California’s new anti-sweepstakes bill, AB831, cleared its first committee hurdle yesterday with a vote of approval in the Public Safety Committee, though it didn’t come without debate and scrutiny.
Since the original bill’s wording was replaced last month through a ‘gut and amend’ process, AB831 has drawn intense attention from the sweepstakes industry. The new text, which is vastly different from the original AB831 bill, has created a proposal that could outright ban sweepstakes casinos, sportsbooks, and poker platforms in the Golden State.
With California generally accepted as the biggest market for sweepstakes gaming in the US, it’s no surprise this debate is attracting more attention than many other bills introduced this year.
California Tribes and Traditional Gambling Interests Support AB831
Support for the bill came from California Nations Indian Gaming Association (CNIGA), which has been extremely vocal in lobbying for the removal of sweeps casinos from Cali. The California tribes have an exclusive right to offer casino-style gaming under the state’s tribal compacts, and they view sweepstakes casinos as an unregulated threat to that exclusivity.
The Sports Betting Alliance – representing major gambling operators such as bet365, BetMGM, DraftKings, FanDuel, and Fanatics – also expressed support.
The Response from Sweepstakes Operators to AB831
Opposition included WPT CEO, Adam Pliska, who must be clocking up plenty of air miles after also taking part in a recent committee debate on New Jersey’s own anti-sweeps bill. Pliska’s sweepstakes poker platform, ClubWPT would certainly be affected by both proposals.
Another voice of opposition came from Social Gaming Leadership Alliance (SGLA) legal representative, Bill Gantz, who pointed out that, while the tribal-owned Yaamava’ Resort and Casino is supporting the bill, it has its own online social casino named PlayOnline.
“This is a bill by competitors to get rid of their competition,” said Gantz.
Sweepstakes giant, VGW (Chumba, Luckyland, and Global Poker) registered its objections in writing to be included in the legislative analysis. It also included support for regulation of the sweeps vertical, an idea that rarely gains traction, with lawmakers usually simply pushing for an outright ban. VGW wrote:
“We want to work collaboratively with the California Legislature on sensible legislation that creates a robust regulatory framework prioritizing consumer protection while simultaneously offering a new revenue stream for the state. The economic opportunity is significant. Based on industry projections by Eilers & Krejcik, California could generate annual revenue of $149 million through sale [sic] tax alone.”
As a member of the SGLA, VGW has also been encouraging its players who are based in CA to write to their state representatives via the Quorum platform. At the time of writing, over 20,000 people had taken action via this route, showing just how hotly contested this bill is.
The Social and Promotional Gaming Association (SPGA) has also written an open letter to Assemblymember Avelino Valencia who is sponsoring the bill and its anti-sweeps wording. The letter says:
“AB 831 seeks to outlaw an entire category of digital promotions and entertainment, which have existed and operated legally for many years, using language so broad that its full impact is impossible to predict. The bill was amended at the last minute, without stakeholder input, without supporting data, and without clear evidence of harm.”
It goes on to urge Valencia to reconsider the text of the bill, arguing that the current wording does not meet a high enough standard to be considered a tightly worded, fair bill. The SPGA also provided supplementary evidence arguing that the broad wording of the bill would outlaw sweepstakes promotions used by companies such as the California Lottery and Starbucks.
California Lawmakers Question the Apparent Urgency of AB831
Back at the committee hearing, Johnny Hernandez, Vice-Chairman of San Manuel Band of Mission Indians claimed the bill is “very specific” in how it purely targets sweepstakes casinos and no other businesses.
However, plenty of lawmakers asked probing questions.
“The question arises as to the urgency,” said Session Chair, Chair Rosilicie Ochoa Bogh. “Why we are doing this so quickly? Because this could be very, very impactful in a large area…These are the concerns I have with gut-and-amend; we don’t have an opportunity to vet thoroughly.”
Senator Susan Rubio added, “I’m a little disappointed that I just learned about it two weeks ago,” adding, “It’s almost like it’s a little bit last-minute.”
Senator Angelique Ashby recommended tightening up the language to ensure no sweepstakes players would be prosecuted should the bill pass.
Despite this scrutiny, the bill passed with a unanimous vote and is now scheduled for a July 15 hearing in the Senate Public Safety Committee. Stay tuned for more as we hear it.
Author: Joseph Allen
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