The bill’s smooth passage — not a single one of California’s 120 lawmakers voted against it — underscores the tribes’ political muscle in Sacramento, built in part on millions of dollars in campaign and ballot-measure contributions that have helped secure lawmakers’ loyalty.<\/p>\n

Native American tribes run the major casinos in the state. The tribes are among the most influential and biggest spending lobbies in Sacramento.<\/p>\n

Since 2014, California’s candidates for state office have received about $23.5 million from tribes. That’s more than double what oil companies have given the state’s politicians during the same years. Tribes also hold enormous political and economic power in the state through their inherent sovereignty, which grants them self-governing authority and direct, government-to-government ties with both the state and federal government.<\/p>\n

Gov. Gavin Newsom<\/a> (D-CA) has not yet signed the latest legislation introduced by Assemblymember Avelino Valencia<\/a>. He has until Oct. 12 to sign or veto it.<\/p>\n

If Newsom signs the bill, it would create new criminal penalties for companies offering online sweepstakes and “any entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider or media affiliate” that supports a sweepstakes casino, according to the text. Violators would face up to $25,000 in fines and a year in jail.<\/p>\n

Valencia’s proposal builds on a law signed last year by Newsom that gave tribes new legal firepower — the ability to sue their competitors, privately owned card rooms, in an effort to block them from offering table games such as blackjack, baccarat, craps, and roulette. The tribes immediately sued card rooms once Newsom signed off on the measure. The case against card rooms is ongoing.<\/p>\n

This year’s bill targets companies offering gaming that is exclusively online, specifically sweepstakes.<\/p>\n

Here is how sweepstakes work: Players are required to download an app to play a game such as slots. They are given a limited number of free virtual gold coins to play daily. When they run out, they have the option to buy more and keep playing. There is no cash payout for winning slots or other games of chance promoted on the websites. However, companies will give out tokens called “sweepstakes coins” as a “bonus” with the purchase of gold coins, through promotions, or as complimentary rewards. The sweepstake coins can be used to enter large prize drawings that include cash and other prizes. One sweepstake is offering $1 million in cash.<\/p>\n

The companies argue that because the gold coins cannot be bought and have no cash value, it is unfair to categorize sweepstakes as gambling. They also claim that they are not illegal lotteries because there is no monetary risk for the player.<\/p>\n

The tribes strongly disagree and claim that card rooms are a dangerous form of unregulated gambling that needs to be shut down immediately. They also believe that the virtual companies are cutting into the rights California voters awarded tribes in 1998 and 2000.<\/p>\n

“Unregulated online sweepstakes threaten this voter-approved system by imitating casino gaming without oversight, accountability, or community investment,” Isaiah Vivanco, chairman of the Soboba Band of Luiseño Indians, told a Senate committee over the summer. “These illegal platforms erase all benefits of regulated gaming while exposing consumers to serious risk.”<\/p>\n

He also claimed that if the sweepstake casinos are allowed to continue to operate, it will “destabilize” the legal gaming industry and cause unprecedented economic harm to Native Americans.<\/p>\n

But not all tribes support the measure. <\/p>\n

The Kletsel Economic Development Authority, the economic development arm of the California tribe Kletsel Dehe Wintun Nation, says AB 831 disproportionately benefits larger, more established tribal casinos at the expense of tribes without access to tourism corridors. <\/p>\n

The authority argues that new revenue streams such as online social games can fund essential services including healthcare<\/a>, food security, and social programs for smaller tribes that do not have income from large casinos at their disposal.<\/p>\n

THERE ARE NO PROMISES GAVIN NEWSOM WON’T BREAK<\/strong><\/a><\/p>\n

“For tribes like ours, geography has always limited traditional economic development,” Kletsel Economic Development Authority CEO Eric Wright said <\/a>in a statement. “It is self-serving for large, well-established gaming tribes to advocate for policies that restrict emerging digital commerce opportunities for others, effectively holding smaller and less-advantaged tribes hostage to their location.<\/p>\n

“Eliminating lawful, regulated digital opportunities will deepen existing disparities, reduce self-sufficiency, and undermine California’s commitment to economic justice for all tribes.”<\/p>\n<\/div>\n