Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News,...
Read Full BioCalifornia has become the latest state to target sweepstakes casinos with new legislation introduced last week.
Howard Glaser, Global Head of Government Affairs at Light & Wonder, reported the news on LinkedIn, posting:
“A bill introduced today with the backing of the California Nations Indian Gaming Association follows similar lines as the New York legislation passed unanimously this week, making it unlawful to facilitate or promote the operation of illegal online sweepstakes casinos by any “person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate”.”
The bill has not yet become public, and various reports suggest that language targeting sweepstakes casinos will be included in an amendment to bill AB831, which proposes changes to tribal gaming compacts.
Bill Could Target Drake And Other Sweeps Promoters
Glaser went on to add: “The language of the bill suggests that California celebrities pushing sweeps casinos – such as Drake, Paris Hilton and Ryan Seacrest- would be subject to liability for their roles in illegal casino advertising and promotion.”
Drake has a multi-million dollar deal to promote Stake, one of the leading sweepstakes casinos. The company is already facing a lawsuit in California over claims its sweeps model is in violation of California gambling laws.
Additionally, Ryan Seacrest has a deal with VGW-operated Chumba Casino, but is also facing legal action for his social media promotions of the platform.
Sports betting and gaming lawyer Daniel Wallach posted on X that: “California already has a statutory ban on land-based sweepstakes gambling businesses.
“This bill would extend the reach of that statute to online sweepstakes casinos, although those businesses are likely already illegal under well-settled CA case law.”
In the Stake case, however, a judge granted the company’s motion to send the matter to arbitration.
Judge James Selna did not make a ruling on Stake’s legal status, requiring the dispute to be resolved through private arbitration with the American Arbitration Association (AAA).
Explicit legislation targeting the sweepstakes model could have a significant impact on the platform’s future in California.
Stake currently operates through Stake.us because it does not hold iGaming licenses in legalized jurisdictions.
California Joins States Fighting Against Sweepstakes
Other states have also proposed legislation to tackle sweepstakes casinos, as well as utilizing the powers already available to target these platforms.
New York is awaiting the governor’s approval on a bill that will explicitly ban sweepstakes’ dual-currency models.
Sweepstakes lobby groups have urged Gov. Kathy Huchal to veto the bill.
In the meantime, Attorney General Letitia James issued cease-and-desist letters to 26 sweepstakes operators. The majority of platforms have already exited the state.
Montana and Connecticut are the only states to have passed legislation that explicitly bans these platforms.
In contrast, Louisiana passed a bill in both the House and the Senate unanimously; however, the legislation was vetoed by Governor Jeff Landry.
Landry cited the bill as unnecessary, as the state already has enough power to target unlicensed gambling operators, which include sweepstakes casinos.
Louisiana’s Gaming Control Board issued cease-and-desist letters to 40 gambling operators following Landry’s veto.
Tribes Urging Action Against Sweepstakes Casinos
Reports suggest tribal leaders are pushing for the legislation in California.
Victor Rocha, the Conference Chair of the Indian Gaming Association (IGA), previously commented on sweepstakes casinos: “They’re unregulated. They’re untaxed. This is gambling on training wheels. It’s a bunch of lawyers who are spitting in our face and looking at gray areas thinking that we’re not going to act.”
The chairman also pointed out that “these guys don’t pay money into the system. When we’re talking about cannibalization, this is what we’re talking about. It’s companies like this that take money out of California.”
The legislation is in its early stages, and more details are expected to emerge in the near future about the exact terminology used in the bill.
However, if New York passes its legislation and California also introduces a similar ban on sweepstakes, it could have a significant impact on the industry.
Glaser concluded his LinkedIn post by stating: “California’s action – and certainly if, as expected, either Texas or Florida follow suit- would spell the end of viable sweepstakes casino operations in the US.”
