Sweepstakes Casinos in the Firing Line in California

Sweepstakes casinos are under increasing fire in California as tribal gaming representatives and major online betting operators discuss a potential alliance to limit their spread. The outcome could greatly impact the sweepstakes casino operators' finances.

Webinar discussions and key participants:

• Victor Rocha, chair of the Indian Gaming Association, hosted the webinar “Common Ground: Will California Tribes and Sports Betting Alliance Join Forces Against Sweepstakes Threats?”

• Jeremy Kudon, spokesperson for the Sports Betting Alliance (SBA), represented major players including FanDuel, DraftKings, BetMGM, and Fanatics.

• The conversation highlighted regulatory concerns and parallels between sweepstakes casinos and earlier unlawful internet cafes.

Regulatory and legal context:

• California’s 2022 election cycle saw failed sports betting initiatives, leaving tribal gaming with significant influence over future legislation.

• Kudon emphasized the need for stringent regulatory oversight to safeguard industry standards and stakeholder interests.

• Legal experts, including Daniel Wallach, warned sweepstakes casinos face potential vulnerabilities under California’s “gambling-themed” sweepstakes ban and existing case law.

Industry implications and future considerations:

• Cease-and-desist orders have prompted some operators, like VGW, to exit certain markets without legal contest.

• Tribes view sweepstakes casinos as a threat to their economic sovereignty, while commercial operators see them as competitive risks.

• Collaboration between tribal leaders and commercial operators could shape a more regulated and transparent gaming environment in California.

The future of sweepstakes casinos in California remains uncertain, but growing alignment between tribal and commercial gaming interests may signal tighter regulation and oversight for the industry.