California Anti-Sweeps Bill Passes Second Senate Committee

California bill AB 831, which would ban online sweepstakes casinos, passed out of the Senate’s Public Safety Committee by a 6-0 vote Tuesday.

It was the second Senate committee that Assemblyman Avelino Valencia’s bill cleared in as many weeks, having been unanimously voted out of the Governmental Organization Committee on July 9. Because Valencia’s bill is a “gut and amend” of a previous one, AB 831 would need to navigate the entire Assembly chamber should it be passed by the Senate.

It now heads to the Appropriations Committee, whose next scheduled meeting is Aug. 18. It is expected there will be further amendments to Valencia’s bill after talks with multiple card room stakeholders.

Valencia takes new tack in testimony

Johnny Hernandez of the Yuhaaviatam of San Manuel Nation again appeared with Valencia as a primary proponent of the bill, but this time he was joined by Jason Anderson, the district attorney for the County of San Bernardino.

Anderson focused his testimony on the bill addressing the underage gambling safeguards many opponents of sweeps claim are lacking. As a prosecutor with more than a decade’s experience as deputy district attorney for San Bernardino in its “crimes against children” unit, Anderson noted, “Teens and underage adults have a difficult time going into a casino unnoticed, but they have very easy access to a variety of the betting and gambling options online.”

Anderson added the amendments Valencia made to AB 831, which include a narrowing of the focus in the bill of those liable. It is “only intended to penalize the companies … which are the source of this illegal gambling who are operating these dual currency model games illegally in the state.”

He added: “Assemblymember Valencia has presented the legislature with an opportune bill at an appropriate time, and I strongly urge the committee to support to move this bill through the process so that California can take a step forward in joining other states in protecting our children.”

In a statement released by the Social Gaming Leadership Alliance (SGLA), Executive Director and former U.S. Congressman Jeff Duncan took issue with those amendments.

“We heard the bill author admit substantial amendments are needed to prevent unintended consequences but has failed to produce them,” he said. “Lawmakers are being asked to vote on legislation that even its author acknowledges is incomplete and inadequate. We urge California lawmakers to listen to the thousands of constituents that have contacted their offices and work with the industry to keep this established form of entertainment legal and properly regulated.”

Opposition also brings in new face

Bill Gantz again was first to speak in opposition to the bill, once more on behalf of the SGLA. He was joined by David Jumper, chief marketing officer of ARB Interactive. Jumper proved to be a notable upgrade in terms of testimony compared to World Poker Tour President and CEO Adam Pliska last week.

Jumper, whose company operates Modo Casino and recently purchased Publisher’s Clearing House, hit back at claims of his casino operating a dual currency system, telling the committee Modo provides “ongoing access to free gold coins and maintains robust alternate method of entry, ensuring no purchase is ever required.”

He added Modo does utilize many of the responsible gambling safeguards that have been an ongoing debate both in California and nationwide when it comes to sweeps, including age verification, spending limits, identity checks, and self-exclusion tools.

Jumper also told the committee directly that sweeps “are not gambling,” but rather “promotions governed by established consumer protection laws, not gaming laws.” He echoed Gantz’s calls for a regulatory framework that would lead to potential tax revenue and called for AB 831 to be put on a two-year timeline to allow “stakeholders to develop a thoughtful regulatory framework.”

Making their voices heard

Similar to the Government Organization committee hearing, both proponents and opponents of the bill made themselves heard once testimony was given by both sides. Multiple tribes presented themselves in favor of AB 831, and Greg Campbell did likewise for the second time in as many weeks on behalf of the Sports Betting Alliance.

Representatives of the SLGA, Social & Promotional Gaming Association (SPGA), and operator VGW all again entered the record as opponents. They were joined by George Parampathu of ACLU California Action, who voiced opposition specifically to the bill’s “broad misdemeanor provisions.”

Online sweepstakes casino legislation has been a hot-button issue in statehouses across the United States this year. Both sides can claim varying degrees of success.

Bills banning sweeps have passed in Nevada, Montana, and Connecticut, and are a governor’s signature from doing so in New York and New Jersey.

The SPGA and SLGA were successful in helping prevent legislation in Maryland and Florida from reaching full chamber floors. While Louisiana Gov. Jeff Landry vetoed an anti-sweeps bill in June, the state’s attorney general did release an opinion this month saying online sweeps were illegal.