California’s Anti-Sweepstakes Bill Passes Senate

A Deepening Tribal Divide

The central conflict surrounding AB 831 is a deepening divide within California’s tribal community. While the state’s largest and most established gaming tribes have championed the bill as a necessary measure to protect their exclusive gaming rights, a growing coalition of smaller, more rural tribes has vehemently opposed it.

These opposing tribes argue that the bill is an existential threat to their economic survival. For geographically isolated tribes without the benefit of a large casino near a major metropolitan area, partnerships in the digital gaming space are seen as one of the few viable paths to economic self-sufficiency.

Dennis Ramirez, Chairman of the Mechoopda Indian Tribe of Chico Rancheria, one of the opposing tribes, stated that AB 831 would “curtail promising digital commerce avenues that represent critical supplementary income sources.” He argued the bill would “effectively close off new revenue opportunities that could help level the playing field for economically disadvantaged tribal communities.”

The opposing tribes have also condemned the legislative process, accusing the bill’s sponsors of using a “gut-and-amend” maneuver to rush the sweeping ban through without meaningful consultation.

The Industry Under Siege

As the legislative battle has raged, the sweepstakes industry itself has come under a coordinated assault on multiple fronts, creating an increasingly hostile environment for operators in the state.

• In a major development, High 5 Casino, a prominent operator, announced it would cease all operations in California by mid-September. The decision to flee the state came after a San Francisco judge dealt the company a significant legal blow, denying its motion for arbitration and allowing a class-action lawsuit alleging illegal gambling to proceed.
• In August, the Los Angeles City Attorney filed a massive civil lawsuit against the industry giant Stake.US and its key technology suppliers, including Evolution and Pragmatic Play, accusing them of running an illegal gambling enterprise.
• Shortly after, the major game supplier Playtech announced it was pulling its content from all sweepstakes casinos in the state.

This combination of legislative, legal, and commercial pressure has put the entire sweepstakes industry on the defensive, making the threat posed by AB 831 even more potent.

The Final Hurdles

The bill, which was significantly amended in the Senate, must now go back to the Assembly for a concurrence vote. Because the current version is substantially different from the one the Assembly originally passed, it will need to be re-approved.

If the Assembly concurs, the bill will then head to the desk of Governor Gavin Newsom, who will have the final say on whether to sign it into law.