What does it cost a state to change the law? That was the question on the mind of California's Senate Appropriations Committee regarding Assembly Bill 831.
If passed into law, AB831 would make it unlawful for a person or entity to operate, conduct, or offer an online sweepstakes game that utilizes a dual-currency system of payment in California. The Senate Appropriations Committee is currently considering the bill. It was recently placed in the committee's suspense file, basically putting the bill into a holding pattern.
In the meantime, the Senate Appropriations Committee conducted an in-house analysis to determine the impact that passage of this bill would have on the California legal system.
The study found that the state should anticipate incurring significant legal costs in order to enforce the sweepstakes casino prohibition.
One group that the study anticipates would face major expenditures resulting from a sweepstakes casino ban in California is the state's Department of Justice (DOJ). Naturally, if the sweepstakes casinos operating in California were making the choice to unilaterally cease operations if AB831 were to be passed into law, then no issues should result.
However, if even some of the sweepstakes casino sites opt to ignore the ban and continue to operate in California, the study projected that enforcement actions against these sites would be undertaken at a prohibitive cost to the DOJ.
The analysis notes that "these costs will likely be significant because enforcement actions against these providers are complex with difficult jurisdictional issues."
The proliferation of illegal offshore online real-money casinos and sportsbooks displays the challenges of enforcing such a law. Calling for a shutdown of these sites is one thing. Getting them to cease operating in a state is difficult to achieve.
Fighting any challenges to the sweepstakes casino ban could also significantly tax California's court system. Lengthy trials would have an impact on both time and money.
"The fiscal impact of this bill to the courts will depend on many unknowns," the study found, "including the number of cases filed and the factors unique to each case. An eight-hour court day costs approximately $10,500 in staff in workload. If court days exceed 10, costs to the trial courts could reach hundreds of thousands of dollars."
"While the courts are not funded on a workload basis, an increase in workload could result in delayed court services and would put pressure on the General Fund to fund additional staff and resources and to increase the amount appropriated to backfill for trial court operations."
There's another unknown that could result from the passage of AB831. How far is California going to be willing to go in enforcing this law? Will sites that are in violation of the ban merely be paying fines? Might people also be facing jail time as part of enforcement?
If so, that would also result in significant costs to the state's legal system.
"The average annual cost to incarcerate one person in county jail varies by county, but likely ranges from $70,000 to $90,000 per year," the analysis projected. "Actual incarceration costs to counties will depend on the number of convictions and the length of each sentence. Generally, county incarceration costs are not reimbursable."
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