The text of Cali’s anti-sweeps casino bill became public a week after our original report. You can discover the full scope and application of AB831 here, and track its progress through the legislature as the situation unfolds.
Lawmakers in California – the most populous state in the country – are looking to get in on anti-sweeps action with a proposal of their own. That’s according to gambling industry insiders like Howard Glaser (legal counsel at Light & Wonder) and Victor Rocha (Conference Chair of the Indian Gaming Association).
Yes, the Indian Gaming Association is backing such legislation hard. Unlike many other states, California’s Constitution limits full casino-style gaming to Indian tribes on tribal land. As a result, California tribes have exclusive rights to operate full-scale casinos, and they guard that exclusivity fiercely. Of course, the traditional gambling industry and its businesses, like Light & Wonder, are also supporting any efforts to cut down the format nationwide.
The Golden State does not authorize online casino gambling for any operator, tribal or commercial. Here and in many other states, sweepstakes casinos exist in a gray area by arguing they don’t hit the full requirements for gambling, managing to avoid the usual gambling laws. Anti-sweeps proposals look to clarify such legal interpretations and outlaw the vertical definitively.
Wording of New California Bill Isn’t Publicly Available Yet
What makes it difficult to comment on the alleged bill accurately is the fact that it hasn’t been made public yet.
Glaser stated on LinkedIn that the bill number would be AB831. This number references a proposal filed in February this year, but the original text there focuses only on technical changes to tribal-state gaming compact procedures – nothing to do with sweepstakes.
It’s thought lawmakers have carried out a ‘gut and amend’ here, which is where an existing bill is taken, stripped of its original content, and replaced with entirely new language. It means that a bill that’s already passed certain hurdles (like committee votes) can retain its progress even after being amended. It speeds up the timeline compared to starting from scratch, but critics say it reduces the chance for true debate and is simply a manipulation of the legislative process.
According to Glaser, the amendments will be similar to the anti-sweeps legislation passed in New York last week, making it illegal “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’.”
The language could also apparently impact endorsers of sweepstakes casinos, such as celebrities like Drake, Ryan Seacrest, and Paris Hilton who have advertised for Stake.us, Chumba Casino, and WOW Vegas respectively.
SPGA Denounces ‘Gut and Amend’
In opposition, sweepstakes casino trade group, the Social and Promotional Games Assocation (SPGA) released a statement saying it is “deeply troubled by California lawmakers’ decision to attempt a backroom ban on promotional sweepstakes through a controversial ‘gut and amend’ maneuver hours before a legislative deadline.”
“This isn’t how sound policy gets made,” the statement continued. “A last-minute effort to outlaw legal digital games, without public debate, expert input, or economic analysis, sends a chilling message to entrepreneurs, innovators, and investors across the state.”
With residents numbering 39 million, losing the California market would be a huge issue for the sweepstakes industry. With New York potentially on the chopping block too, these two states represent two of the four most populous states in the US.
So far this year we’ve seen Montana, Connecticut, and Nevada successfully pass anti-sweepstakes legislation, with Louisiana getting a bill through the legislature for Governor Jeff Landry to veto it at the final hurdle.
However, Louisiana, along with New York and Mississippi, has been sending cease and desist orders to sweepstakes casinos. Between state legislative efforts and C&Ds, it’s been a tough year so far for the format.
There’s still plenty of time before the end of the California legislative session which closes on September 12 this year, and we hope to see some concrete, public evidence of the new bill soon. A California bill could trigger moves in other states, so we hope this proposal will receive the scrutiny it deserves from CA lawmakers.
Author: Joseph Allen
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