Chilling
Tribes accused of ‘backroom deal’ over California sweeps ban move
The so-called ‘gut and amend’ sweepstakes move is controversial.
In +More: reports suggest the NJ governor has settled on a tax increase to 20%.
PAC it in: DraftKings launches a corporate political action committee.
UK AGCs under fire after BBC self-exclusion exposé.
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Maneuvering
Sweeping changes: The Californian tribes have backed what their opponents suggest is a controversial last-minute maneuver to push an anti-sweepstakes measure through the state legislature that would criminalize not only operators but games producers and providers, as well as affiliates.
Details of the bill are scant but it has been reported it would make it unlawful for any “person, entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider or media affiliate” to facilitate or promote sweepstakes gaming.
Reports also noted that the broad language of the bill would appear to target celebrity influencers such as Drake and Paris Hilton.
Hypocritical: The measure is being pushed by the California Nations Indian Gaming Association and in particular the San Manuel Band of Mission Indians.
Notably, sources pointed out – and have the screenshots to prove it – that the San Manual uses sweepstakes as a means of promoting its B&M casino.
Sleight of hand: A ‘gut and amend’ maneuver is where a bill is substantially changed, often by replacing its original content with entirely new provisions.
This can be a controversial practice, particularly if it bypasses normal legislative processes or lacks transparency.
Unsound: “This isn’t how sound policy gets made,” said a spokesperson for the Social and Promotional Games Association. “A last-minute effort to outlaw legal digital games, without public debate, expert input or economic analysis, sends a chilling message to entrepreneurs, innovators and investors across the state.”
California voters “didn’t sign on for backroom deals dictated by powerful political interests,” the spokesperson added.
“With the state facing wildfires, a housing crisis and a full federal assault on Californians’ rights, it’s astounding that any lawmaker would make banning mobile games a priority.”
Amped up: Prominent tribal voices have held nothing back in their backing for a move in the California legislature to ban sweepstakes operations that would widen the net further than any other state, and would put investors, games suppliers and affiliates, among others, in the crosshairs.
Blood curdling: Victor Rocha, a prominent tribal critic of sweepstakes operations and chair of the Indian Gaming Association, appeared to revel in the news of the initiative.
“Just a reminder that the California tribes are undefeated in protecting their gaming exclusivity,” he posted on X.
“We will keep curb-stomping the sweeps until we see the white meat. No mercy. No quarter.”
Is this why they’re so upset? Again on X, Rocha hinted the tribes’ efforts against sweepstakes would also appear to be a response to an as yet unpublicized effort by fantasy sports operators to push for legislation that would allow them to operate and pay tax.
“My sources tell me the AG is about to drop its long-rumored opinion on DFS2. I’m also hearing they’re shopping legislation,” he posted.
On a roll: The news from California topped off a momentous week for the anti-sweepstakes gaming movement, following the passage of anti-sweepstakes legislation in New York and the sending of multiple cease-and-desist letters in Louisiana and Mississiippi.
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+More
New Jersey tax hike
Splitting the difference: According to NJ.com, Governor Phil Murphy and the legislative leader have struck a budget deal that includes a rise in taxes on both OSB and iCasino to 20%.
This compares with the original proposal of 25% advanced by the governor and the current rate of 13% for OSB and 15% for iCasino.
Truist said the increase was “manageable” given the news from Illinois where a new 50% top rate will come into force in July, suggesting that mitigation will be possible through “promo reductions alone.”
No surcharge: “We don’t see the need for any mitigation strategies beyond promos,” the analysts added.
Based on LTM figures, the analysts estimated the increase would have meant an annualized rise in costs of ~$67m for Flutter and ~$56m for rival DraftKings.
PredictIt has settled its lawsuit with the US Commodity Futures Trading Commission and will continue operating under the regulator’s supervision, after the agency revoked its 2014 no-action letter authorising election markets.
Louisiana: Governor Jeff Landry has signed HB 639, raising the state’s mobile sports-betting tax from 15% to 21.5%, effective August 1.
New Jersey: A bill banning prop bets on college athletes has cleared the state Senate Government, Wagering, Tourism & Historic Preservation Committee. SB 3080 now advances to the full Senate, with New Jersey poised to join Ohio, Maryland, Louisiana and Vermont in outlawing such wagers.
Hong Kong: A government bill to legalize basketball betting through the Hong Kong Jockey Club at a 50% tax rate will receive its first reading on July 2, with a second reading expected the same day. A separate proposal aims to more than double international simulcast horse races by 2026-27, generating an estimated $231.85m in new tax revenue.
