state’s seven tribes, also backing Bill AB 831 is the Sports Betting Alliance. This is an amalgamation of several legal and regulated US sportsbooks. It’s a group that includes FanDuel, DraftKings, BetMGM, Fanatics Sportsbook, and Bet365.
There were also plenty of groups speaking against the bill. That side of the ledger included the Social Gaming Leadership Alliance (SGLA), the Social and Promotional Games Association, Play Studios, the Association of National Advertisers, and sweepstakes casino owner VGW, operator of such popular sites as Chumba Casino and Luckyland Slots.
These critics note that there has never previously been any problem with California sweepstakes casinos in terms of consumer concern or any prior government regulatory issues since this industry first entered the state marketplace in 2012. Estimates are that more than 20,000 Californians actively participate in sweepstakes casino play.
Opponents of the bill are also concerned by the far-reaching impact it could have on further attempts to legalize online sports betting and online casinos in the Golden State. They insist that passage of Bill AB 831 is only going to further strengthen the stranglehold the state’s tribes have on all forms of gambling in California.
That’s proven to be a major stumbling block in any attempt to move forward with legislation designed to legalize either of these forms of gambling.
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