California lawmakers unanimously approve online sweepstakes ban, bill heads to Governor Newsom

California’s legislature has unanimously approved a ban on online sweepstakes gaming, sending the bill to Governor Gavin Newsom, who has until October 12 to sign or veto it.

Assembly Bill 831 cleared the Assembly on Sept. 12 by a vote of 63-0, after advancing through the Senate without opposition. The Governmental Organization Committee also backed the measure 20-0, though several lawmakers voiced frustration that consumers had not been consulted before the ban was advanced.

Supporters included the Yuhaaviatam of San Manuel Nation, the California Nations Indian Gaming Association (CNIGA), the Sports Betting Alliance (SBA) and the California Chamber of Commerce. Opponents ranged from the Social Gaming Leadership Alliance (SGLA) and social gaming operator VGW to the Social and Promotional Games Association (SPGA) and smaller tribes such as the Kletsel Dehe Wintun Nation of the Cortina Rancheria.

Bill sponsor Assemblymember Avelino Valencia and tribal leaders argued the prohibition applies only to dual-currency sweepstakes that mimic gambling and offer payouts, not to ordinary promotional contests.

Opponents countered that the ban would wipe out a $1 billion industry and block efforts to create a regulatory framework capable of generating up to $300 million in annual revenue.

“The bill isn’t about clarifying the law. It’s about changing the law and claiming sweepstakes is gambling to give a few wealthy tribes exclusivity while shutting down a legal industry that generates significant economic activity across California,” said Shane Levine of the SGLA.

Eric Wright of the Kletsel Dehe Wintun Nation added: “We didn’t win the geographic lottery that blessed some tribes with prime casino locations near major tourism and population centers. It’s deeply troubling that tribes who’ve already achieved massive success through location advantages now seek to slam the door shut on emerging opportunities for those of us who weren’t blessed with prime real estate.”

Some lawmakers raised concerns over the process. “What are we really trying to accomplish? Are we really trying to help consumers who unwittingly get involved in dual-currency gaming? I’m just struck by the fact there’s no consumer interest represented. I don’t see any letters from a consumer group in the packet,” said Assemblymember Diane Dixon.

Committee Chair Blanca Rubio added: “I encourage all of us to start working with some of those consumer groups, because I know this is not going to be the last bill we hear on this topic. I do foresee that this issue is going to continue with not just sweepstakes, but other forms of online gaming.”

California would become the latest, and largest, state to outlaw sweepstakes gaming. Governors in Connecticut, Montana, Nevada and New Jersey have signed similar measures into law this year, while a ban in New York awaits gubernatorial approval.