California Moves Closer to Prohibiting Sweepstakes with Progress of AB 831
California is advancing legislation that could ban dual-currency online social casinos, more commonly known as sweepstakes. This bill, called Assembly Bill 831, has successfully moved forward and is currently advancing to the state Senate.
Assembly Bill 831 Gains Momentum
AB 831 targets sweepstakes-style online casinos that operate on a dual-currency system. These platforms often attract players through a free-to-play format, but users can purchase virtual currency to extend their gameplay. This business model has sparked controversy, with many regulators and licensed gambling operators nationwide criticizing sweepstakes as a form of illegal gambling, despite claims from operators defending their legality.
The bill reflects a growing pushback against sweepstakes gambling seen in multiple states. While some social casinos have already ceased operations due to regulatory pressure, most legislative attempts to restrict or ban sweepstakes have not yet succeeded.
Potential Penalties Under the Proposed Law
Following the failure of a previous anti-sweepstakes attempt, AB 831 is making steady progress. It recently received unanimous support (7-0) from the Senate Appropriations Committee, moving it closer to a Senate vote. However, approval by the full Senate is not guaranteed.
If enacted, AB 831 would impose significant penalties on violators. These fines could range from $1,000 to $25,000, and in severe cases, offenders might face imprisonment for up to one year.
Divisions Among California’s Tribal Gaming Communities
The bill has sparked differing opinions within California’s tribal gaming groups. While some organizations like the Yuhaaviatam of San Manuel Nation and the California Nations Indian Gaming Association support the legislation, others strongly oppose it. Notable opponents include the Sherwood Valley Band of Pomo Indians, Big Lagoon Rancheria, and the Kletsel Dehe Wintun Nation of the Cortina Rancheria Tribe.
Opposing tribes argue that the bill does not represent a united tribal stance and express concerns about the economic impact of shutting down what they describe as legitimate and regulated digital gaming enterprises.
Meanwhile, enforcement efforts continue locally. For example, the city of Los Angeles has filed lawsuits against Stake.us and associated vendors, accusing them of violating state gambling laws.
