The California bill tackling online sweepstakes gambling has been amended for the second time in the Senate since it was completely overhauled to become a sweeps ban.
AB 831, which was gutted and amended in late spring after passing the Assembly in unrecognizable form, was awaiting a vote on the Senate floor after passing its final committee vote on Aug. 29. But on Wednesday, Sept. 3, the bill was amended at third reading and sent back to second reading.
‘Limited and occasional’ marketing promotions are fine
The tweaked version makes several changes. Most prominently, it seemingly seeks to refute the suggestion from sweeps and social gaming operators and associations that the legislation would criminalize the kind of promotions and sweepstakes offered by retailers such as Starbucks and McDonald’s. That has been a repeated argument against proposed sweep bans not only in California by several other states this year.
“The bill would specify that these provisions do not make unlawful game promotions or sweepstakes conducted by for-profit commercial entities on a limited and occasional basis as an advertising and marketing tool that are incidental to substantial bona fide sales of consumer products or services and that are not intended to provide a vehicle for the establishment of ongoing gambling or gaming,” reads an addition to the bill’s text.
It also specifies that AB 831 is not attempting to restrict the California State Lottery’s operations, nor lawful games and methods used by a gambling entity licensed under the Gambling Control Act. Other amendments include replacing the terminology “gambling-themed games” with “gambling.”
The changes were as the Social and Promotional Games Association (SPGA), an association of social gaming and sweepstakes operators, posted on social media to warn that even the Make-A-Wish Foundation’s new promotion offering up to one million Chase Ultimate Rewards points could be banned under the bill.
Knowledge and intent is a factor
Another change adds a whole new Section 1 which clearly states the bill would only apply to people or entities who “knowingly and intentionally” engage in, promote or facilitate online sweepstakes games that utilize a dual-currency system, not to ancillary service providers that may be unknowingly or unintentionally used in connection with online sweeps.
Lower down, in another section, the bill clarifies that while entities like gaming suppliers, platform providers, banks, payment processors, geolocation providers and media affiliates would still be criminalized for directly or indirectly supporting sweeps, that would only be the case if they did so “knowingly and willfully.” The italicized words are a new addition in the latest amendment.
AB 831 was previously amended at the committee stage in the Senate in mid-July to add the word “knowingly” to the above provision, as well as to remove the potential threat of individual players being criminalized for using sweepstakes gaming platforms by scratching the word “person” from the list of parties who would be found in violation of the law for taking part in a sweepstakes scheme.
Cities join some tribes in opposition
AB 831 is strongly backed by the Yuhaaviatam of San Manuel Nation, other major gaming tribes, and the California Nations Indian Gaming Association (CNIGA). However, some limited opposition has emerged in the last couple of weeks.
Three smaller tribes, including social gaming and sweeps giant VGW’s new tribal partner, the Kletsel Dehe Wintun Nation of the Cortina Rancheria, have spoken out in opposition to the bill, as has longtime sweepstakes contest operator Publishers Clearing House (PCH), which is now owned by a social gaming company.
The California Cities Gaming Authority, a cardroom advocacy group, and multiple cities that host cardrooms have also opposed the bill, according to documentation filed in late August for its pending Senate vote, before the latest amendment. Back in early July, a cardroom representative spoke up in the bill’s initial Senate committee hearing to express concern and suggest that he had expected cardrooms to be catered to in the legislation.
