California legislators have introduced bills to ban sweepstakes-style casino operations, a step toward the state's quest to cement tribal exclusivity in gaming. The legislation also follows similar efforts in other states to block the sweepstakes segment.
Key Takeaways
- California lawmakers have introduced a tribal-backed anti-sweepstakes bill.
- The move follows similar ventures in other states like New York and Louisiana.
The bills have the support of the California Nations Indian Gaming Association and fulfill the tribes' long-held complaint that sweepstakes gaming is unlawful. The state constitution permits only tribes to run most gambling games, and tribal interests see sweepstakes casinos as a blatant violation of that monopoly.
The pending bill follows a surge of enforcement efforts against sweepstakes operators nationwide. Politicians in New York last week voted unanimously to move ahead a similar prohibition, and regulators in Louisiana and Mississippi have sent more than 50 cease-and-desist letters to such enterprises.
The online casino California law will likely adopt the model seen in New York and broaden to reach many industry stakeholders, as per Howard Glaser, global head of government affairs within Light & Wonder.
"A bill introduced (Friday) with the backing of the California Nations Indian Gaming Association follows similar lines as the New York legislation passed unanimously this week, making it unlawful to facilitate or promote the operation of illegal online sweepstakes casinos by any “person, entity, financial institution, payment processor, geolocation
provider, gaming content supplier, platform provider, or media affiliate,” Glaser said.
Endorsers and sponsorships involving celebrities may also become illegal. Drake and Paris Hilton are among the celebrities who publicly sponsor operators within the sector.
Indian Gaming Association chairman Victor Rocha has been the loudest critic of sweepstakes gambling's growing presence in California. In 2023, the tribal groups that are members of the Sports Betting Alliance set aside their internal differences to lobby for regulation in opposition to the sweepstakes model's growing presence.
Should the legislation pass, California would become the third state to prohibit sweepstakes casinos, joining Connecticut and Montana.
California sues federal government over approval of Sonoma Tribal Casino
The sweepstakes legislation isn't the only tribal-related gambling effort underway in California. In May, the state escalated its legal battle with the government with a lawsuit to halt a major Sonoma County tribal casino venture.
The lawsuit challenges the Department of Interior's authorization of the Koi Nation of Northern California to construct a casino near Windsor on procedural grounds and state sovereignty concerns.
Gov. Gavin Newsom and the state argue the federal government went around significant protections in the law when they invoked the "restored lands" exception of the Indian Gaming Regulatory Act. The clause permits gaming on land newly acquired by restored-to-recognition tribes. The state argues, however, that the record does not reflect a valid historic nexus between the Koi Nation and the Shiloh Site.
Newsom's government maintains that the federal decision sidesteps the requirement of a "two-part determination" mechanism whereby federal agencies would need to seek consultation with local agencies and obtain consent from the governor.
