Things are starting to get a little testy in California
In a move to curb the expansion of unregulated online gambling, California is taking bold steps to dismantle the growing network of sweepstakes casinos.
Backed by the Indian Gaming Association (IGA) and the California Nations Indian Gaming Association (CNIGA), new legislation (AB 831) has been introduced targeting various entities involved in these operations. From operators and payment processors to platform providers and celebrity endorsers, the bill aims to encompass the entire ecosystem.
The IGA hosted a webinar titled "THE NEW NORMAL: Disrupt and Dismantle – California’s Strategy to Shut Down Sweepstakes Casinos."
James Siva, Chairman of CNIGA, and Michael Hoenig, Vice President and Associate General Counsel for the Yuhaaviatam of San Manuel Nation, discussed the bill. They highlighted how these gray-market schemes threaten California's constitutional gaming framework and erode tribal sovereign rights.
Protecting Tribal Rights and Gaming Exclusivity
The tribes in California are taking strong action to tackle unregulated online gambling because they say it helps protect their rights and keeps their gaming operations exclusive.
According to CNIGA, tribal government gaming generates approximately $25 billion each year for California’s economy, supporting over 112,000 jobs.
AB 831 states: "Existing law prohibits specified unfair acts or practices undertaken or committed by any person in the operation of any contest or sweepstakes including, among other things, using or offering for use any method intended to be used by a person interacting with an electronic video monitor to simulate gambling or play gambling-themed games in a business establishment that directly or indirectly implements the predetermination of sweepstakes cash, cash-equivalent prizes, or other prizes of value, or otherwise connects a sweepstakes player or participant with sweepstakes cash, cash-equivalent prizes, or other prizes of value."
The bill also includes measures to penalize individuals and organizations involved in promoting or facilitating illegal sweepstakes operations. This could potentially affect celebrities and influencers. Howard Glaser, Global Head of Government Affairs at Light & Wonder, commented that the legislation might implicate well-known figures such as Drake, Paris Hilton, and Ryan Seacrest, who have endorsed these platforms.
Controversy and Reactions from Industry Groups
While the bill is gaining traction among tribal leaders, it has sparked controversy.
The Social and Promotional Games Association (SPGA) claims that the bill was sponsored by San Manuel, which operates Yaamava’ Resort & Casino. The SPGA says that San Manuel's PlayOnline platform has been involved in similar sweepstakes promotions, such as “The Factory Sweepstakes” and “Fall of Surprizes Sweepstakes.”
The SPGA views the legislative push as a "backroom ban" driven by powerful political interests. They argue that, with California facing numerous other challenges, lawmakers should not prioritize banning mobile games.
A Nationwide Trend Against Sweepstakes Casinos
California's legislative efforts are part of a broader national movement.
Recently, New York passed a bill making it the fifth state to ban sweepstakes casinos, following the footsteps of Connecticut, Montana, Nevada, and Louisiana. In Louisiana, Governor Jeff Landry vetoed a bill that would have implemented a ban in the bayou; however, enforcement actions ensued with the Louisiana Gaming Control Board issuing cease-and-desist letters to various illegal operators.
As discussions continue, this new bill could be a turning point in the conflict between tribal gaming groups and sweepstakes casinos. What happens next will not only impact gaming in California but might also affect other states as they consider adopting similar rules. Many people are closely watching to see how this bill proceeds and what different groups in the gaming world have to say about it.
