California’s attempt to ban sweepstakes casinos took a bit of a twist on Monday.
VGW Holdings, which owns Global Poker and other sweepstakes casino platforms, inked a partnership with the Kletsel Dehe Wintun Nation (KEDA) of the Cortina Rancheria tribe.
The tribe, located in southwestern Colusa County, partnered with VGW to operate free-to-play online social games. This includes sweepstakes promotions.
The tribe doesn’t already operate a brick-and-mortar casino. Thus, tribal leaders see the agreement as a means to increase funding for economic needs.
“We are delighted to enter into this partnership with KEDA and look forward to working together to ensure economic opportunities well into the future,” VGW founder and CEO Laurence Escalante said. “We’ve operated in North America for more than a decade, creating not only great games, user experiences and entertainment, but ensuring this is done safely, responsibly and at the highest level of standards- in line with our core values of ‘We do what’s right.'”
Disagreement Over Legislation
The deal comes as Golden State legislators consider a ban on sweepstakes operators in the state. California’s AB 831 would prohibit sweeps operators and suppliers from the state. Additionally, it bans celebrities from endorsing the platforms.
The agreement throws a wrench into a potential ban. The tribe is critical of AB 831 and its potential effects on tribal groups in the state.
“This bill lacks unanimous support among California tribes, has advanced without meaningful consultation with many of us, and threatens our inherent right to create legitimate revenue streams to support our people,” said KEDA CEO Eric Wright in a letter to the California Senate Appropriations Committee.
Tribes are a major stakeholder in the California gambling landscape. During the recent attempts at California sports betting legalization, the tribes were not happy with the proposals. Consequently, they singlehandedly torpedoed the efforts.
In the Golden State, tribes have exclusivity over casino gaming. As a result, the state’s politicians typically take their opinions on the subject very seriously.
“For tribes like ours – far from high-traffic tourism corridors – geography has always limited traditional economic development. Large, well-established gaming tribes already benefit from these geographic advantages and decades of success. It is self-serving for them to advocate for policies that restrict emerging digital commerce opportunities for others, effectively holding smaller and less-advantaged tribes’ hostage to their location.”
Furthermore, Wright said eliminating these digital opportunities will deepen these disparities, reduce self-sufficiency, and undermine the state’s commitment to economic justice for all tribes.
Social Gaming Lobby Chimes In
The Social Gaming Leadership Alliance said the bill would eliminate $1 billion in annual economic impact to California. It would deprive the state of a new revenue stream worth hundreds of millions of dollars annually.
“California has a choice: ban a thriving industry or regulate online social games to safeguard players, protect $1 billion annually in current economic benefits and unlock hundreds of millions in new revenue for the state each year,” said SGLA executive director and former congressman Jeff Duncan. “California lawmakers now have the opportunity to harness the economic power of a grwoing and innovative industry while creating a regulatory framework to ensure strong consumer protections.”
In addition to the social gaming groups, the ACLU opposed the legislation as well. They argued the bill’s language would penalize citizens using the platforms.
On the other hand, critics argue these platforms skirt traditional gambling laws. They are nothing more than illegal gambling sites. Several state legislatures began discussing a ban on these platforms.
Most recently, New Jersey Gov. Phil Murphy signed a ban into law last week.
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