The war against sweepstakes casinos in the United States is far from over.
California is the latest state to consider legislation that would prohibit sweepstakes casino operators from operating within its borders.
This move has already sparked a response from organizations such as the Social and Promotional Games Association (SPGA), highlighting a heated debate over digital gaming regulation and its implications for businesses and consumers.
California Bill Would Penalize Celebrities Who Promote Sweepstakes Casinos
Although California's proposed legislation had not yet been made public at the time of writing, key figures in the gaming industry, like the Global Head of Government Affairs and Legislative Counsel at Light & Wonder, Howard Glaser, have confirmed the introduction of this bill.
Glaser announced the news on LinkedIn, posting: "A bill introduced (Friday) with the backing of the California Nations Indian Gaming Association follows similar lines to the New York legislation passed unanimously this week, making it unlawful to facilitate or promote the operation of illegal online sweepstakes casinos by any “person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate."
According to Glaser, the bill's wording indicates that California celebrities like Drake, Paris Hilton, and Ryan Seacrest, who promote sweepstakes casinos, could be held legally responsible for advertising and promoting illegal casinos.
He also stated in his post that members of CNIGA were informed about this bill via a broadly shared email. It's likely that the bill will receive positive consideration in Sacramento, since casino gambling in California is only allowed on tribal lands according to state and federal law.
IGA Conference Chairman Victor Rocha also mentioned his intentions to discuss this legislation with CNIGA Chairman James Siva.
SPGA's Stance: Criticism of a "Backroom Ban"
The SPGA has voiced strong opposition to California's legislative maneuvers, describing it as a "backroom ban" executed through a "controversial gut and amend maneuver." This action occurred mere hours before a legislative deadline, raising concerns about the transparency and procedural fairness of the legislative process.
An SPGA spokesperson criticized the legislation, emphasizing the lack of public debate, expert input, or economic analysis.
They argue that this move undermines the foundation of sound policymaking and sends a negative message to entrepreneurs and investors in the state, especially when there are pressing issues like wildfires and a housing crisis.
The SPGA and its members say they are dedicated to keeping players safe, encouraging responsible new ideas, and supporting clear rules that help social sweepstakes games grow.
Potential Impact on Businesses and Consumers
Critics of the bill worry about its broad implications.
There's concern that the vague wording could inadvertently criminalize legitimate social sweepstakes platforms, which are typically free to play and include consumer protections like age-gating and geolocation.
Moreover, the bill could impact popular rewards programs from companies like Marriott, Microsoft, and Starbucks, which use chance-based giveaways for promotions. The SPGA asserts that this legislation undermines California’s legacy as a leader in technology and digital entertainment by favoring established interests over startups and consumer choice.
A Broader National Trend to Ban Sweepstakes Casinos
What's happening in California is part of a bigger trend across the country where states are getting tough on sweepstakes casinos. This completes a busy week of actions against these activities.
Last week, New York passed a bill called SB 5935, making it the fifth state to ban sweepstakes casinos, after Connecticut, Montana, Nevada, and Louisiana.
In Louisiana, Governor Jeff Landry vetoed a bill, but shortly after, the Louisiana Gaming Control Board sent 40 cease-and-desist letters to illegal operators, including offshore and sweepstakes casinos and sportsbooks.
Mississippi also issued cease-and-desist orders and New Jersey moved forward with its own enforcement bill.
Ohio lawmakers are considering a ban as well, while officials in Maine have warned residents not to take part in these games.
Since 2023, at least 16 states have taken steps against sweepstakes operators, showing a major shift in how this industry is regulated across the U.S. If California acts, and possibly Texas or Florida too, it could spell the end for successful sweepstakes casino operations in the country.
The Road Ahead for Sweepstakes Casino Games
The SPGA urges California's leaders, including Governor Newsom, to reject this rushed approach. They advocate for a transparent and fact-based dialogue regarding the future of digital innovation in the state.
As the debate continues, stakeholders will likely watch closely to see how California balances its rich tradition of technological innovation with the need to regulate emerging online gaming trends effectively.
