Assembly Bill 831 (AB 831), sponsored by Assemblymember Avelino Valencia, passed through its second major hurdle on July 15. It passed through the Senate Public Safety Committee with a 6-0 vote. Last week, the Senate Governmental Organization Committee advanced the proposed legislation with a 15-0 vote.

AB 831 now moves to the Senate Appropriations Committee, which has an upcoming meeting on August 18.

Bill Opposition Grows

AB 831 receives significant backing from tribal gaming representatives and industry associations such as the American Gaming Association and the Sports Betting Alliance. However, it’s also gathering a large coalition of opponents including the SPGA, which represents the interests of sweepstakes casinos and advocates for responsible social casino gaming.

On July 14, the SPGA announced that several high-profile organizations have joined efforts against the bill:

• ACLU California Action
• American Transaction Processors Coalition
• Association of National Advertisers
• Californians United for a Responsible Budget
• SPGA
• Social Gaming Leadership Alliance
• Virtual Gaming World

These groups represent a wide range of interests, from civil liberties to major corporate brands. For example, Google, General Mills, and NBCUniversal are members of the Association of National Advertisers.

Meanwhile, the American Transaction Processors Coalition represents financial institutions like Bank of America and Paysafe.

In a press release, SPGA emphasized the importance of this broad coalition, stating:

“This diverse coalition, including civil liberties advocates, leading businesses, and industry groups, reflects a shared belief that the bill, as written, could have unintended consequences for lawful promotional practices without offering clear consumer protections.”

Opponents have criticized the bill’s overly broad, rushed, and risky language, which was introduced via a “gut-and-amend” process that allowed for sweeping changes late in the legislative cycle.

Critics argue that the bill’s expansive provisions risk criminalizing not only operators but also suppliers, payment processors, and celebrity endorsers.

Proponents Stress Tribal Sovereignty and Consumer Protection

As with prior hearings, proponents of the ban included tribal gaming groups. They include the Yuhaaviatam of the San Manuel Nation, the California Nations Indian Gaming Association (CNIGA), and the Tribal Alliance of Sovereign Indian Nations (TASIN).

They argue that they hold exclusive rights to regulated gambling in California. Sweepstakes casinos undermine this exclusivity by operating illegally.

San Bernardino County District Attorney Jason Anderson spoke in favor of the prohibition. He noted that sweepstakes casinos lack consumer protection tools to prevent minors from accessing the platforms.

Anderson indicated that multiple states have now banned sweepstakes casinos.

He also clarified that the AB 831 language does not prohibit traditional sweepstakes. Furthermore, he added that the bill and the District Attorney’s office are not interested in penalizing players, but the operators, which are often offshore companies.

Legal Concerns and Planned Amendments

In opposition, Duane Morris partner Bill Gantz pointed out that some tribal groups operate social casinos with prizes of real-world value without any regulation or oversight.

He argued that there’s no evidence to support the claims of potential risks associated with the platforms. He added that they operate within California’s laws.

Meanwhile, in a written statement, the ACLU California Action warned that the bill’s broad language could potentially criminalize individuals involved in legitimate online sweepstakes, not just operators of sweepstakes casinos.

Responding to these concerns, the bill sponsor told the committee that upcoming amendments will clarify the bill’s scope:

“Things like payment processors, financial institutions, geolocation providers, media affiliates and also individuals would not be held liable if this bill were to pass. This is solely going to focus on the entities that are providing the sweepstakes types of platforms.”

The committee chair, Senator Jesse Arreguín, added that committee members and Valencia were able to come up with amendments that will focus on the operators and not other businesses and individuals.

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With a 15-0 vote, the committee passed AB 831 and advanced it to the Public Safety Committee.

The committee has a scheduled hearing on July 15. Should the second committee approve the bill, it would move to a Senate floor vote. It will then return to the Assembly, which passed it in May, if further amendments are made.

Tribes and Sports Betting Operators Urge Ban

During the roughly 45-minute session chaired by Senator Steve Padilla, representatives from the Native Tribes, including the San Manuel Nation and the California Nations Indian Gaming Association (CNIGA), argued for closing loopholes that allow unregulated sweepstakes casinos to operate in the state.

Representatives from the Sports Betting Alliance (SBA), a trade group representing sports betting operators, echoed the concerns of the tribes.

The SBA emphasized that these platforms undermine tribal gaming exclusivity, threaten regulated markets, and lack proper consumer protections.

VGW, SPGA Call for Regulation Instead of Prohibition

Opponents, including VGW and the Social Gaming Leadership Alliance (SGLA), contested that the bill is overly broad, rushed, and risks criminalizing players and legitimate businesses.

