California targets online casino sweepstakes with new bill

Under AB 831, California might become the latest state to ban online casino games from holding sweepstakes.

Sweepstakes have been launched by online social casinos that let users buy gold coins to join a drawing for cash and prizes. Nonetheless, the state’s casino owners contend that this is only a workaround for internet gambling.

The Yuhaaviatam of the San Manuel Nation, which runs the Yaamava Resort and Casino, is a major backer of the plan to outlaw online sweepstakes.

The bill would prohibit online sweepstakes that offer cash prizes and a dual currency system, so the casino’s Play Online by Yaamava online casino would remain safe.

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At a senate committee hearing, Johnny Hernandez, the vice chairman of the Yuhaaviatam of San Manuel Nation, stated that AB 831 aims to clearly define the boundaries between regulated and unregulated gaming and ensure that California remains on the correct side of that line.

Proponents contend that because social casinos function as a grey market with little regulations, they are vulnerable to illegal conduct, including underage gaming.

The social casino sector, however, has opposed the law, claiming that rules are already in place through standards for payment processors and guidelines for running contests.

AB 831 is opposed by Bill Gantz, a representative of the Social Gaming Leadership Alliance and co-lead of the gaming practice at the law firm Duane Morris LLP. He said the law unjustly singles out a certain industry area that has been operating in California for over ten years and is anticompetitive.

“[AB 831] penalizes those who have innovated and created a market for this kind of entertainment, while it benefits those who have not used sweepstakes to market their product,” Gantz stated.

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