Major online sports betting companies and California’s casino tribes have teamed up to combat unregulated sweepstakes platforms, a common rival. Among the websites accused of stealing billions of dollars in potential profits from legal gambling are Fliff and High 5 Casino. According to industry estimates, by 2025, these platforms might bring in $4 billion.
This partnership is a unique example of tribal organizations and businesses like DraftKings, FanDuel, BetMGM, and Fanatics working together. Both parties now concur that regulation is urgently needed, despite previous disagreements, such as the unsuccessful 2022 campaigns for Propositions 26 and 27.
A Growing Threat to Regulated Gambling
Sweepstakes platforms operate under the pretense of social gaming. Players often start for free but can later purchase virtual coins to wager, redeeming winnings for real money. This loophole allows the platforms to bypass state regulations and taxes.
“These sweepstakes sites are taking billions of dollars in revenue,” said Jeremy Kudon, president of the Sports Betting Alliance. “That’s money that could be going to the states and tribes.” Tribal leaders and licensed operators are pressing state attorneys general to clamp down on these platforms.
Victor Rocha, a leader in California’s tribal gaming sector, hosted Kudon on a webcast that highlighted this newfound unity. Reflecting on past divisions, Rocha said, “After California 26 and 27, I think many thought the East and West would never meet.” However, the current focus on sweepstakes sites has forged a shared goal.
FanDuel has recently hired tribal leaders to strengthen its partnerships. In April, CEO Amy Howe acknowledged past mistakes, calling the 2022 ballot campaign “a spectacular failure.” She pledged to collaborate with tribes in any future California efforts.
The alliance also aims to address pick’em-style fantasy sports games, which some call “DFS 2.0” and view as thinly veiled sports betting. Rocha emphasized the importance of addressing these issues now, stating, “This is a crossroads for the industry.”
Looking ahead, the alliance hopes state regulators will act quickly to limit unregulated platforms. Kudon affirmed the industry’s commitment, saying, “When you’re ready, we’ll be there to support you in any way.”
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