California Tribal Gaming Leaders Critical of Sweepstakes, DFS Presence in State

• Several California tribal gaming leaders spoke out today on the presence of DFS and sweepstakes companies in the state
• James Siva, chairman of the California Nations Indian Gaming Association, said all gaming exclusivity begins and ends with state tribes
• Victor Rocha, conference chairman of the Indian Gaming Association, described the games as unregulated and untaxed in California

California tribal gaming leaders are turning their attention to daily fantasy sports and sweepstakes games in the state, criticizing the operators for their presence and defying tribal gaming exclusivity.

Victor Rocha, conference chairman of the Indian Gaming Association, and Jason Giles, executive director of the Indian Gaming Association, co-hosts of The New Normal podcast, welcomed James Siva, chairman of the California Nations Indian Gaming Association, to the show to discuss the increasing pressure from daily fantasy sports (DFS) and sweepstakes companies to operate in the state.

“When we’re talking about cannibalization, this is what we’re talking about. They’re taking money out of California. It’s unregulated and it’s untaxed,” Rocha said.

Rubbing Up Against Tribal Exclusivity?

The discussion, the first of five scheduled shows on the topic, centered mainly around the presence of sweepstakes, DFS, and DFS 2.0 in California. Both are operating in a gray area in the state, Rocha said, and pay no money into the system.

California Attorney General Rob Bonta has been reviewing the legality of DFS in California since last year. Sen. Scott Wilk (R-21) requested Bonta review the operations of DFS companies in California to see if their services are in line with state gambling laws.

Bonta has yet to release his opinion on DFS, but Siva said there is no question as to whether the services are legal in the state.

“The fact is, according to the California constitution, DFS is illegal in every way,” he said.

DFS and sweepstakes games have been on the radar of the California Nations Indian Gaming Association (CNIGA) for the last year, Siva said, with the association questioning their legality. Companies are also offering these games in California in defiance of tribal gaming sovereignty, he said.

Gaming outsiders coming into the state understand tribal gaming exclusivity, but choose to simply ignore it, Siva said.

“That’s why they’re trying to find their way around it, flat out ignore it, and I’m sure they’d like it to go away. They know what they’re doing, they just don’t care. They don’t respect it. They don’t respect sovereignty,” he said.

CNIGA has sent letters to the Attorney General’s office to inform them of their stance of sweepstakes being illegal. Siva also noted that CNIGA will be sending letters to Google and Apple to inform them that they’re allowing customers to download the illegal sweepstakes apps in their app stores.

Rocha noted that the games may legally be allowed into the state in the future, but if they do they must be regulated and work with California tribes to enter. If tribes are not ready to get involved in their type of gaming, they’ll have to wait on the sidelines until they are. Both sweepstakes and DFS 2.0 representatives have reached out to certain tribes to see how they could partner with them, but neither have any tribal partnerships and still offer their games in California, he said.

“They’re not doing anything with tribal partnerships, which is a violation of tribal exclusivity, and that’s where they’ll get in trouble.”

Are Sweepstakes Legal?

A number of states within the last year have issued cease-and-desist notices to sweepstakes companies operating within their borders. The Michigan Gaming Control Board requested VGW exit the state in January 2024, which the company agreed to do. The company also agreed to pull its games from Connecticut after being issued a notice to cease operations by the Connecticut Department of Consumer Protection earlier this month.

VGW has yet to leave Delaware after being issued a cease-and-desist order from the Delaware Division of Gaming Enforcement in February 2023.

Companies offering sweepstakes game argue that their services are legal as they provide customers with a free-to-play element for their games. Customers can play traditional casino games for a chance to win cash prizes with no-purchase required, but can also purchase additional opportunities to play the games.

Recently, 10 sweepstakes companies joined together to create the Social and Promotional Gaming Association, a group dedicated to represent the interests and increase education of sweepstakes games across the country.

“The Social and Promotional Games Association and its members are committed to protecting players, promoting responsible innovation, and advocating for clear regulations that allow the industry to flourish. By uniting platforms under a single banner, we present a unified voice for integrity and responsibility in social and promotional gaming, working to secure a bright future for both the industry and its players,” according to the group’s mission statement on its website.

Despite the operators’ belief that sweepstakes is a legal form of gaming, Siva said he remains unconvinced. Even with their legality in question, companies looking to offer any type of gaming in California must first go through the state tribes.

“Tribes are the operators in California. Any new entry of gaming into California begins and ends with the tribes. That’s it. That’s the reality of gaming in California. You may not like it, but you will respect it the end of the day,” he said.