Following multiple hits last week, the sweepstakes casino industry finished the week with another major blow: California prohibition legislation.
California lawmakers have introduced a bill to prohibit sweepstakes casino operators from the most populated state in the US. The powerful California Nations Indian Gaming Association is backing the legislation. The California constitution limits gambling to tribal nations.
The bill capped a big week of anti-sweepstakes action, including passage of a ban by the New York legislature, as well as more than 50 cease-and-desist letters from Mississippi and Louisiana gambling regulators.
Multiple parties reported the bill, including Indian Gaming Association Chair Victor Rocha and Howard Glaser, global head of government affairs and legislative counsel at Light & Wonder. The legislation is not yet publicly available.
Cali sweepstakes casino legislation
California’s new legislation digs deep into the industry and makes it unlawful for any party to facilitate, process or promote sweepstakes-style gambling. According to Glaser, the legislation will be similar to that of New York’s and will address:
- Financial institutions
- Gaming suppliers
- Geolocation services
- Media affiliates
- Payment processors
- Platform providers
The bill also potentially targets celebrities involved in the operators. Drake, Paris Hilton and Ryan Seacrest have endorsed operators.
California push long time coming
Rocha has long been vocal about the tribes’ stance on sweepstakes.
Last year, the tribes and the Sports Betting Alliance united in calling for action against sweepstakes in California despite their own fraught relationship.
Bad week for sweeps
California lawmakers introduced the bill Friday. That came after the New York legislature unanimously passed a sweepstakes prohibition in both the Senate and the Assembly.
New York is the fifth state to pass such a ban, joining:
- Connecticut
- Louisiana
- Montana
- Nevada
Louisiana Gov. Jeff Landry vetoed his state’s bill, saying Bayou State regulators had enough power to enforce regulations. The Louisiana Gaming Control Board later sent out 40 cease-and-desist letters to illegal operators, including offshore and sweepstakes casinos and sportsbooks.
The Mississippi Gaming Commission also issued multiple cease-and-desist letters last week. Since 2023, at least 16 states have issued cease-and-desist letters to sweepstakes operators.
Sweepstakes casino twist
The Social and Promotional Games Association, which represents a variety of sweepstakes operators, has been vocal during the regulatory and legislative crackdown on the industry.
“As Gov. Hochul weighs S5935, we want to flag serious concerns about its potential overreach,” an SPGA statement read following the NY legislative action. “If signed into law, it would mark the first time a U.S. state has exposed entrepreneurs, software vendors, and even venture capital investors to criminal liability for funding or building free-to-play digital entertainment and rewards platforms.”
With the California legislation filed, the SPGA noted that the San Manuel Band of Mission Indian‘s Yaamava Resort & Casino operates an online social casino, though the website offers free casino play as prizes and not cash prizes.