In its opposition argument included in the committee’s bill analysis, VGW, the parent company of Chumba Casino, LuckyLand Slots, and Global Poker, asks lawmakers to scrap the “rushed, gut-and-amend legislation.” The company says they should instead focus on regulation.

VGW states that it aims to collaborate with lawmakers to establish a regulatory framework that will protect consumers while generating a new revenue stream for the state. The operator notes:

“The economic opportunity is significant. Based on industry projections by Eilers & Krejcik, California could generate annual revenue of $149 million through sale tax alone. Currently, there is no method for us to pay sales tax in California because ours is a digital product, but this is something we would be happy to do under an appropriate framework. We are also open to other potential sensible taxation frameworks and/or revenue stream to benefit the people of California.”

Meanwhile, the Social and Promotional Games Association (SPGA) called AB 831 “too vague, too rushed, and too risky.” The SPGA is a trade group representing the interests of the sweepstakes casino industry and advocating for responsible social casino gaming.

The association warns that the bill threatens free speech and legitimate commerce. It exposes app developers, influencers, and advertisers to harsh penalties simply for “supporting” these games.

The SPGA stresses that no evidence of consumer harm has been presented. It added that nearly 20,000 Californians have spoken in favor of sweepstakes casinos. Meanwhile, the bill would damage lawful, popular entertainment and major brand promotions.

Like VGW, SPGA asks lawmakers to reject AB 831 and instead create a regulatory framework.

Lawmakers Express Concerns Over Process and Scope

While the sweepstakes casino ban bill, introduced by Assemblymember Avelino Valencia at the end of June, passed unanimously, several lawmakers raised concerns about the process’s transparency, legal reach, and potential unintended consequences.

Senators also questioned the urgency surrounding the bill, especially as the sweepstakes provisions were inserted into an unrelated tribal gaming bill, a “gut-and-amend” approach.

The legislation targets operators, suppliers, payment processors, and celebrity endorsers. One such endorser is Ryan Seacrest, who is facing a lawsuit over his involvement with Chumba. However, there was confusion about whether it also targeted users of sweepstakes casinos.

Valencia stated that there will likely need to be a change in the language to clarify that it doesn’t include users. Additionally, he agreed to remove references to cardrooms from the bill to secure neutrality from that sector. The Assemblymember clarifies that the focus remains on sweepstakes operators and their support networks.

Aside from sweepstakes casinos, cardrooms, and daily fantasy sports (DFS) operators are also under threat in California. Attorney General Rob Bonta has announced sweeping changes to cardroom regulations, although his proposals have faced significant backlash. He also recently issued a legal opinion declaring that DFS is illegal in California.

These overlapping efforts reflect a broader crackdown on unregulated and gray-area gaming activities across California.

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New York’s Assembly passed the bill on Tuesday, which will prohibit any platform that “utilizes a dual-currency system of payment allowing the player to exchange the currency for any cash price, cash award or cash equivalents, and simulates casino-style gaming”. 

Operators that violate the rules face fines ranging from $10,000 to $100,000.

The bill was first proposed in the Senate by Sen. Joseph Addabbo and was voted 57-2 in favor last week, leaving it only needing Gov. Huchal’s signature. 

Bill Criminalizes Innovation, Says SPGA

Two prominent sweepstakes advocate groups, the Social and Promotional Gaming Association (SPGA) and the Social Gaming Leadership Alliance (SGLA), have urged Huchal to veto the bill. 

A statement issued on the SPGA’s website read: “The Social and Promotional Games Association (SPGA) strongly urges Governor Kathy Hochul to veto SB5935, a shortsighted bill that threatens to kill investment, stifle innovation, and undermine New York’s position as a national leader for tech and digital entertainment.”

The statement continued, “This bill doesn’t just target sweepstakes, it sends a chilling message to anyone looking to invest in the next generation of gaming innovation.”

“Nearly every form of online gaming we know today, including companies like FanDuel, a New York-based success story, began as pre-regulated concepts. This legislation criminalizes that innovation cycle,” the SPGA adds. 

The statement then cites the example in Louisiana, where Governor Jeff Landry vetoed a similar bill banning sweepstakes casinos last week. 

Landry said the legislation, which had been unanimously backed in both chambers, was unnecessary as the Louisiana Gaming Control Board already has sufficient authority to target illegal gambling sites. 

As proof of this, the Board issued 40 cease-and-desist letters to a variety of offshore betting sites and sweepstakes operators this week. 

SGLA Says Bill Will Hurt Business

The SGLA issued a similar statement criticizing the bill. The group, established last month, is led by sweepstakes operator VGW, the parent company of Chumba Casino, LuckyLand Slots, and Global Poker. 

SGLA Executive Director and former Congressman Jeff Duncan said, “By advancing legislation that was drafted based on a fundamental misunderstanding of our industry and aggressively promoted by stakeholders with a competitive interest in shutting down these platforms, New York residents could lose access to popular, free-to-play online games enjoyed by millions.”

