California Moves Towards a Ban on Sweepstakes Casinos with Unanimous Senate Support
In a decisive move, the California Senate has taken significant steps towards prohibiting sweepstakes casinos, passing Assembly Bill 831 with a unanimous vote of 36-0. This bill, initially introduced in the Assembly, now awaits the Assembly’s concurrence before becoming law.
This legislative action is part of a broader trend occurring across various states. Lawmakers are becoming increasingly vigilant regarding sweepstakes setups, with similar bans enacted in states like Connecticut, Montana, and New Jersey earlier this year. Regulatory bodies have also begun issuing cease-and-desist letters, further curtailing the operations of such establishments.
As the bill progressed, it was amended to specifically exclude popular state lottery games and traditional corporate sweepstakes, such as those run by McDonald’s and Starbucks. This exclusion was a response to concerns raised by opponents, who suggested that the bill could inadvertently stifle these more widely accepted forms of gaming.
Growing Support and Opposition
Key support for AB 831 has come from organizations like the California Nations Indian Gaming Association and various tribal groups, including the influential Yuhaaviatam of San Manuel Nation. These tribes have historically fought to maintain control over gaming within the state, emphasizing tribal sovereignty. Their previous campaign against Proposition 27, aimed at expanding sports betting by outside interests, is a testament to their commitment.
However, not everyone is on board with the latest legislation. Four tribes—Big Lagoon Rancheria, Kletsel Dehe Wintun Nation, Mechoopda Indian Tribe of Chico Rancheria, and Sherwood Valley Rancheria—have allied with sweepstakes casino operators. Additionally, industry bodies such as the Social and Promotional Gaming Association and the Social Gaming Leadership Alliance argue that the bill is being rushed through the legislative process and criticize its “gut-and-amend” approach.
One spokesperson expressed frustration about prioritizing the ban on mobile games amidst the state’s more pressing issues, such as wildfires and a housing crisis.
Exiting the California Market
In light of growing scrutiny, several operators and suppliers are withdrawing from California’s sweepstakes casino market. Actions taken by Los Angeles City Attorney Hydee Feldstein against Stake.us highlight the legal challenges facing these businesses. Major gaming suppliers, including Playtech and Evolution, have also notably exited the state, pulling their services from active sweepstakes venues.
New Challenges: Prediction Markets and Daily Fantasy Sports
In addition to sweepstakes casinos, California stakeholders are scrutinizing prediction markets and daily fantasy sports (DFS) platforms. Some tribes have initiated legal action against operators like Kalshi, arguing that such markets constitute illegal sports betting, particularly on tribal land where federal protections apply.
Moreover, California Attorney General Rob Bonta’s recent declaration labeling daily fantasy sports as forms of gambling ignites further debate. However, Governor Gavin Newsom has expressed disagreement with this stance, leaving the situation in a state of ambiguity for DFS operators in the region.
The discussion surrounding gaming legislation in California is emblematic of the complex dynamics between state regulations, tribal interests, and the influence of powerful gaming entities. The upcoming weeks will be crucial as California continues to navigate these intricate challenges while shaping the future of gaming within its borders.