by Ryan Sabalow
In summary
After winning a costly legislative fight last year against rival card rooms, California’s tribes got lawmakers to ban a type of online sweepstakes.
Click Here to Subscribe to the California Political Review
While you’re here: On Nov. 4, Californians will decide whether the state should gerrymander its congressional districts. Sign up for key updates on the special election.
For the second straight year, casino-owning tribes persuaded lawmakers to pass legislation that directly attacks the tribes’ business competitors.
Earlier this month, the California Legislature approved Assembly Bill 831, which bans companies from offering certain types of online sweepstakes that the tribes see as a threat to their exclusive rights to gambling in California.
In an example of how much political clout the tribes have — thanks in part to the millions of dollars they have donated to legislators’ reelection campaigns — the measure easily passed both legislative chambers without any of California’s 120 lawmakers voting against it.
In total, the groups for and against the bill have spent at least $1.7 million on lobbying the Legislature so far this year, according to filings with the California secretary of state.
Gov. Gavin Newsom hasn’t indicated whether he’ll sign Anaheim Democratic Assemblymember Avelino Valencia’s bill. It follows a bill Newsom signed into law last year that allowed tribes to sue their rivals, privately owned gambling halls called card rooms, to try to stop them from offering table games such as blackjack.
The tribes immediately sued card rooms after they won one of the most expensive political fights of the last two-year legislative session. The feuding gambling factions each spent millions on lobbying and on lawmakers’ campaigns.
The tribes’ case against card rooms is pending.
How the sweepstakes games work
This year’s measure attacks companies offering a style of gaming that’s exclusively online — and already offered in California.
Players typically download an app to play a game of chance such as slots or cards.
Each day, they are given a limited number of free virtual gold coins to play. When the players run out of free coins, they can purchase more from the company to keep playing.
Even with a virtual coin purchase, there’s no cash payout for winning one of the games of chance.
But to lure in customers — and keep the ones they have playing — the companies also give out tokens called “sweepstakes coins” that can be used to participate in sweepstakes that are separate from the card or slot games.
Sweepstakes coins are provided to players as a “bonus” with the purchase of gold coins, through promotions or as complimentary rewards. Those coins are potentially redeemable for real-world prizes or cash, unlike the game-play coins, according to the bill’s analysis.
At least one of the gaming companies has offered a $1 million sweepstakes payout.
The companies argue that because the game-play coins have no cash value and sweepstake coins are not available for direct purchase, their business model isn’t gambling and their sweepstakes aren’t illegal lotteries since there’s no monetary risk for a player.
The virtual sweepstakes games are exploding in popularity. The so-called “sweepstakes casino” companies raised an estimated $3.1 billion in 2022, and was projected to surpass $8 billion by the end of last year, according to the bill analysis.
The bottom line is that the “Injunz” agreed not to buy and incorporate as non-profit / non-taxable properties in exchange for gambling on their Rez.
They immediately broke that promise.
There is no moral reason not to allow non-natives to own and operate casinos throughout the State.
LET THE COMPETITION BEGIN.
Let the Rez that broke their promise have to live in the real world.