Tribal Gaming and OSB Operators Oppose Sweepstakes Casinos

A new front in California’s gambling landscape is opening as tribal gaming entities and online sports betting (OSB) operators align in opposition to sweepstakes casinos. Following failed efforts to legalize sports betting, the Sports Betting Alliance (SBA) and tribal gaming leaders are now confronting the rise of sweepstakes gaming, which they view as a threat to the state’s regulated gambling market. Both sides emphasize the importance of regulatory oversight to protect the integrity of gambling in California, and their collaboration could reshape the state’s gaming industry. Stay tuned as tribal and OSB stakeholders push for greater regulation and explore strategies to counter the growing presence of sweepstakes casinos.

California Tribes and Online Sports Betting Operators Oppose Sweepstakes Casinos

In an unprecedented collaboration, tribal gaming entities and US online sports betting (OSB) operators have joined forces to combat the rise of sweepstakes casinos in California. This alliance marks a significant development, as both parties have historically been at odds, particularly during the contentious 2022 sports betting ballot proposals. However, the threat posed by sweepstakes gaming has united these former adversaries in a shared cause—protecting the state’s regulated gambling environment.

The Sports Betting Alliance (SBA), representing major OSB brands such as FanDuel, DraftKings, BetMGM, and Fanatics, has taken a lead role in the fight against sweepstakes casinos. During a recent webinar titled “Common Ground: Will California Tribes and Sports Betting Alliance Join Forces Against Sweepstakes Threats?”, SBA spokesperson Jeremy Kudon emphasized the need for greater regulatory scrutiny. Kudon likened the current sweepstakes model to the internet cafes of the early 2010s, which were ultimately ruled illegal.

Key Points:

1. Unregulated Sweepstakes Gaming Poses a Major Threat
   Kudon pointed out that sweepstakes casinos operate with minimal regulation, allowing them to bypass the stringent requirements imposed on licensed operators. This not only undermines the legitimacy of regulated gambling but also opens the door to consumer harm.
2. Efforts to Legalize Sports Betting Require Significant Investment
   Kudon highlighted that the OSB operators have spent years and significant resources lobbying for sports betting legislation across the U.S. He stated, “It should be hard” to pass such laws, as proper regulation ensures all stakeholders, including the government, benefit from a well-regulated market.
3. California as a Battleground for Sweepstakes Operators
   Some experts predict that California could become a key battleground for sweepstakes casinos. The state’s massive market is too lucrative for operators to exit without a fight, despite legal challenges. Gaming attorney Daniel Wallach has noted that California’s laws, which ban gambling-themed sweepstakes, could make sweepstakes casinos particularly vulnerable.

The Legal Landscape in California

California’s regulatory framework is currently in flux. While tribal casinos dominate the state’s land-based gambling market, sports betting remains unregulated following the failure of 2022 ballot initiatives. In this environment, sweepstakes casinos have gained a foothold by operating in a legal grey area. However, legal experts like Wallach argue that the state’s constitutionally enshrined public policy against casino gambling and broad-reaching gambling statutes could lead to sweeping legal action against sweepstakes operators.

The Social and Promotional Gaming Association (SPGA), a trade body for sweepstakes operators, has expressed openness to increased regulation, much like the battles seen during the rise of daily fantasy sports (DFS) in the mid-2010s. The SPGA believes that regulatory clarity could bring legitimacy to their business model while addressing concerns raised by both tribes and OSB operators.

The growing alliance between tribal gaming interests and online sports betting operators signals a major shift in California’s gambling landscape. Both groups are pushing for increased regulation of sweepstakes casinos, hoping to protect the state’s gambling market from unregulated competition. With California potentially becoming a key battleground for sweepstakes gaming, this partnership could significantly influence the future of gambling legislation in the state. The collaborative effort is a sign that even former adversaries can find common ground when the stakes are high.