The California State Legislature has approved a ban on sweepstakes casino operators in the state.
The controversial AB 831 bill has now moved to the desk of Governor Gavin Newsom for final approval.
He has until October 12 to either sign it into law, or to veto the bill, but if the deadline passes without any further action from the governor, the new legislation banning sweepstakes casino sites will come into force by what’s referred to as a ‘pocket signature’.
The AB 831 bill passed through the California Senate last Monday with a 36-0 vote in favour and headed to the Assembly for concurrence.
That approval came on Friday (September 12) with a 63-0 vote, handing the responsibility to Governor Newsom to make it official.
What Is California’s AB 831 Bill?
AB 831 basically makes it unlawful for anybody to operate, promote or engage with sweepstakes casinos that employ dual-currency systems.
During one of its reading processes on September 4, the bill was amended so that state lottery games and sweepstakes promotions run by non-gambling companies such as McDonalds and Starbucks would be excluded from any potential ban.
During the Assembly meeting, member Avelino Valencia confirmed that the final amendment ensured that the bill would only affect its intended targets, dual-currency sweepstakes that resemble gambling and offer payouts, rather than promotional campaigns run by companies outside of the industry.
Shane Levine of the Social and Promotional Games Association spoke against the bill and outlined the potential revenue that would be lost to the Golden State.
Levine quoted an estimate of up to $300 million could be generated if a proper framework of regulatory oversight was employed rather than an outright ban which would close the door on any potential revenue stream.
Sweepstakes operators had been rebuffed in their attempts to collaborate on some form of legal oversight, leading to fears that a ban would simply drive users to offshore casinos which the state has no regulatory control over.
The 63-0 vote was a clear indication that California is standing firmly behind the proposed legislation, and it will no doubt be viewed with interest nationwide.
California is the largest state in the US by population with an estimated 39.4 million residents in 2024.
Ongoing Exodus Of Sweepstakes Providers
Some sweepstakes operators and providers have not hung around to find what Governor Newsom decides.
At the start of this month Pragmatic Play announced that it was going to withdraw completely from the US sweepstakes market.
The online casino games supplier said it would stop licensing its games to US sweepstake operators “in light of regulatory developments and evolving legislation”.
Evolution soon followed, withdrawing its sweepstake games from online casino Stake.
Last week they were joined by Playtech, who announced it had terminated relations with all sweepstakes operators in California.
Although Playtech had not been named in any ongoing legal actions, it felt prompted to act after the Los Angeles District Attorney’s Office started proceedings against the operator Stake and its suppliers, including Evolution, Pragmatic Play and Hacksaw, centred around the legality of the sweepstakes model.
At the start of August New Jersey took legislative action against sweepstake casino sites as its own bill A5447 was signed into law and similar bans have been introduced in Connecticut and Montana.
