The California Senate has voted 36-0 in favor of AB 831, a bill that restricts the operation and promotion of casino-style, sweepstakes-based online games in the state. AB 831 heads to the state Assembly, where an earlier version was approved.
The Assembly will take up the legislation as tribal entities in the state are divided in terms of support for AB 831. A few tribal organizations have partnered with the operators of sweepstakes casinos and claimed that AB 831 endangers their commercial interests.
The bill’s advancement also comes as the state has filed a civil lawsuit against the operator of a sweepstakes casino and its partners. All of this activity adds up to give California a significant impact on the future of sweepstakes casino gaming in the United States.
Senate Sends AB 831 Back to Assembly With Huge Changes
When AB 831 landed in the California Senate, it didn’t involve sweepstakes casinos at all. The original version addressed gaming compacts between the state and tribal gaming authorities.
The bill went through the “gut and amend” process in July, with a substitute from Assembly member Avelino Valencia taking the place of the original text. Because the Assembly technically already approved the bill, the Assembly could simply vote to concur with the Senate’s amendments despite the current version of AB 831 being completely different from the version the Assembly passed.
The Assembly has little time to debate AB 831 in committees if it wants to send the bill to Gov. Gavin Newsom in 2025. The deadline for sending bills to the governor in 2025 is Sept. 12.
However, in Calfornia, legislative sessions run for two years, beginning in odd-numbered years and ending in even-numbered years. If the Assembly does not vote on AB 831 before Sept. 12, it could pick the legislation back up in 2026.
Senate Tailored AB 831 to Address Concerns
In its current state, California AB 831 targets the offering of casino-style online games that utilize a dual-currency system to award sweepstakes prizes. The bill also has provisions that criminalize certain forms of promotion of the games.
Valencia’s draft underwent significant changes before the Senate approved it. Language was added and modified to avoid potential unintended consequences for other businesses in the state, for example.
Legislators also added text that requires prosecutors to establish that a person “knowingly” supported a banned sweepstakes game to convict them of the charges the bill lays out.
All of the amendments were made to address senators’ concerns expressed in committee hearings, and they were sufficient to gain unanimous support for AB 831. Various stakeholders will likely try to bend Assembly members’ ears to either create a repeat circumstance or deny that in the Assembly.
Divided Tribal Interests Lie Ahead for AB 831 in the Assembly
As AB 831 faces potential quick action in the Assembly, time could be short for both allies and opponents to wield their influence. There are tribal-led voices on both sides.
While AB 831 has support from the California Nations Indian Gaming Association and entities like the Yuhaaviatam of San Manuel Nation, four tribes have publicly issued statements opposing AB 831.
Oppositional arguments from these groups have included that the “current gaming landscape in California has created a stark economic divide among tribal nations.” At the same time, voices in favor of the bill have characterized the operation of sweepstakes casinos as a violation of their gaming compacts.
The stakes for sweepstakes operators in California are high, and not just because of California’s substantial representation in their customer base. The ripple effect across the US could be substantial, too.
AB 831’s Enactment Changes Game For Sweepstakes Casinos
If AB 831 receives Assembly approval and gets a signature from Newsom, the result could be an acceleration of vendors pulling out of the industry. Additionally, more states may become motivated to enact similar laws.
Pragmatic Play became the latest software provider to stop servicing sweepstakes casinos, making that decision on a nationwide basis. A new statute making them potentially targets of criminal prosecution in California could hasten such actions elsewhere.
Even if AB 831 does not become law, though, sweepstakes casinos and their partners are not in the clear in California. The state has sued the operator of Stake.us and several of its vendors for violating existing gambling statutes.
Successful litigation could lead to more similar lawsuits being filed against other operators. The bottom line is that the future of sweepstakes casinos is at stake in California’s courts and legislative halls.
