California Governor Gavin Newsom signed A.B 831 into law on Saturday, banning contest and sweepstakes gambling in the Golden State.
Key Takeaways
- A.B. 831 unanimously passed the California State Assembly and State Senate.
- The new law prohibits sweepstakes operators, along with their payment processors and media affiliates.
- The bill was fiercely opposed by the SGLA, an industry group representing the interests of sweepstakes operators.
The California Senate paved the way for the state’s sweepstakes ban when it amended AB 831 in June, crafting it into anti-sweeps bill. The Senate ultimately passed the bill on Sept. 8 with a vote of 36-0. The State Assembly unanimously passed the bill with a vote of 63-0 on Sept 12. Newsom signed it into law Saturday.
The law goes into effect on Jan. 1, banning sweepstakes (sometimes referred to as dual currency) gambling. The law will also prohibit any entity facilitating sweeps, including “financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate…” Violators would be guilty of a misdemeanor, punishable by a fine of up to $25,000 or up to a year in county jail, or both.
Industry group opposed
Along with its legislative support, A.B. 831 also had the support of most of California’s tribal gaming interests. Although, it had one predictable foe. The Social Gaming Leadership Alliance (SGLA), which represents the interest of sweepstakes operators, had hoped for the Governor’s veto. The SGLA argued the bill could cost more than $1 billion annually in economic activity and a loss of hundreds of millions of dollars in annual tax revenue.
After one legislative hearing, SGLA’s executive director Jeff Duncan said, “Today’s hearing exposed the committee’s complete disregard for facts, economic reality, and the voices of tens of thousands of Californians all to hand monopoly power to tribes that have already invested hundreds of millions of dollars in Las Vegas and California coastal properties.”
Sweepstakes operators losing ground
California isn’t the first state to ban sweepstakes gambling but it’s certainly the most populous. Montana was the first state this year to ban sweepstakes. Connecticut and New Jersey have also since enacted laws banning sweeps. Meanwhile, New York’s anti-sweeps bill is currently awaiting New York Governor Kathy Hochul’s signature. Nevada’s sweeps ban bill S.B 256 is likewise awaiting the governor’s approval.
