Legislation banning sweepstakes in California passes its first bill
A bill banning sweepstakes in California has unanimously passed its first bill at the Senate Government Organization Committee.
With a 15-0 committee vote on July 8, the AB 831 bill will now be discussed by the Public Safety Committee on July 15.
However, the bill has already been faced with criticism from companies within the industry. VGW, who own sites including LuckyLand Slots and Chumba Casino, demanded lawmakers should focus on regulation and not a “rushed, gut-and-amend legislation”.
In a statement, they also referenced how a regulated industry as opposed to a banned one would protect customers whilst generating a new source of income for the state. They said:
“The economic opportunity is significant. Based on industry projections by Eilers & Krejcik, California could generate annual revenue of $149m through tax sale alone.
“Currently, there is no method for us to pay sales tax in California because ours is a digital product, but this is something we would be happy to do under an appropriate framework.
“We are also open to other potential sensible taxation frameworks and/or revenue streams to benefit the people of California.”
In addition, the Social and Promotional Gaming Association (SPGA) noted that the bill by Assembly member Avelino Valencia was “too vague, too rushed, and too risky.”
They added: “California has always been the state of ‘more’: more freedom, more innovation, more opportunities and more discovery. AB 831 pulls in the opposite direction. It would make California smaller: less open, less creative, less bold.”
The trade body also recognized the language of the legislative that would make it a crime to operate, promote, or support all sweepstakes sites.
Those found to violate this law would face a punishment of either a fine of up to $25,000 or a one-year prison sentence in a county jail. The sweepstakes news follows California’s latest efforts to make daily fantasy sports betting illegal in the state too.
“Because AB 831 fails to define key threshold terms like what qualifies as an ‘online sweepstakes game,’ any number of popular promotions from blue-chip companies that are located in California or serve customers in California could violate the law if AB 831 is passed”, argued the SPGA.
“While these companies may not be obvious enforcement targets, even their theoretical inclusion highlights the poor construction of the proposed law and the high probability of unintended consequences.”
However, when speaking about the bill, Valencia argued: “We cannot look the other way while these platforms exploit legal grey areas. These operations undermine the voter-approved framework that affirms Tribal governments’ sovereign right to conduct gaming in California.
“AB 831 strengthens that framework and ensures gaming in California remains fair and accountable.”
However, despite the Assembleymakers arguments, so many of these companies headquarters are located outside the state of California and will therefore offer no benefit to the state. Instead, with the misleading language, players could be held accountable as well as a range of Californian based third-parties.
