Local Players Face New Reality as State Cracks Down on Sweepstakes Machines

Published in cooperation between Cryptonews and the Morgan Hill Times

California is undergoing major changes in the gambling landscape, and local Morgan Hill residents are in the direct line of fire. More specifically, a nationwide crackdown on casino-style sweepstakes machines and sites is in motion. For the longest time, these platforms and devices have been operating in a legal gray area, which has drawn the attention of the state’s federally recognized Native American tribes. As they hold exclusive rights to casino gaming, these tribes consider this to be illegal competition that is taking away from their revenue. 

This change is being proposed through Assembly Bill 831 (AB 831). Although this might act as a significant catalyst for Native American tribes, it creates a dilemma for locals who rely on the convenience of these options. Simultaneously, it brings up another point of contention. Locals who heavily rely on these terminals for a casual, accessible form of entertainment might be driven toward unregulated options, as there is a lack of alternatives. In turn, since this bill will impose stricter oversight, many players are going to seek out ways to access broader gaming options that provide the same benefits. For Morgan Hill residents specifically, this can mean needing to travel to distant, regulated physical casinos for simple gameplay.

There is a solution, however, that guarantees consumers are still making use of regulated sites. Ensuring it is common knowledge that a Virtual Private Network (or VPN) can be used to gamble online could potentially stop the bill from backfiring on citizens. For example, there is an array of VPN friendly casinos that offer the same convenience and accessibility as sweepstakes but fall outside of sites impacted by the bill. This is because VPNs mask players’ real IP addresses, guarantee anonymity and privacy and enable access to geo-restricted games. From a business standpoint, the federal and native reasoning makes sense, but there seems to be a lack of concern for player safety.  

Delving deeper into the reason behind tribal support might provide further insight. For one, it has been argued that the presence of these sweepstakes options directly impacts the tribes’ exclusive rights to casino gaming in California. Simply put, these machines pose an existential threat to their current business holdings. The end goal is to have these machines removed from the entire state and completely banned from online spaces. Avelino Valencia, an assembly member, is leading the charge, backed by the California Nations Indian Gaming Association (CNIGA) and tribal nations.

When looking at the legislation, it defines sweepstakes machines or platforms as any game or contest that mimics slots and offers real money rewards. This includes fantasy sports platforms, which showcase the intensified nature of this campaign. While it is understandable that the tribes would like to maintain economic stability for their communities, this legal precedent does not seem to benefit residents in any way. Although these platforms resemble gambling (or create the illusion thereof), it is not as cut-and-dry as the legislation implies. Overall, it seems the ban will only be of advantage to Native American tribes, who have a long history of fighting for this exclusive right. 

Getting closer to home, the local Morgan Hill community will experience the ripple effects of this ban. Beyond players needing to seek alternative means of gaming (and potentially putting themselves at risk), local small businesses also lose a source of revenue. These sweepstake machines have been hosted in many neighborhood markets and convenience stores by owners for extra income. Of course, there has been much discourse from netizens and from the general public on whether these factors were taken into account when drawing up the bill. Did lawmakers find evidence that the presence of these machines was negatively impacting residents?

Alternatively, was this just seen as an unregulated form of entertainment rather than devices that proved problematic? Some locals have argued that similar efforts could be made for other, more pressing matters, such as rising costs or job market expansion. Many feel efforts are being wasted to fix a non-existent issue while simultaneously taking away the public’s freedom to choose where to game. Beyond this, sweepstake operators are also being pushed out of California, which means the state loses out on a high-volume revenue stream. In fact, the financial loss is not the only consequence, as a high number of workers will be left unemployed. 

Already, there is much tension between iGaming and tribal gaming operators, and this is only going to add to the tension. While tribal casinos fall under strict state-mandated consumer protection rules, a building resentment is forming as more operators are pushed out of state. This is to the extent that, despite native casinos having great responsible gaming oversight and age verification, customers choose not to make use of these venues. From an objective standpoint, banning all gambling operations that are not tribally owned can be good for business. However, when considering the impact it has on residents and local businesses, it might not be great for revenue.

In conclusion, this potential ban is being closely followed by many, from locals to sweepstakes operators. Despite being a victory for the integrity of tribal gaming, this is just adding to the ever-growing demand for convenient gaming.