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Open letter pleads with governor to oppose bill that would ban operation in California
Multiple online sweepstakes casino operator executives joined the Social Gaming Leadership Alliance (SGLA) in asking California Gov. Gavin Newsom to veto AB 831, which would outlaw such online gaming in the state.
The open letter to the governor, sent Friday via the SGLA, called the bill sponsored by Assemblyperson Avelino Valencia a “misguided, rushed prohibition” that would “destroy a thriving $1 billion California industry.” Despite Valencia’s bill being a gut-and-amend of a previous bill, it faced little opposition in both chambers of government in a winding path leading to Newsom’s desk.
There was no debate over AB 831 in the Assembly, which passed it 63-0 on Sept. 12, three days after the Senate passed it by a 36-0 vote. The bill was sent to the governor’s desk last Wednesday, and since it passed while the legislature was in session, Newsom has 12 days, excluding Sundays, to sign or veto the bill. It can also become law if he does not sign the bill after the 12th day.
A who’s who of sweeps execs
Among those whose signatures are on the letter to Newsom are VGW Chief Executive Officer Laurence Escalante, PlayStudios founder and CEO Andrew Pascal, and ARB Interactive CEO Patrick Fechtmeyer, in addition to SLGA Executive Director Jeff Duncan. The letter repeats the desire to negotiate and make online sweeps a regulated, licensed industry in California, with the SGLA claiming such a process would lead to “at least $200 million-$300 million annually in new tax revenue through proper regulation and licensing.”
In addition to missing out on potentially hundreds of millions of dollars in tax revenue by failing to regulate sweeps, the SGLA claims passing AB 831 would result in the elimination of more than $730 million in marketing spend on California platforms including Meta and Google and eliminate up to 1,200 high-paying jobs in the technology field and $70 million in technology infrastructure and cloud services spending.
Some tribes oppose the bill, but …
California’s Indian Country almost unanimously supports the bill. But four non-gaming or limited-gaming Northern California tribes have stood in support of AB 831 with the SGLA. Members of those four tribes — most notably the Kletsel Dehe Wintun Nation — registered their opposition by voice at a committee hearing prior to the bill’s full passage.
“The Tribal Alliance of Sovereign Indian Nations (TASIN) applauds the bipartisan, unanimous passage of Assembly Bill 831,” a spokesperson told Casino Reports via email Sept. 12 after the bill passed. “This important win for California safeguards consumers and closes dangerous loopholes exploited by illegal online sweepstakes casinos.”
TASIN has 13 members, including two of the most successful Southern California gaming tribes: the Pechanga Band of Mission Indians and the Yuhaaviatam of San Manuel Nation. The SGLA argues the bill would eliminate “tribal economic opportunities” for members that lack “geographic advantages.”
A potential close out in a third large market
There has been plenty of legislative action regarding online sweepstakes casinos in the calendar year, but if AB 831 does indeed become law, it would be a tough blow for the industry. California would be the second-large market state to enact a ban, along with New Jersey. Additionally, similar legislation has passed in New York but has yet to be sent to Gov. Kathy Hochul for her signature.
While Louisiana Gov. Jeff Landry vetoed a bill that would have banned online sweeps, the state’s attorney general issued a written opinion declaring them illegal. That cleared the way for the state’s Department of Revenue to file a lawsuit against VGW and WOW Vegas seeking $44.4 million in taxes, interest, and unpaid penalties for offering digital gaming in the Pelican State.
Montana, Nevada, and Connecticut also all enacted bills banning sweepstakes gaming this summer.