NY Gaming Commission Given Too Much Power

Both the SPGA and SGLA are concerned about the power the bill gives to the New York Gaming Commission. An amendment in the Senate provides the Commission with the authority to decide what businesses constitute a dual-currency system. 

The SPGA statement noted, “Troublingly, the bill leaves the definition of what constitutes an offending game entirely at the discretion of the State Gaming Commission, an unelected body.” 

Duncan of the SGLA similarly stated, “Of particular concern, the discretionary powers handed to the Gaming Commission under this bill could restrict use of a popular marketing tool, hurting businesses and the New York economy in ways lawmakers did not intend.”

Sweepstakes Platforms Already Exiting New York

Even before the legislation had been passed in the Senate and Assembly, many sweepstakes operators announced their withdrawal from the state. 

New York’s Attorney General, Letitia James, also issued cease-and-desist letters to 26 operators, including Chumba Casino, Luckyland, and Global Poker, run by VGW. The operator announced it will exit the Empire State in response. 

James commented that “online sweepstakes casinos are illegal, dangerous, and can seriously ruin people’s finances.”

Whether Gov. Huchal signs the legislation or not, therefore, seems largely irrelevant as the state, like in Louisiana’s case, is already using its authority to target sweepstakes casinos. It may, however, set a precedent and lead other states to take more action against the operators, who have been able to grow rapidly through legal loopholes. 

Montana became the first state to pass legislation banning the platforms last month, and Connecticut has since followed. 

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While it doesn’t specify sweepstakes casinos, the new law prohibits all internet gambling involving any currency:

“The term [internet gambling] includes online casinos, by whatever name known, which constitute internet gambling and therefore are prohibited. This includes but is not limited to any platform, website, or application that knowingly transmits or receives gambling information, allows consumers to place a bet or wager using any form of currency, and makes payouts of any form of currency.”

The phrase “any form of currency” is critical regarding sweepstakes and social casinos. These online gaming platforms don’t use cash directly; they utilize a dual currency system.

One allows users to play for fun, while the other enables them to redeem winnings for cash prizes. Users cannot buy the premium currency directly. Instead, they can receive it through promotions or as a gift with purchases of the fun-to-play currency.

Per SB 555, each violation is a felony punishable by a fine of up to $50,000 and/or 10 years in prison. The bill does allow internet gambling without currency.

Industry Pushback: SPGA Condemns the Montana Sweepstakes Ban

The Social and Promotional Games Association (SPGA), now one of two trade groups representing sweepstakes casinos, immediately criticized the new law.

The SPGA argues the law is overly vague and could criminalize legitimate promotional programs, such as Microsoft Rewards. In a press release, a spokesperson for SPGA called it a dangerous precedent:

“Montana just criminalized everyday digital promotions with a law so broadly written it fails to name what it bans.”

It continued: “It’s a dangerous precedent that could undermine consumer trust, business innovation, and long-standing legal marketing practices.”

SPGA highlighted that lawmakers in other states, such as Arkansas and Florida, have rejected similar proposals. It urged lawmakers nationwide to avoid vague bans and support clear regulations.

Twelve States Have Targeted Sweepstakes Casinos

Montana may be the first to ban the social gaming platforms, but it’s one of 12 states where lawmakers have introduced legislation aimed at sweepstakes casinos:

• Arkansas
• Connecticut
• Florida
• Illinois
• Louisiana
• Maryland
• Mississipi
• Montana
• Nevada
• New Jersey
• New York
• Ohio

Efforts have already failed in several states. Mississippi’s Senate became the first legislative chamber in the US to ban the platforms, but arguments between the Senate and House over sports betting resulted in the bill failing.

Maryland’s Senate also passed a ban on sweepstakes casinos, but the proposal stalled in the House. As SPGA pointed out, bills in Florida and Arkansas also died.

Elsewhere, momentum is building. Last week saw significant movement as Ohio became the latest state to propose a ban. Meanwhile, Connecticut and Louisiana moved closer to joining Montana in making the platforms unlawful.

Both bills have passed the Senate. Connecticut’s bill is already scheduled for a House vote, while Louisiana’s has cleared the committee and awaits a floor consideration.

Meanwhile, companion bills in the New York Senate and House have moved past initial committees and await further action.

The post Montana Becomes the First State to Officially Ban Sweepstakes Casinos appeared first on CasinoBeats.

The group claimed in a statement last week that the amendment of SB 5935 “needlessly threatens” the state’s economy and is nothing more than a “political patch meant to quiet critics without solving the underlying problem.”

Proposed by Sen. Joseph Addabbo, the bill would prohibit any online contest or promotion that “utilizes a dual-currency system of payment allowing the player to exchange the currency for any cash prize, cash award or cash equivalent.”

