There was never any chance that this week’s episode of The New Normal podcast, hosted by Indian Gaming Association (IGA) Conference Chair Victor Rocha and Executive Director Jason Giles, was going to be about anything other than California’s new anti-sweepstakes bill.
Rocha and Giles welcomed California Nations Indian Gaming Association (CNIGA) Chair James Siva and Michael Hoenig, VP and associate general counsel for the Yuhaaviatam of San Manuel Nation, to discuss Assembly Bill 831, the overhauled bill backed by CNIGA and San Manuel that would explicitly outlaw sweepstakes.
Since it was filed, the bill has attracted attention for many things, including its scope. As well as operators of casino-style and sports betting-style sweeps, it also targets payment processors, geolocation services, platform providers, gaming content suppliers and affiliate marketers of such companies.
That was intentional, Siva said, and influenced by similar wording that has appeared in other states’ legislation this year.
“In California, we needed to go after this entire group, top to bottom,” Siva noted. “Otherwise, we’re just chasing after one individual company or app, they shut that down and start up another one. It’s just the newest grifter with a new costume on.”
If it quacks like a casino…
Hoenig noted that the inherent argument from sweepstakes casinos that their offerings are not gambling is hooked on the notion that playing with dual currency is not gambling since the games are capable of being played for free.
He was dismissive, though, arguing that you may buy gold coins to play more games. When you do, he said, you get sweepstakes coins that can be wagered or cashed out.
“It’s nonsense. Frankly, it’s just a way to muddy the waters a little bit in that middle part so that you can basically make online bets … This is pretty clearly just a way to run online gambling. It looks like, it plays like, it is, basically, a casino.”
Rocha put it differently.
“You don’t see a lot of resistance. When a cease-and-desist comes, they run. I think they’re very aware, as we are, that what they’re doing is illegal … They scramble like cockroaches. When the lights turn on, they go behind the fridge, and we will pull the fridge out with a flamethrower.”
Different strokes for different folks
The podcast also addressed a note Social and Promotional Games Association (SPGA) disseminated a note on Tuesday pointing out the San Manuel Nation owns and operates Yaamava’ Resort and Casino which in turn runs an online social casino called PlayOnline, where offerings with “sweepstakes” in the title are available.
Hoenig argued it is not the same kind of product.
“Yaamava truly is free to play. At no point is there this dual currency switch where you’re getting another kind of coin that you can play with. It’s basically all these free gold coins that have no value. You can’t cash them out. You can’t get anything for them.”
What about the sweepstakes promotion the casino offered?
“Nobody had to buy anything. You log in twice in a day, and you get entered into a contest to win a prize. That was basically it. There was none of this buy this coin, get this coin that you can then go gamble with and cash out for money. There’s no gambling happening.”
PlayOnline also allows members of Yamaava’s player loyalty program, Club Serrano, to earn points based on their social casino gameplay. These points, like most casino loyalty programs, can be exchanged for things of real-world value.
The SPGA have stated numerous times in response to legislation that anti-sweeps bills risk criminalizing retail promotions like those run by McDonald’s and Starbucks sweeps, where customers can amass rewards. Hoenig called those claims “overblown and disingenuous.”
Let’s spend the fight together
History indicates that it is difficult to get all of California’s tribes on the same page, but the group noted this case was different.
“Surprisingly, this one was very easy, I think because of the timing when this bill came up,” Siva said, pointing to a myriad of challenges in the state including continued scrutiny on sports betting and now the sports event contracts issue that rages nationwide. “This bill came at the perfect time where tribes are engaged in conversations, ready to do what we have to do to protect our exclusivity and our sovereignty.
“And if you can get the California tribes together, you’re in trouble.”
“FanDuel and DraftKings and the tribes and the industry are all on the same side and everybody wants the same thing, which is the complete and total annihilation of this industry,” Rocha added.
Does that mean this bill might move quickly? We’ll have to wait and see, but Siva suggested he believes it coudl get done this very session, which ends Sept. 12. The crossover deadline was June 6, but that’s not an issue here as the amended bill in question has alreadypassed from Assembly to Senate.
California, rest in peace?
Even if it doesn’t pass, Hoenig noted that the tribal exclusivity over gaming under the Indian Gaming Regulatory Act (IGRA) means that sweepstakes platforms may violate the Wire Act or the Unlawful Internet Gambling Enforcement Act (UIGEA).
But if it does pass, the panelists agreed that after several body blows from legislation in the likes of New York, Connecticut, Nevada and Montana, a California ban could be the headshot.
“California is the good land of milk and honey for them,” Rocha opined. “Once you chase them out of California, that’ll be the end of the industry.”
