California’s AB 831 Sweepstakes Ban Advances
California’s Assembly Bill 831 (AB 831), aimed at banning online sweepstakes casinos, cleared its first Senate hurdle with a 10-0 vote (five abstentions) in the Senate Governmental Organization Committee. Authored by Assemblymember Avelino Valencia and backed by tribal nations, the bill targets “dual-currency” sweepstakes platforms that mimic casino-style gambling, which proponents argue exploit legal loopholes, undermining California’s voter-approved tribal gaming framework.
Legislative Progress and Tribal Support
Introduced in February and passed by the Assembly in May, AB 831 was amended in June to explicitly prohibit sweepstakes casinos offering cash prizes via dual-currency systems.
“These platforms circumvent the state’s gaming framework,” Valencia stated, emphasizing the need to protect tribal sovereignty. The California Nations Indian Gaming Association (CNIGA) and the Yuhaaviatam of San Manuel Nation co-sponsor the bill, with CNIGA Chairman James Siva noting it protects a $25 billion economic engine supporting 112,000 jobs.
Tribal leaders, including Soboba Band’s Isaiah Vivanco, argue that unregulated platforms lack consumer protections like age verification and anti-money laundering measures, risking fraud.
The Sports Betting Alliance, representing FanDuel, DraftKings, and BetMGM, also supports AB 831, aligning with tribes to ensure a regulated gaming ecosystem.
Opposition and Concerns Over Vague Language
Opponents, including the Social Gaming Leadership Alliance (SGLA) and Social and Promotional Games Association (SPGA), call AB 831 “too vague, too rushed, and too risky.”
The SPGA warns that its broad language, lacking definitions for “dual-currency system,” “indirect consideration,” and “cash equivalents,” could criminalize legitimate promotions like Starbucks’ “Starbucks for Life” or California’s Lottery 2nd Chance Program.
“This is not targeted regulation; it’s a sweeping threat to lawful expression,” the SPGA stated, noting potential $25,000 fines and one-year jail terms for operators, payment processors, and even influencers like Ryan Seacrest or Drake.
SGLA’s Bill Gantz argued, “This bill is by competitors to eliminate competition,” highlighting that San Manuel’s PlayOnline operates a social casino, potentially exempt due to its non-cash prize structure.
Controversial “Gut-and-Amend” Process
The bill’s “gut-and-amend” approach, inserting sweepstakes ban language into an unrelated tribal gaming compact bill, drew criticism.
Senators Rosilicie Ochoa Bogh and Angelique Ashby expressed concerns over the rushed process, with Bogh stating, “This is what happens when we don’t go through the proper process.”
Ashby flagged risks of penalizing players, urging tighter language to protect consumers. Valencia committed to amendments exempting cardrooms and clarifying that players face no penalties, but critics, including the World Poker Tour, argue the bill lacks transparency and stakeholder input.
Both SGLA and SPGA advocate for a two-year bill to allow comprehensive review, warning that the current pace could stifle California’s $10 billion digital gaming economy.
AB 831 aligns with California’s crackdown on unregulated gaming, including Attorney General Rob Bonta’s opinion declaring daily fantasy sports illegal. Similar bans have passed in New York, Connecticut, and Montana.
The bill’s next stop is the Senate Public Safety Committee on July 15, followed by the Appropriations Committee if approved. A full Senate vote could occur before the September 12 session ends, with possible Assembly revisits for amendments.
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