Legislation in California, specifically AB 831, is now aiming to regulate sweepstakes as part of its broader gambling restrictions.
California's Crackdown on Online Sweepstakes Casinos: AB 831 and the Battle for Tribal Gaming Exclusivity
California's Assembly Bill 831 (AB 831) is causing a stir in the gaming industry, aiming to outlaw online sweepstakes casinos in the state. This controversial bill, initially a minor procedural measure, has evolved to target internet-based games that mimic real-money gambling and threaten tribal gaming exclusivity[1][2].
The main purpose of AB 831 is to protect tribal gaming interests by making it illegal to operate, facilitate, or promote these platforms. It extends liability beyond operators to platform providers, payment processors, marketers, and endorsers[1][2]. By imposing criminal penalties, including up to one year in jail and fines up to $25,000 for violations, the bill aims to close legal loopholes exploited by online sweepstakes casinos[1][2].
The bill has passed several legislative committees and votes unanimously in some cases, including 14-0 in Senate and 77-0 in Assembly votes. However, it has been placed into the Senate’s Suspense File, a procedural pause where controversial or costly bills often stall or die[2][3][5].
Notably, industry pushback includes a new partnership between VGW (operator of popular sweepstakes casinos like Chumba Casino and LuckyLand Slots) and the federally recognized Kletsel Dehe Wintun Nation. This tribal collaboration aims to provide a legal way to operate online social gaming in California and is part of VGW’s strategy to resist AB 831, supported by groups like the ACLU[2][4].
The bill specifically targets online or mobile sweepstakes games that use dual-currency systems, offer cash or cash-equivalent prizes, simulate casino or sports betting gameplay, and allow players to participate using real or indirect consideration[2]. It does not impact traditional retail sweepstakes that do not offer cash prizes, such as grocery store promotions, Starbucks giveaways, or hotel loyalty raffles[2].
The bill's potential impact extends to major casino brands, potentially putting them in the crosshairs of legislation like AB 831. The bill specifically calls out sweepstakes 20 times in the text, highlighting its focus on this growing gray-market segment of the online casino gambling ecosystem[1][2].
The bill is sponsored by the San Manuel Band of Mission Indians, who own Yaamava' Resort and Casino in San Bernardino County[1]. Critics argue that the bill is an attempt by tribal gaming operators to protect their brick-and-mortar interests by shutting down potential online competitors[2].
As the bill moves through committee review and floor votes, it faces criticism regarding its broad scope, potential unintended consequences, and the legislative tactic of grafting sweepstakes regulations onto unrelated tribal gaming bills[2][3][5]. The bill must now move through these stages before potentially landing on Governor Gavin Newsom's desk.
California's move to outlaw online sweepstakes follows legislative action across the country, with many states with legal sports betting passing or considering similar bans[6]. Meanwhile, Louisiana Governor Jeff Landry vetoed his state's version of the ban, while regulators in multiple jurisdictions have issued cease-and-desist orders against sweepstakes operators[2].
In summary, AB 831's current status is that it is legislatively active but stalled in suspense, while its purpose is to criminalize and effectively ban online sweepstakes casinos in California to enforce tribal gaming exclusivity and regulatory compliance[1][2][3][5].
[1] https://www.calmatters.org/politics/2023/03/california-tribal-casinos-online-gambling-bill/ [2] https://www.gamingtoday.com/news/california-online-sweepstakes-bill-advances-despite-industry-pushback/ [3] https://www.legislature.ca.gov/legislator-tracker/bill-status/107/2023/AB-831/ [4] https://www.aclu.org/news/civil-liberties/aclu-joins-legal-challenge-against-california-tribal-gaming-bill-that-threatens/ [5] https://www.leginfo.ca.gov/chronology/bill/sb/sb107/ [6] https://www.gamingtoday.com/news/online-sweepstakes-bills-proposed-in-more-states-with-legal-sports-betting/
- The main intention behind California's Assembly Bill 831 (AB 831) is to make it illegal to operate, facilitate, or promote online sweepstakes casinos, thus protecting tribal gaming interests.
- The bill extends liability to platform providers, payment processors, marketers, and endorsers, imposing criminal penalties for violations, with up to one year in jail and fines up to $25,000.
- A notable pushback against AB 831 involves a collaboration between VGW and the Kletsel Dehe Wintun Nation, aiming to provide a legal way to operate online social gaming in California and resist the bill.
- The bill specifically targets online or mobile sweepstakes games that simulate casino or sports betting gameplay, use dual-currency systems, and offer cash or cash-equivalent prizes.
- The potential impact of the bill extends to major casino brands, potentially putting them in the crosshairs of legislation like AB 831.
- The bill's focus on online sweepstakes reflects a growing trend in legislation aimed at regulating this gray-market segment of the online casino gambling ecosystem.
- The bill's current status is that it is legislatively active but stalled in suspense, while its ultimate purpose is to criminalize and effectively ban online sweepstakes casinos in California to enforce tribal gaming exclusivity and regulatory compliance.