A top German AML watchdog said digital assets accounted for a record share of the suspicious activity reports it received last year from banks and financial-services companies. This included crypto-based gambling transactions. The Central Office for Financial Transaction Investigations, or FIU, found the number of notifications related to crypto rose 8.2% to 8,711. It said the reports – the majority of which are related to Bitcoin – are connected to transactions on trading platforms, mixing services or gambling.
The Canadian province of Alberta will open up its online market to competition early next year, according to Dale Nally, the minister in charge of the process. He told attendees at the Canadian Gaming Summit last week that the provincial government aims to finalize decisions on advertising rules and tax rates this fall.
What we’re reading
Lies, damned lies: Separately from the debate over sweepstakes, Victor Rocha has also been making waves in the prediction markets debate. Speaking to Sportico, he suggested the recent conflab between the tribes and Kalshi CEO Tarek Mansour hadn’t gone too well. “I’ve talked to Tarek Mansour twice now, and my take from him is that he’s a lying little twerp,” Rocha told the site.
DraftKings PAC
PAC to the future: DraftKings has launched a corporate political action committee (PAC), as it ramps up political activity amid growing scrutiny of the sports-betting sector.
Registered on June 9 with the Federal Election Commission, DraftKings PAC is a “separate segregated fund” that can only collect contributions from company insiders.
PACs support political candidates and policy issues important to a company’s interests, operating independently of corporate accounts.
DraftKings said its PAC would prioritise tax, licensing and regulatory issues affecting online gambling and sports betting.
The initiative will be led by federal affairs chief Lauren Pfingstag Vahey and deputy general counsel Griffin Finan, based out of Fairfax, Virginia.
All that noise: The launch follows a series of legal and legislative setbacks for DraftKings, as it attempts to defend its turf in a tightening policy and competitive environment.
Illinois recently imposed a per-transaction tax on sports bets, rising to 50 cents, which DraftKings said could push players toward illegal markets.
The company and rival FanDuel were previously targeted for antitrust scrutiny after their failed 2016 merger attempt.
In 2022, both firms spent $70m on a failed California ballot push to legalise sports betting.
Sweepstake-style casino models and new state-level tax proposals are now seen as major threats to DraftKings’ growth, the company said.
The emergence of prediction markets makers such as Kalshi and their intent to offer sports futures is also viewed as a direct challenge to DraftKings and FanDuel.
Crowded house: DraftKings is the latest gambling operator attempting to steer debate in DC and beyond through a PAC, with PrizePicks, MGM, Caesars and the American Gaming Association also forming committees.
Analysts said even modest PAC funding can “open doors” as lawmakers assess industry risks tied to addiction and oversight.
DraftKings spent $463,702 on political donations in 2024, split across party lines, and gave $420,000 to federal lobbying efforts last year.
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AGCs under fire
Mind the gape: A BBC investigation claimed there were “gaping holes” in the regulation of adult gaming centers, known as AGCs, with poor staff training and little by way of adherence to the rules on self-exclusion.
Taking to the streets of Portsmouth, Hampshire, the BBC found that 13 out of 14 AGCs within the city allowed an undercover reporter to play despite having a prior self-exclusion registration.
Blame game: The Gambling Commission said in a statement that the finding of the documentary was “very concerning,” adding it was taking “urgent steps to investigate what has happened.”
The Commission also suggested the local authorities should take their share of the blame for any systemic failures.
“Local authorities licence premises in their local areas and are funded, through the licence fee they charge, to inspect gambling businesses in their area to ensure those businesses are compliant,” said the statement.
However, a spokesperson for the local government association told the BBC that because of council cuts enforcement was “falling backwards.”
“It’s a sad state when we actually can’t do the many things we need to do to keep people safe.”
The spokesperson said there was presumption of approval in favor of gaming premises and that councils were in a “real cleft stick” because they cannot use high concentrations of gambling establishments as a reason for refusing a license.
Unsafe from harm: In February, leading AGC operator Merkur Slots was fined £95,450 for social responsibility failings at one of its AGCs in Stockport, near Manchester. Investigations revealed the operator failed to interact with a customer when they gambled for extended periods, losing nearly £2,000.
Andrew Rhodes, Commission CEO, said at the time that this was a “clearcut case of an operator failing to follow rules aimed at keeping consumers safe from harm.”
In the wake of the revelations, Merkur Slots told the BBC it “works within the confines” of the self-exclusion scheme and “always follows best endeavors” to assist customers who have self-excluded.
Trade association BACTA said AGCs were “among the safest places to gamble,” with customers supervised by staff who are trained to spot problems.
Calendar
Jun 26: Gaming in Spain, Madrid
Jul 1: Technology in Gaming, London
Jul 14-16: OIGA, Oklahoma City
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