California’s Anti-Sweepstakes Bill Sets August Date for Crucial Senate Hearing

High-Stakes Hearing Ahead

The upcoming hearing, scheduled for 10 a.m. PST, will be the bill’s third and most significant test in the state Senate, according to gaming law expert Daniel Wallach. “AB 831 would ban online sweepstakes casinos and impose criminal penalties on operators, suppliers, promoters and media affiliates,” Wallach wrote in his LinkedIn post.

A pass from the Appropriations Committee would send the bill to the full Senate floor for a vote.

The legislation, authored by Assemblymember Avelino Valencia, has already cleared the Assembly and two Senate committees. Its progress has been swift, sparking a heated debate between a powerful pro-ban coalition and a vocal opposition of social gaming companies.

Battle Lines Are Drawn

A powerful coalition of tribal nations and major sports betting operators is backing the bill. The California Nations Indian Gaming Association (CNIGA) argues that sweepstakes casinos exploit legal loopholes to offer casino-style games, undermining the state’s voter-approved tribal gaming framework. They aim to protect a $25 billion industry that supports over 112,000 jobs.

The tribes are joined by the Sports Betting Alliance, which represents industry giants like FanDuel, DraftKings, and BetMGM. These companies support AB 831 as a way to ensure a stable and regulated gaming environment, arguing that unregulated platforms lack essential consumer protections for age verification and anti-money laundering.

An “Overly Broad” and “Rushed” Bill

Opposition to the bill comes from groups like the Social Gaming Leadership Alliance (SGLA) and the Social and Promotional Games Association (SPGA). They argue AB 831 is “too vague, too rushed, and too risky.” They claim the bill’s imprecise language, particularly its definition of a “dual currency system,” could accidentally criminalize legitimate loyalty programs and even the state lottery’s “second chance” promotions.

Critics have also slammed the “gut-and-amend” process used to advance the bill, where the anti-sweepstakes language was inserted into a previously unrelated piece of legislation. They argue this has prevented proper debate and stakeholder input, and that the bill could stifle a $10 billion digital gaming economy in California.

Part of a Broader Crackdown

The push to ban sweepstakes casinos is part of a broader effort in California to rein in unregulated gaming. The move comes on the heels of Attorney General Rob Bonta’s recent legal opinion declaring daily fantasy sports (DFS) illegal in the state.

California’s actions mirror a national trend. States like New York, Connecticut, and Montana have already passed similar bans on sweepstakes casinos. This places AB 831 at the forefront of a nationwide regulatory tightening.

If the bill passes the Appropriations Committee, it could reach the Senate floor before the legislative session ends on September 12, setting the stage for a final decision on the future of sweepstakes gaming in the state.