California’s anti-sweepstakes proposal (AB831) took another step forward yesterday, securing its second approval from the Senate Public Safety Committee. Lawmakers unanimously approved the current version 6-0 following a full hearing.
The bill now moves to the Senate Appropriations Committee for further consideration.
Key Provisions of California’s AB831 Anti-Sweepstakes Casino Bill
The current version of AB831 was introduced last month by Democrat Assemblyman Avelino Valencia in a controversial ‘gut and amend’ procedure (where a bill’s original content is replaced with entirely new language late in the process). It’s backed by the California tribes who control most of the state’s regulated gambling market.
The wording of AB831 specifically targets “online sweepstakes games”, which is more specific than similar bills we’ve seen this year in other states. It also takes aim at the supply chain, rather than just the operator:
“It is unlawful for any person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.”
The penalty for violation is stated as:
“A fine not less than $1,000 nor more than $25,000, or by imprisonment in the county jail not exceeding one year, or by both the fine and imprisonment.”
Stakeholder Reactions to AB831: California Tribes vs. Sweepstakes Operators
During the debate yesterday, Assemblyman Valencia first acknowledged some suggested amendments to the text, including clauses to protect those who financially support sweepstakes casinos unknowingly, as well as players at the casinos. He also spoke of ongoing conversations with California card rooms to make sure they are not implicated.
Arguments were then made from both sides, including from Johnny Hernandez, vice chairman of the San Manuel Band of Mission Indians. He argued:
“The dual-currency model creates a dangerous environment where Californians, especially young and vulnerable users, are exposed to real-money, gambling-like experiences with none of the consumer protections.”
Hernandez also accepted that San Manuel offers a social casino product similar to the format he wants banned, but he argued that it differs from sweepstakes casinos by not offering cash prizes.
On the sweepstakes side, Bill Gantz, a gaming attorney representing the Social Gaming Leadership Alliance (SGLA), rebutted some of those points, stating that sweepstakes casinos are always free to enter, with purchases being optional.
He also argued that there is no evidence sweepstakes casinos harm consumers. In fact, it’s the opinion of SweepsKings that all the best sweepstakes casinos offer KYC checks and responsible gaming tools in a similar fashion to regulated online casinos.
The second sweepstakes industry trade group, the Social and Promotional Games Association (SPGA), also made a press release before the debate. It opened with the following:
“A broad coalition of organizations, including the American Civil Liberties Union (ACLU) and the Association of National Advertisers, whose members include Google, NBCUniversal, and other Fortune 500 companies, has joined the Social & Promotional Games Association (SPGA) in opposing California Assembly Bill 831.”
The full list of opposing organizations is:
- ACLU California Action
- American Transaction Processors Coalition
- Association of National Advertisers
- Californians United for a Responsible Budget
- Social and Promotional Games Association (SPGA)
- Social Gaming Leadership Alliance (SGLA)
- Virtual Gaming Worlds
Battle lines have been firmly drawn as both sides fight for arguably the most important gaming market in the US. For now, it seems the tribes and the traditional gambling industry have the momentum, which could ultimately lead to the loss of the sweeps format in CA.
We’ll keep you updated as things progress.
Author: Joseph Allen
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