The Social and Promotional Games Association (SPGA) submitted a formal letter to California Assemblymember Avelino Valencia, urging the lawmaker to reject his AB 831. The measure would outlaw online sweepstakes casinos and sweepstakes promotions by companies like Marriott, Microsoft, and Starbucks.
SPGA Describes AB 831 As Too Vague, Too Rushed, Too Risky
In the letter, the SPGA describes AB 831 as “too vague, too rushed, and too risky,” and believes “the Legislature should take a more thoughtful and transparent approach and make this a 2-year bill.” The bill puts all types of promotions, rewards apps, and marketing campaigns at legal risk.
AB 831 would ultimately make it a crime to “support directly or indirectly” a sweepstakes game. This could potentially include “software vendors, payment processors, advertisers, media platforms, and paid endorsers.” Increased penalties include up to a $25,000 fine and a year in jail.
The bill is “a sweeping threat to lawful expression and commercial affiliation,” the letter reads. “Disrupting an entire legal industry in less than two months without adequate debate, education, public outreach, and evidence supporting the proponent’s arguments seems extremely short-sighted and irresponsible.”
Bill Fails To Define Key Words
The SPGA went on to state that AB 831 would criminalize anyone who operates or supports a “sweepstakes game,” but “the bill fails to clearly define the terms it uses.”
In addition, the measure refers to a “dual currency system” without explaining the meaning. “Cash equivalents” are also mentioned but left undefined. The definitions of “direct” and “indirect” consideration are “so broad and circular that nearly anything of value could qualify, even tokens or rewards given away for free.”
The SPGA asserts that the sites of sweepstakes casinos and social casinos are “widely used, free to play, and protected by age gates, geolocation tools, and fraud safeguards.”
“Most users on these platforms play for free and never make a purchase. Those that do make purchases typically do so in nominal amounts on average. They are used by brands to power loyalty programs, promotions, and digital engagement. These are legal tools, not illicit schemes,” the Association wrote.
AB 831 Would Restrict Economic Activity In California
AB 831 would impact California’s economy as well. The bill could make the Golden State “less open, less creative, less bold,” and the SPGA seeks “a state regulatory framework that can generate needed revenue for the state.”
“We respectfully urge you to vote no on this last-minute gut and amend effort and make it a 2-year bill. Do not create new crimes without clear evidence,” the letter reads.
“Do not restrict economic activity and innovation through last-minute legislative language. And do not let the demands of a few define the future of California’s digital economy.”