California Bill Sparks Controversy Over Online Sweepstakes Ban

Controversy Surrounding Assembly Bill 831 in California

California is currently embroiled in a contentious debate over Assembly Bill 831 (AB 831), a legislative proposal aiming to prohibit online sweepstakes-style games within the state. Introduced by Assemblymember Avelino Valencia, the bill has generated significant opposition from advocates of digital gaming. Notably, the Social and Promotional Games Association (SPGA) has emerged as a prominent critic of this initiative.

SPGA Voices Concerns Over AB 831’s Impact on Digital Promotions

The SPGA has strongly urged lawmakers to reject AB 831, arguing that the legislation is overly broad, rushed, and poses potential harm to California’s economy. Representing companies involved in promotional and social gaming, the association warns that this bill could effectively make numerous lawful digital entertainment and promotional platforms illegal. Many of these platforms have operated compliantly for years.

The organization highlighted that changes to the bill were made swiftly in late June without consulting key stakeholders or conducting a detailed examination. They criticized the lack of precise definitions for terms like “dual currency systems” and “cash equivalents,” raising fears that typical reward programs and marketing activities—including popular loyalty programs from major brands—could be unintentionally targeted.

Additionally, the SPGA expressed alarm over the enforcement provisions in AB 831. The current wording could penalize not only game operators but also advertisers, payment processors, and software developers involved in sweepstakes. Under the bill, individuals or entities deemed to be “supporting” these games could face fines up to $25,000 and potential imprisonment for up to one year.

Wider Debate Highlights Clash Between Traditional Gambling and Digital Gaming

Leaders within the SPGA caution that changing gambling definitions too broadly may inadvertently harm legitimate business practices. They emphasize that many platforms targeted by the bill already implement rigorous consumer protections, such as age verification and fraud prevention measures.

Furthermore, the group questions the necessity of AB 831, noting a lack of evidence linking these sweepstakes games to consumer harm. They suggest that some proponents of the bill may have conflicts of interest, as some sponsors have promoted similar gaming formats lacking robust player safeguards.

The SPGA warns that passing AB 831 could damage California’s reputation as a hub for innovation and economic growth without effectively protecting consumers. They call on policymakers to pause the bill’s progress, encouraging thorough study and open dialogue rather than rushing legislation. This ongoing dispute highlights the broader tension between established gaming entities and the evolving landscape of digital entertainment.