CA’s AB831 Clears Senate & Moves to Assembly Concurrence Vote

California’s AB831, a bill targeting online sweepstakes casinos, has passed the Senate and now only needs Assembly approval before it would head to Governor Newsom for a signature or veto.

After moving out of suspense last week, the proposal was approved by a vote of 36-0 yesterday (September 8). That was despite a protest staged by four Californian tribes.

Representatives from Kletsel Dehe Wintun Nation, the Sherwood Valley Rancheria of Pomo Indians, the Mechoopda Indian Tribe of Chico Rancheria, and Big Lagoon Rancheria assembled outside the Sacramento State Capitol to voice opposition. These four tribes argue that AB831 will remove a viable income stream for poorer, smaller tribal groups.

Indian tribes in California have a right to offer gaming on their lands (bingo and certain card games), but full-scale casinos (slots, blackjack, roulette etc.) require a state compact, which most small tribes – like the ones above – do not possess.

AB831 has been strongly supported by CNIGA, the California Nations Indian Gaming Association, which argues that the legislation safeguards tribal sovereignty and prevents sweepstakes casinos from undercutting tribes’ economic opportunities.

However, the bill has clearly exposed discord between the tribes, with smaller groups arguing their voices have not been considered in the debate. We have seen partnerships announced between sweepstakes casinos and some of these smaller tribes, namely:

• VGW and the Kletsel Dehe Wintun Nation
• B-Two Operations and the Sherwood Valley Rancheria of Pomo Indians
• Yellow Social Interactive and the Mechoopda Indian Tribe of Chico Rancheria

That being said, these initiatives would soon be put to rest if the bill passes.

What Would AB831 Change in California Sweepstakes Casinos?

Introduced by Assemblymember Avelino Valencia, the bill would fully outlaw the sweepstakes casino format in CA, along with the associated supply chain.

It’s far from the only anti-sweepstakes proposal in a state legislature this year; similar bills like this have already passed in Montana, Connecticut, and New Jersey, and then were signed off.

However, because California is seen as the biggest market for sweepstakes, the vertical would lose a much more significant chunk of potential revenue if AB831 passed. Furthermore, because of California’s size and visibility, it could invite more states to follow suit.

AB831’s ‘Gut and Amend’ & September Revisions

Detractors have often cited the controversial ‘gut and amend’ tactic used to introduce the current text.

The original wording of AB831 was completely unrelated to sweepstakes casinos, and by substituting in brand new text in May, the proposal can now pass the Assembly without the need for full scrutiny there. The bill had previously passed the Assembly under its original wording, so only a simple concurrence vote is now required to approve the revised text.

Supporters of the bill will be looking to achieve that concurrence as soon as possible. The CA session ends on the 12th, and failure to pass during this session would see it shifted to next year’s session.

It’s also worth noting that the bill’s wording was amended again on September 3 to pacify any criticisms that the bill could affect retail sweepstakes promotions like those offered by Starbucks or McDonald’s, as well as the state lottery:

Sections (e) and (f) should now put it beyond any doubt that the only entities targeted are dual-currency Cali sweepstakes casinos such as McLuck, Chumba, and WOW Vegas.

Some operators have pulled out of the Golden State already, likely in anticipation of the bill passing. Popular sweeps platform, High 5 Casino recently added its name to the list of those that have exited.

We’ll be keeping a close eye on AB831’s progress as it reaches the final stages of its journey in CA.