Modified California Gaming Bill Takes Aim at Banning Sweepstakes

• A modified California bill proposes a complete ban on sweepstakes gaming in the Golden State
• The original bill concerned tribal gaming compacts
• The new tribal-backed legislation will ban dual-currency sweepstakes games that mimic casino-style or sports betting games

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California is taking aim at the sweepstakes industry with an expansive new bill to ban dual-currency games that mimic casino offerings and sports betting.

Assemblymember Avelino Valencia (D-68) overhauled bill AB 831, originally dealing with tribal state gaming compacts, to ban any and all dual-currency sweepstakes games in offered in California. Under the legislation, it would be unlawful for any person or entity to operate, conduct, or promote a dual-currency online sweepstakes game that mimics casino games or sports betting.

It will not, however, prohibit a sweepstake game “that does not award cash prizes or cash equivalents.”

Imposing Fines for Sweepstakes Gaming

The original bill was introduced in February and passed the Assembly in May. However, it was ordered inactive by the Senate earlier this month before being overhauled by Valencia. The new legislation is backed by the California Nations Indian Gaming Association (CNIGA).

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.”

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.

Bill Sponsored by Tribe that Deals in Sweepstakes?

The San Manuel Band of Mission Indians supports the bill, yet the tribe has an apparent stake in sweepstakes gaming. The San Manuel Band of Mission Indians operates the Yaamava’ Resort and Casino in California, which also offers and promotes a sweepstakes game.

The Yaamava’ Resort and Casino offers users an opportunity to participate in a “Fall of Surprizes Sweepstakes” game, in which customers can win free casino play.

If the bill is approved, the offering will be illegal and will likely have to be discontinued or modified.

SPGA Criticizes ‘Backroom Ban’ on Sweepstakes

The Social and Promotional Games Association (SPGA) decried the new bill, describing it as a “backroom ban on promotional sweepstakes” through a controversial “gut and amend” maneuver before the legislative deadline.

The SPGA noted the law will “threaten to criminalize lawful social sweepstakes games” and potentially outlaw sweepstakes promotions from companies such as Marriott, Microsoft, and Starbucks.

“This isn’t how sound policy gets made,” said a spokesperson for the SPGA. “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.”