for early access to the latest igaming videos!
and get the latest igaming news first!
The California Senate is making progress on legislation aimed at banning dual-currency sweepstakes games. Assembly Bill 831, which targets online contests that mimic casino-style gambling, has successfully passed the Senate Committee on Public Safety with unanimous support, receiving a 6-0 vote. The bill now moves to the Senate Appropriations Committee for further consideration.
Sponsored by Assemblymember Avelino Valencia, AB 831 focuses on sweepstakes platforms that utilize currencies like Gold Coins and Sweeps Coins, commonly associated with operators such as Chumba Casino and LuckyLand Slots.
Valencia argues that these platforms undermine the voters’ intent and bypass the state’s gaming regulations. He stated, “Players are able to convert these winnings to actual cash, and that’s the issue.”
If the bill becomes law, those found in violation could face significant penalties, including fines ranging from $1,000 to $25,000, up to a year in county jail, or both. This legislation reflects California’s ongoing efforts to regulate gaming practices and ensure that they align with established laws.
Sweepstakes Creates Dangerous Environment for Californians, Claims Tribes
During the recent hearing, Assemblymember Avelino Valencia reassured the committee that amendments to the bill aimed at preventing overreach had been made. These adjustments include protections for individuals and third-party service providers, such as financial institutions and geolocation firms, protecting them from liability if they inadvertently support sweepstakes platforms.
Valencia emphasized that the focus of AB 831 is solely on the entities running these sweepstakes, stating, “This is solely going to focus on the entities that are providing the sweepstakes types of platforms.”
Valencia and other advocates believe that unregulated sweepstakes casinos pose significant risks to California’s tribal gaming system and public safety.
Johnny Hernandez, vice chairman of the San Manuel Band of Mission Indians, voiced concerns during his testimony, declaring, “The dual-currency model creates a dangerous environment where Californians, especially young and vulnerable users, are exposed to real-money, gambling-like experiences with none of the consumer protections.”
Tribe Social Casinos Are Fully Free-to-Play
Hernandez pointed out that while the San Manuel tribe offers a social casino platform, it is free to play, does not utilize dual-currency mechanics, and does not offer cash prizes. San Bernardino County District Attorney Jason Anderson echoed these sentiments, highlighting the dangers posed to youth in today’s digital landscape.
He noted, “Increased access to online gambling and virtual betting, coupled with the lack of strong age verification safeguards, puts our youth at serious risk of developing crippling gambling addiction.”
Anderson also addressed concerns that the bill might criminalize players, clarifying, “We’re not seeking to penalize the player. Provisions in this bill are only intended to penalize the companies, often offshore, which are the source of this illegal gambling.”
Supporters of the bill reminded the committee that California voters had granted exclusive gaming rights to Native American tribes over 25 years ago. Valencia pointed out that tribal gaming has contributed over $25 billion to the state and created more than 112,000 jobs. He argued that allowing unregulated sweepstakes platforms to thrive undermines this voter mandate and the protections it was designed to ensure.
Opposing Coalition Raises Concerns
While AB 831 gains traction, it faces mounting opposition from various groups. The Social and Promotional Games Association (SPGA) and the Social Gaming Leadership Alliance (SGLA) argue that the bill’s broad language could threaten legitimate marketing promotions and sweepstakes that are not connected to gambling.
Bill Gantz, an attorney for the SGLA, challenged the assumption that sweepstakes casinos are illegal, stating, “It’s just like a lot of other sweepstakes. People can make a purchase to enter, but they can also enter for free.”
He called for lawmakers to gather more evidence about potential harm rather than hastily move to ban these platforms. Gantz also highlighted that regulating sweepstakes could potentially provide California with $149 million in annual sales tax revenue.
Critics have also accused tribal groups of selective enforcement. The SGLA pointed out, “The testimony claiming our industry lacks age verification is not only false, it’s hypocritical,” referencing San Manuel’s own social casino, which they claim does not enforce age verification.
The coalition opposing the bill has received support from civil liberties organizations and corporate entities. The SPGA has allied with the American Civil Liberties Union of California and the Association of National Advertisers, which includes major companies like Google and NBCUniversal. These groups warn that the bill could unintentionally disrupt legal promotional activities.
“The bill, as written, could have unintended consequences for lawful promotional practices without offering clear consumer protections,” an SPGA spokesperson stated. The SPGA has formally communicated its concerns to Assemblymember Valencia, emphasizing the potential risks associated with the proposed legislation.
Source: YogoNet
