REAL MONEY GAMING
to swat away all the arguments typically made by DFS operators. At its core, the Attorney General declared all real-money DFS to be violative of Penal Code section 337(a) because “they involve betting on sports.” 10 In doing so, the Attorney General is attempting to foreclose those who oppose the opinion from levying arguments that: (i) DFS contests are games-of-skill which inherently are not betting; or (ii) DFS contests utilize “entry fees” as opposed to bets and therefore cannot be considered betting under 337(a). On the former, the Attorney General concluded that 337(a) prohibits the placing of bets or wagers “upon the determination of an uncertain or unascertained event in a particular way…[that] may involve skill or judgment,” and therefore, any argument that skill predominates chance in DFS is irrelevant to a determination as to whether 337(a) has been violated. 11 As to the latter, the Attorney General claims that the operators conflate “bets or wagers,” which are prohibited, with “entry fees. ” This, per the AG, is because “players promise to give money based on the determination of an uncertain or unascertained event (the sports competition) in a particular way (the relative aggregate performance of each player’s selected team of athletes).” 12 While the Attorney General has made clear he plans to enforce the law as he interprets it with regard to DFS, all the major operators continue to offer DFS in the state. As mentioned above, the Underdog lawsuit continues, and this is certainly a saga that will extend into 2026. 13 The California Legislature Takes Action Against Sweepstakes Casinos AB 831 has two main sections, the culminative affect of which is an attempt to clearly prohibit what are colloquially known as “sweepstakes casinos.” To its detractors, these internet products are the modern evolution of internet sweepstakes cafes and outlaw casinos, and to those in support, these products are a bright and legal spin on classic sweepstakes 10 Ca. Atty. Gen. Op. 23-1001 at 7.
games such as the McDonald’s Monopoly game, 14 and which, for the majority of users, never evolve beyond a free-to-play social game. Of course, if these games were purely social with no real money aspect, they would not be at the center of a legal and political maelstrom. Instead, these games allow users to enter “sweepstakes” style contests in which users risk a virtual currency for chances to win real money prizes while playing casino-style games (e.g., Blackjack, Craps, Roulette, Slots and sports wagering). As mentioned above, AB 831 has two main components. The first component further clarifies the strictures of what constitutes a legal sweepstake and provides for associated disclosures under the California Unfair Competitions Law (“UCL”). 15 The amended UCL attempts to draw lines in the sand that would make the operation of most sweepstakes casinos effectively illegal. The second component much more explicitly makes these activities illegal by adding a new section to the California Penal Code prohibiting any “entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate to knowingly support directly or indirectly the operation, conduct, or promotion of an online sweepstakes game within this state.” The bill goes on to propose the following definition of “online sweepstakes game”: A game, contest, or promotion that meets all of the following conditions: A. Available on the internet or accessible on a mobile phone, computer terminal, or similar device. B. Utilizes a dual-currency system of payment that allows a person to play or participate with direct consideration or indirect consideration, and for which the person playing or participating may become eligible for a prize, award, cash, or cash equivalents or a chance to win a prize, award, cash, or cash equivalents.
C. Simulates casino-style gambling, including, but not
11 Id . at 8 (internal quotations and citations omitted). 12 Id . at 15 (internal quotations and citations omitted). 13 As if this matter were not acrimonious enough, the Governor voiced his disagreement with the Attorney General’s opinion within days of publi- cation. 14 RIP in the United States. 15 CA Bus. & Prof. Code § 17200
PAGE 44
IMGL MAGAZINE | SEPTEMBER 2025
Made with FlippingBook flipbook maker