California Senate Committee Unanimously Approves Sweepstakes Banning Bill

• Members of the California Senate Public Safety Committee have moved a sweepstakes banning bill forward
• The committee approved the bill by a 6-0 vote
• AB 831 is a bill to officially ban sweepstakes contests in the Golden State

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A bill to ban dual-currency sweepstakes contests in California has been moved forward by another Senate committee in the span of one week.

The California Senate Public Safety Committee approved AB 831, a bill to ban dual-currency sweepstakes games in California. The Senate Committee voted 6-0 in favor of the bill. This comes one week after the Senate Governmental Organization also approved the legislation by a unanimous vote.

Assemblymember Avelino Valencia’s (D-68) bill prohibits dual-currency sweepstakes contests resembling casino and sports betting games in the state. It now heads to the Senate Appropriations Committee.

Bill Making Progress

Valencia’s bill, originally dealing with tribal state gaming compacts, was overhauled in late June to make it unlawful for any person or entity to operate, conduct, or promote a dual-currency online sweepstakes game that mimics casino games or sports betting.

“These platforms are circumventing the will of the voters and sidesteps the state’s gaming framework,” Valencia said.

In addition to prohibiting dual-currency sweepstakes games, the bill outlines potential fines and punishments for those who offer the games.

“The bill would make a person who violates these provisions guilty of a misdemeanor punishable by a fine not less than $1,000 nor more than $25,000, or by imprisonment in the county jail not exceeding one year, or by both the fine and imprisonment,” according to the legislation.

The bill also outlines the type of sweepstakes games that will be prohibited in California. Games that allow a person to purchase “sweepstakes coins” or other types of sweepstakes currency that allows the user to win a prize, award, cash, or cash equivalents will be prohibited.

Additionally, any games that simulate gambling or play a gambling-themed game, such as slot machines, video poker, casino-style table games such as blackjack, roulette, craps, and poker, will be prohibited.

These types of games, Valencia said, negatively impacts tribal exclusivity for California gambling.

The legislation is currently backed by the California Nations Indian Gaming Association (CNIGA). Johnny Hernandez, Vice Chairman of the San Manuel Band of Mission Indians’ Tribal Council, said dual-currency sweepstakes exposes vulnerable and young Californians to real money gambling with no regulations.

Hernandez also addressed a popular talking point among the bill’s detractors. The San Manuel Band of Mission Indians operates the Yaamava’ Resort and Casino in California, which offers and promotes its own sweepstakes game. The Yaamava’ Resort and Casino provides customers with an opportunity to participate in a “Fall of Surprizes Sweepstakes” game, in which customers can win free casino play.

The sweepstakes game, Hernandez said, is not a dual-currency games and does not offer cash prizes to users.

The bill, he noted, does not target traditional sweepstakes games offered by companies such as Starbucks or Microsoft.

“AB 831 does not make traditional and promotional sweepstakes unlawful. It solely targets dual currency models that mimic gambling,” he said.

SGLA Fights Back

Bill Gantz, on behalf of the Social Gaming Leadership Alliance, spoke out against the bill and its overly broad language. If approved, the bill risks turning everyday operations, such as certain marketing services and platform hosting, into criminal offenses.

All SGLA members comply with California state sweepstakes laws, he said, upholding all user and age verification requirements. California lawmakers need to develop a regulatory framework for sweepstakes competitions, he said, which if taxed could bring in more than $149 million in annual revenue.

David Jumper, chief marketing officer of ARB Interactive, the largest American owned and operated social casino company, said sweepstakes contests are enjoyed by millions of Americans. The industry contributes hundreds of millions of dollars to the California economy each year through marketing and advertising.

“This is not an unregulated industry and it’s not operating in the shadows. It supports American jobs and American industry,” he said.

Jumper suggested the committee impose a two-year timeline to develop a “thoughtful regulatory framework” for these type of social sweepstakes contests.