The Social Gaming Leadership Alliance (SGLA) has expressed “disappointment” over California Governor Gavin Newsom signing Assembly Bill 831 into law, banning online social games with sweepstakes promotions in the state.
SGLA Hoped Gov. Gavin Newsom Would Veto AB 831
The California Senate passed AB 831 on Sept. 8 with a vote of 36-0, then the State Assembly unanimously passed it with a vote of 63-0 on Sept 12. The measure would have become law on Oct. 12 with or without Gov. Newsom’s signature.
A veto by Gov. Newsom was Californians’ only hope.
“Voters, players who love online social games, California tribes, and online social games operators all made their position clear: they didn’t want a ban on this popular, safe form of entertainment,” said Jeff Duncan, Executive Director of SGLA.
“We hoped that Governor Newsom would see past the anti-competitive efforts of the powerful, well-funded tribes behind this bill and veto AB 831, but he chose the easy, short-sighted path and turned his back on choice, innovation and economic gains.”
Since the introduction of AB 831 in June, the SGLA, along with many California tribal nations and other groups, have criticized the flawed “gut-and-amend” bill.
Tribes such as Kletsel Dehe Wintun Nation, the Sherwood Valley Rancheria of Pomo Indians, the Mechoopda Indian Tribe of Chico Rancheria, and Big Lagoon Rancheria have opposed AB 831 because it would limit economic opportunities available to tribes lacking the resources of wealthier gaming tribes.
California Voters Overwhelmingly Opposed Anti-Sweepstakes Bill
In addition, research from Eilers & Krejcik revealed that AB 831 would immediately eliminate $1 billion in annual economic impact to California from online social games with sweepstakes, and “California would miss out on at least $200-$300 million annually from potential regulation and taxation of the industry,” per the SGLA.
What’s more, a nationwide poll with an oversample of California voters revealed that residents overwhelmingly opposed banning online social games with sweepstakes components.
Approximately 85% of California voters agreed that the state should modernize and update laws to regulate and tax online social gaming. More than 20,000 Californians wrote over 34,000 emails and made nearly 6,500 calls directly to legislators and to Gov. Newsom opposing AB 831.
However, Gov. Newsom opted to sign the bill into law over the weekend.
The law goes into effect on Jan. 1, banning all sweepstakes casino platforms, including any “financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate.”
Violators would be guilty of a misdemeanor, punishable by a fine of up to $25,000 or up to a year in county jail, or both. By creating new crimes, the bill is also expected to impose a state-mandated local program.
The SGLA added in its news release that it will “continue to promote sensible regulatory frameworks that respect voter preferences, support economies, protect consumers and allow residents the right to choose their digital entertainment options.”