Tribal gaming leaders believe California’s anti-sweepstakes bill has a chance at getting passed this year and making a difference in the Golden State.
Key Takeaways
- California Nations Indian Gaming Association supports the legislative effort to make online sweepstakes gaming illegal
- Tribal gaming leaders hope the proposed law would force social casino and sportsbook operators out of the Golden State
- Indian Gaming Association Conference Chairman Victor Rocha has called for the entire annihilation of the sweepstakes industry
James Siva, Chairman of the California Nations Indian Gaming Association, said on Wednesday that he expects state legislators to move quickly on the tribal-backed bill introduced last week that would ban dual-currency social casinos and sportsbooks from operating there.
“I think we can get it done this session,” Siva said on Indian Gaming Association Conference Chairman Victor Rocha’s The New Normal webcast. “I really do, but it’s going to take a big effort from all the tribes.”
AB 831 wants to ban online sweepstakes companies that “simulate gambling or play gambling-themed games in a business establishment that directly or indirectly implements the predetermination of sweepstakes cash, cash-equivalent prizes, or other prizes of value, or otherwise connects a sweepstakes player or participant with sweepstakes cash, cash-equivalent prizes, or other prizes of value.”
In a state that’s battling a push for legal sports betting, illegal offshore operators, and the muddy waters of daily fantasy sports, Siva called the sweepstakes ban his tribal group’s “top legislative priority.”
“This legislation is take no prisoners,” IGA Executive Director Jason Giles said during the webcast. “This is a pretty strong bill moving through the California legislature.”
Taking action
Siva said that the tribal nations and the California legislature must attack sweepstakes operators from top to bottom.
“Otherwise, we’re just chasing after one individual company,” Siva said. “They shut that down, they start up another one. It has to be an entire fundamental change.”
Rocha said those operators have taken “billions and billions” of dollars from the Golden State, where tribal gaming compacts operate in-person casinos but no legal online gaming.
“Now is the time to take action,” Siva said. “This is one of those key moments where if we can’t come together and work on these things, we might start to see for the first time since we started this industry, we lose control of it. Those ramifications would be wide-reaching.”
Cleaning up the language
California does not have legal iGaming, and while there are multiple lawsuits filed by consumers, AB 831 can clear up where sweepstakes operators stand legally.
“I hope that the result of this bill being passed is they just pull up stakes and leave California,” said Michael Hoenig, vice president and associate counsel for the Yuhaaviatam of San Manuel Nation. “That would be ideal because that’s the whole goal to clarify that you can’t be here.”
That has worked in other states. Many sweepstakes companies have complied with cease-and-desist letters from state regulators. In New York, social gaming giant VGW decided to eventually halt operations in the Empire State even before a sweepstakes-banning bill was passed by the legislature.
“I think this goes to show you when people are awake, when people are focused, you can get action,” Rocha said. “When something is outrageous, these sweepstakes (companies) think they can come into the state and just take the money, and there are not going to be any ramifications, 34 states plus (Washington) D.C., say differently. This is just the beginning.”
California is looking to join states like Montana, Connecticut, and Nevada that have outlawed online sweepstakes gaming companies. Rocha has been leading the IGA’s campaign in a public battle to stop sweepstakes operators and has called for the “entire annihilation” of the sweepstakes industry nationwide.
“These are not sympathetic characters,” Rocha said. “They don’t create jobs. They don’t pay taxes. They’re not regulated. These are not offshore.”
Fighting back
However, the online sweepstakes companies aren’t giving up a massive, unregulated California market without a fight. The Social and Promotional Games Association (SPGA), a sweepstakes gaming industry group, released a statement denouncing the legislation.
“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.”
Tribal gaming leaders pushed back on the SPGA’s ideology during the webcast.
“Their arguments are about technological advancement, and the tribes only want to protect their market share,” Siva said. “This is about holding up the constitution of California. Our (tribal gaming) exclusivity is in the constitution. We’re about protecting laws, regulation. We’re not about stopping innovation. I think their argument is full of hot air.”
