September Update – AB831 progressed out of suspense file. A few days later, it unanimously passed the Cali legislature and now awaits the Governor’s action.
California lawmakers have put a proposed ban on sweepstakes casinos into legislative limbo, as the Senate Appropriations Committee referred Assembly Bill 831 to its ‘suspense file’ yesterday.
Anti-sweeps bill, AB831 has been making solid progress through the Senate since its contents were replaced in a controversial ‘gut and amend’ process in June. The new wording would outlaw the sweepstakes casino format in the Golden State, and the proposal has been backed by the California tribes (for the most part) and key figures from the traditional gambling industry.
A gut and amend procedure often raises eyebrows because it allows a bill that has already passed certain hurdles – in this case, the Assembly – to avoid in-depth scrutiny again in the same chamber, even if the wording is completely different from the original text. So all that remained was for AB831 to pass the Senate, and then receive a brief reapproval in the Assembly.
AB831 Hits Suspense File
However, things have hit a snag for now. The suspense file is a kind of holding pen for bills with large financial implications. Bills placed there are taken up later in a single ‘suspense hearing’ where lawmakers decide en masse which proposals advance to the Senate floor, and which are shelved.
Something else working against the bill is the fact that California’s legislative session for 2025 ends on September 12, which means time is of the essence for those who want to see the bill succeed. AB831 was referred to the suspense file yesterday, leaving less than a month for it to exit, pass the Senate floor, and return to the Assembly for concurrence.
It was also surprising to see that no supporters of the bill were present at the committee hearing, although opponents were there to state their case. In fact, some particularly interesting news had emerged leading up to the hearing.
Kletsel Dehe Wintun Nation Speaks Out Against AB831
Until now, the California tribes, who have exclusive rights to operate regulated gaming in California, have presented a united front in backing the bill. But earlier this month, the Kletsel Economic Development Authority (KEDA) made its voice heard, saying it, in fact, opposes the bill.
KEDA speaks on behalf of the Kletsel Dehe Wintun Nation, a federally recognized tribe located in Northern California, and KEDA’s letter, addressed to members of the California Senate Appropriations Committee, argued:
“This bill lacks unanimous support among California tribes, has advanced without meaningful consultation with many of us, and threatens our inherent right to create legitimate revenue streams to support our people.”
KEDA and VGW Join Forces
Then, in an even more surprising move, news hit that sweepstakes behemoth VGW was looking to collaborate with KEDA. A press release announced that the two entities were partnering to “operate free-to-play online social games platforms (including associated sweepstakes promotions) in California.”
This kind of union between a tribe and a sweepstakes operator is unprecedented, and it does seem to muddy the waters and raise questions about AB831 – perhaps things aren’t as cut and dry as they first seemed?
VGW CEO Laurence Escalante added to the press release:
“As we’ve previously said, our focus is on respectful engagement with legislators and calling for the establishment of modern, appropriate regulatory structures that can benefit players and states alike – not rushed, flawed legislation with unintended consequences being pushed by parties with clear vested interests like AB 831.”
Back to yesterday’s hearing, Eric Wright, CEO of KEDA voiced opposition during the committee meeting:
“Digital platforms offer one of the few viable ways for geographically isolated tribes to fund essential services such as healthcare, education, housing, food security, social programs – the need is urgent.”
Then Shane Levine of the Social Gaming Leadership Alliance (pictured) also made representations, echoing Escalante’s calls for regulation rather than banishment:
“Instead of a prohibition of online sweepstakes, we should instead regulate and tax it, which could generate between $200-300 million a year in new revenue to the state of California.”
Finally, other VGW employees, along with Brian Schroeder of ARB Interactive made arguments against the proposal. Notably, Assemblymember Avelino Valencia, the sponsor of the bill, waived his presentation, leaving the committee to hear only opposition perspectives. It was then decided the bill would be placed into suspense.
So the anti-sweeps bill that had significant momentum has been moved to the sidelines for now, and we await the scheduling of the suspense hearing. California represents the largest market in the US for sweepstakes casinos, so the outcome of AB831 will have major implications for the industry, whichever way things fall.
Stay tuned for further updates on this story – and more – from SweepsKings.
Author: Joseph Allen
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