Hearing testimony reveals lack of consensus from California tribes; SGLA unveils new economic analysis showing more than $1 billion impact to California economy and possibility to unlock hundreds of millions more in new state revenue
WASHINGTON, DC – Following today’s Senate Appropriations Committee hearing, the Social Gaming Leadership Alliance (SGLA) urges committee members to reject California Assembly Bill 831 (AB831), a bill that proposes a sweeping ban on online social games that use sweepstakes. The SGLA today released new economic modeling showing that the games currently generate more than $1 billion annually in direct and indirect benefit to California. The analysis suggests that implementing a modern regulatory framework could deliver an additional $200-300 million in yearly tax revenue to the state government, while strengthening consumer protections.
If enacted, AB831 would:
- Immediately eliminate $1 billion in annual economic impact to California
- Deprive the state of a promising new revenue stream worth hundreds of millions of dollars annually
- Deny millions of Californians access to the safe, free-to-play games they enjoy
According to the Senate Appropriations Committee analysis of AB831, passage of the bill would not only take current and potential new revenue out of the California economy, but it is also anticipated to incur “potentially significant” costs to the California Department of Justice, the state funded trial court system and to counties to enforce and adjudicate, should it become law.
At the hearing, Eric Wright, Chief Executive Officer of Kletsel Economic Development Authority, provided testimony in opposition to AB831, saying, “This bill lacks unanimous support among California tribes, has advanced without meaningful consultation with many of us, and threatens our inherent right to create legitimate revenue streams to support our people.” Other testimony in opposition to the bill included Virtual Gaming Worlds (VGW) and ARB Interactive.
“California has a choice: ban a thriving industry or regulate online social games to safeguard players, protect $1 billion annually in current economic benefits and unlock hundreds of millions in new revenue for the state each year,” said Jeff Duncan, Executive Director of SGLA and former Congressman. “California lawmakers now have the opportunity to harness the economic power of a growing and innovative industry while creating a regulatory framework to ensure strong consumer protections.”
Key findings from the analysis, conducted by respected industry research firm Eilers & Krejcik on behalf of SGLA, include:
- $1 billion in current annual economic contribution to California
- $732M in California-based marketing spend with platforms like Meta and Google
- $36M in California-based payment processing fees to companies like Visa and PayNearMe
- $34M in cloud hosting fees to California data center operations by providers like Amazon Web Services, Microsoft Azure, and others
- $208M in household earnings through California-based jobs at companies that work with the industry
- $200–$300 million+ in potential new state revenue each year
- $15-25M from operator fees
- $175M from a 7.25% tax on player purchases
- Additional revenue from advertising, brand partnerships and expanded market access
The SGLA continues to advocate for a regulatory framework that ensures robust age verification, mandates robust data, financial, and fraud protections, codifies transparent operations and provides players with built-in responsible gameplay tools such as spending limits and self-exclusion options.
The modeling was developed using E&K’s proprietary 50-state sweepstakes market model, which combines national revenue estimates with California-specific market indicators, including population, income, broadband access, and operator presence. Conservative assumptions and California-specific economic multipliers were applied to estimate direct, indirect, and induced effects.
To learn more about SGLA, please visit our website at www.SGLeadership.org and our social channels at LinkedIn, X, Facebook and BlueSky.
Contact
Laurie Rossbach
Partner, Seven Letter
202.258.7810
Laurie@SevenLetter.com
About the Social Gaming Leadership Alliance
The SGLA’s operator partners are VGW, PLAYSTUDIOS, Yellow Social Interactive, ARB Interactive and B-Two Operations, representing Chumba Casino, Luckyland Slots, Global Poker, Pulsz, Pulsz Bingo, Modo Casino, McLuck, HelloMillions and SpinBlitz. Other partners include major payments provider Nuvei. The SGLA’s advocacy and standards focus exclusively on online social games. Our advocacy does not extend to operators offering sports products or transacting in cryptocurrency.
The Social Gaming Leadership Alliance (SGLA) champions social gaming operators who offer innovative, free-to-play entertainment experiences enjoyed by millions of Americans while promoting responsible digital entertainment. Our partners set the standard for innovation, world class games and the responsible use of digital marketing including sweepstakes promotions. We advocate for appropriate oversight that recognizes the unique entertainment value of social online games, protects players, platforms and the community, and promotes responsible gameplay.