New Powers for New York Gaming Commission Raise SPGA Fears

Upon the bill’s introduction in March, the SPGA contended that broadly banning sweepstakes games could threaten promotional programs run by major brands such as Marriott, McDonald’s, and Starbucks. The amendment gives the New York State Gaming Commission (NYSGC) the authority to decide what constitutes a “dual-currency system” under the law.

Entities found violating the bill face fines ranging from $10,000 to $100,000 and loss of licensing.

Sweepstakes gaming allows users to play casino-style games without wagering real money. Instead, they use virtual currencies like coins or tokens that can be exchanged for prizes or additional credits.

Because they do not take real-money wagers, these platforms are not classified as traditional gaming sites and have drawn scrutiny from regulators.

The SPGA argues that the amendment is a “clear acknowledgement that this anti-business bill needlessly threatens New York’s economy” and the result of “bad legislation.”

Its companion bill, Assembly Bill 6745, unanimously passed through New York’s Assembly Racing and Wagering Committee last week during a public hearing. Proposed by Committee Chair Carrie Woerner, it defines online sweepstakes games as any contest or promotion that “utilizes a dual-currency system of payment allowing the player to exchange the currency for any cash prize, cash award or cash equivalents.”

National Spotlight on Sweepstakes Regulation

Sweepstakes gaming is under the watch of regulators in several states. Connecticut and Louisiana are seeking similar bans, while a proposal in Maryland failed to advance before the end of the legislative session last month.   

The Louisiana measure would target operators and promoters of casino-style games (slots, video poker, blackjack, roulette), lottery games (keno and poker), sports betting, geolocation providers, and gaming manufacturers.

The SPGA warned Louisiana lawmakers sternly, saying they should “take note before making the same mistake” as their companions in New York.

“This was already bad legislation,” the SPGA said. “Lawmakers have taken a mess and made it into a catastrophe.” 

The post SPGA Slams New York Bill Amendment as ‘Anti-Business’ Legislation appeared first on CasinoBeats.

Republican Senator Adam Bass has introduced Senate Bill 181, which is aimed at banning certain social casino games by classifying them as illegal gambling.

The proposed Louisiana legislation defines illegal sweepstakes gaming as: “any games, contest, or promotion that is available on the internet or accessible on a mobile phone, computer terminal, or similar access device that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents … and simulates any form of gambling.”

This includes casino-style gaming (slot machines, video poker, table games such as blackjack and roulette), lottery games (keno and poker), and sports betting.

It targets not only operators and promoters of these games but also geolocation providers and gaming manufacturers. The bill calls for harsh penalties, ranging from fines between $10,000 and $100,000 to prison sentences of up to five years.

Sweepstakes Gambling Focus in Several States

Close to a dozen states have already filed bills to ban sweepstakes gambling. For instance, New York’s Senate Racing, Gaming, and Wagering Committee unanimously passed SB 5935 last month. The bill, introduced by Sen. Joseph Addabbo, specifically targets games simulating casino-style entertainment, including poker, slots, and sports betting.

“These products evade consumer protection, responsible gaming, and anti-money laundering requirements to which gambling in New York is otherwise subject,” the bill reads. “These products and operations are untaxed and unregulated.

“They present unfair competition to the state’s legal, highly regulated and economically important casinos.”

Following mounting pressure in the Empire State, several sweepstakes operators, including Hello Millions, SportsMillions, PlayFame, SpinBlitz, and Rolling Riches, have announced they will cease business in New York in April. Further, High 5 Casino stopped accepting new registrations and transactions late last month. 

Sen Addabbo has long been a proponent of legalized iGaming in the state, but significant roadblocks remain in the form of the vocal brick-and-mortar casino lobby and public health advocates. He has previously argued that legalizing online casinos would help reduce the risk of residents using unregulated products such as sweepstakes casinos and offshore sites. 

Maryland is weighing similar measures after unanimously passing legislation in the state Senate.

Connecticut, Florida, Mississippi, and New Jersey lawmakers have also filed bills seeking to tighten regulations against sweepstakes gambling.

Opponents Call Proposal ‘Misguided’

SB 181 has drawn fierce opposition from the Social and Promotional Games Association (SPGA), which said that it “recklessly misclassifies” sweepstakes gambling as illegal. 

The SPGA has expressed concerns that SB181’s “overly broad definitions” could criminalize customer engagement strategies from Marriott, United, Delta, and Hilton. It argues that “the vast majority of users never spend a dime” and dubs the Louisiana bill “economically and culturally tone-deaf.” 

The strongly worded statement concludes: “SPGA calls on Lousiana lawmakers to reject SB181 before it inflicts lasting damage on the state’s economy and reputation as a hub for innovation.” 

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