AB 831 Passes California Senate, Threatening the Sweepstakes Sector

California’s divisive AB 831 has cleared the Senate, despite opposition from the tribal and sweepstakes gaming sectors. While the bill has a few more steps to pass in order to be signed into law, its opponents are already feeling the pressure.

AB 831 Inches Closer to Passing

AB 831 seeks to snuff out California’s controversial social gaming sector, also known as sweepstakes. Sweepstakes are a form of gaming that leverages a dual-currency system in order to provide options to either play for free or put money on the line. Since players can play and win prizes without staking any actual money, sweepstakes operators claim that their products do not classify as gambling per the existing rules.

However, the growth of the sweeps sector has prompted severe backlash against such products, with many states ordering the biggest players in the social casino market to cease and desist. At the same time, lawmakers have tried to introduce laws that ban such products, although such measures have had mixed success so far.

AB 831, in particular, passed the Senate and is now set to return to the California Assembly for additional amendments and deliberation. If the measure passes the Assembly Governmental Committee and the subsequent full floor vote, it could become law, effectively ending California’s sweepstakes industry overnight.

The measure envisions penalties not only for operators but for content and tech suppliers, payment providers, and marketers that support the sweepstakes sector. Some providers have therefore exited the California sweeps sector.

Sweeps Operators Under Fire

AB 831 has been firmly opposed by industry stakeholders, including multiple tribes that have accused the bill of catering to the needs of casino giants. The likes of the Sherwood Valley Band of Pomo Indians, Mechoopda Indian Tribe of Chico Rancheria, Big Lagoon Rancheria, and the Kletsel Economic Development Authority have said that the bill would hurt smaller tribes disproportionately.

However, the opposition has failed to gain sufficient traction. At the same time, sweepstakes operators have been facing pressure in Los Angeles, where a city attorney initiated a lawsuit against Stake.us, the sweeps arm of the famous crypto casino Stake.com.

Los Angeles’s complaint seeks to force Stake.us to shut down. In addition to that, the city hopes to force the sweepstakes operator to refund all player losses. The complaint has also incriminated Evolution, Pragmatic Play, and Hacksaw Gaming as suppliers supporting the allegedly illegal offer.