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The much-discussed legislation that would effectively ban California sweepstakes casinos landed on Gov. Gavin Newsom’s desk on Sept. 24 and has yet to be signed.
A representative of Assembly Bill 831’s sponsor, Assembly Member Avelino Valencia, said the governor has until Monday, Oct. 13, to sign it into law. AB 831 was not among the flurry of bills Newsom signed this week.
While the lack of a signature could be concerning for the bill’s backers, one of two scenarios will likely play out, both of which would lead to a ban on most online sweepstakes casinos in California.
Will Newsom sign the bill?
There’s no evidence from Newsom’s time in office that would suggest he’ll veto the bill. The governor has long been a supporter of federally recognized tribes in the state, and vetoing the bill would work against the tribes because it would continue the competition they face from sweepstakes casino operators.
The more likely scenario is that Newsom will either sign the bill or choose not to sign it, both of which will allow the bill to become law.
A ban on sweeps casinos in California would be a considerable blow for the industry. According to accounting firm KPMG, sweeps will generate more than $4 billion in revenue in the US this year.
Major sweeps operators such as McLuck and Chumba Casino, along with their competitors, will likely have to find ways to compensate for the substantial revenue loss they’ll face.
This year has been rough for sweeps
If AB 831 becomes law next week, it will represent the second major US gaming market this year to ban sweepstakes casinos. This summer, New Jersey Gov. Phil Murphy allowed a NJ sweeps ban to become law, barring operators in what has been a top-five gaming state since it launched sports betting and online casinos.
Smaller markets such as Connecticut and Montana have also banned sweepstakes casinos this year. Additionally, lawmakers in Massachusetts and Louisiana have proposed legislation that would ban sweeps in those states.
The recent pushback against sweeps stems from a few different groups. Federally recognized tribes that offer gaming see sweeps as a threat to their casino operations and partners. Interestingly, a handful of tribes in California came out against the ban because it blocks a tribal revenue stream.
Additionally, the American Gaming Association (AGA) expressed its opposition to sweepstakes casinos when it released a survey on the industry earlier this year. The survey revealed that sweeps customers believe they’re participating in real gambling.
The AGA’s opposition to sweeps is based on the platforms operating under different regulatory rules than online casinos.
Tres York, the AGA’s VP of government relations, said the lack of regulation around sweepstakes casinos puts players at risk.
“Sweepstakes casinos exploit legal loopholes to operate outside regulatory oversight without consumer protections, responsible gaming standards, or accountability.”
