Image by Priya Ravensworth
San Diego’s argument about artificial intelligence has mostly been about jobs. In a Times of San Diego opinion piece on September 7, behavioral scientist Gleb Tsipursky pointed to Stanford Digital Economy Lab figures showing employment in the most AI-exposed occupations running about 19% below expected levels for workers at the start of their careers, and urged the region’s employers to keep the entry-level rungs in place. The other half of that argument arrives by email and social feed: if the software is taking the junior job, let it build you a business instead.
That pitch tends to offer three destinations: a dropshipping storefront, an affiliate publishing site and an online casino. They aren’t three flavors of one weekend project. Follow the paperwork from a San Diego address and they split apart quickly, in close to the reverse of the order the marketing implies.
The first stop is the City Treasurer, not a chatbot
Every version of the plan begins at the same counter. The Office of the City Treasurer says all businesses operating in San Diego must obtain a Business Tax Certificate, and it names home-based businesses, self-employed persons and independent contractors in that rule. The annual fee is $34 for a business with 12 employees or fewer. The Treasurer bills retroactively for up to three years, with a late fee for each year.
Sacramento sets the next floor. An owner who forms a California LLC owes the Franchise Tax Board an $800 annual tax, due by the 15th day of the fourth month after filing, and the board says it stays due every year until the LLC is cancelled, even if it does no business. The first-year exemption for new LLCs covered only tax years beginning in 2021 through 2023.
California regulated the storefront pitch in 1978
California has a law aimed squarely at the people selling done-for-you stores. The Legislature passed the Seller Assisted Marketing Plan Act in 1978 at the urging of the Attorney General’s office. According to the office’s consumer guidance, it covers offers that require a total initial payment above $500 but an initial cash payment under $50,000, where the seller has claimed the buyer will earn more than they paid, that a market exists for the product, or that the seller will buy output back.
A seller covered by the act must file with the Attorney General before advertising or selling in the state. It has to give buyers its disclosure at least 48 hours before they sign or pay. It can’t make earnings statements without data on average earnings, and it can’t take more than 20% of the price in advance of delivering goods and services.
Federal law adds a longer wait. The FTC’s Business Opportunity Rule, 16 CFR Part 437, requires a one-page disclosure at least seven calendar days before the buyer signs or pays. That document must list purchasers from the past three years, or at least the 10 located nearest the buyer, with state and telephone number. A seller who can’t produce both documents has answered the question.
Washington’s case file on AI storefronts
The Federal Trade Commission tested that rule against the AI version of the pitch on September 25, 2024, when it announced Operation AI Comply. Three of its five actions targeted storefront schemes that sold AI as what would make the store work.
Ascend Ecom, run by William Basta and Jeremy Kenneth Leung, was accused of taking at least $25 million from consumers who were promised passive income from stores on marketplaces including Amazon, Walmart, Etsy and TikTok. Ecommerce Empire Builders sold training costing almost $2,000 and done-for-you stores for tens of thousands. The scheme trading as Passive Scaling and then FBA Machine cost consumers more than $15.9 million, the agency said, through earnings claims that rarely, if ever, came true.
All three ended in 2025 with orders banning the operators from selling business opportunities: Ecommerce Empire Builders and Peter Prusinowski in May, Ascend in June, and Bratislav Rozenfeld of FBA Machine in July. Ascend’s owners accepted a $25 million judgment, suspended because they couldn’t pay.
Tariffs raised the price of stock for San Diego sellers
Even an honest storefront still has to buy goods, and those cost more now. In April, Times of San Diego carried CalMatters reporting on how tariffs and conflict abroad have squeezed California small businesses. Nichole MacDonald, who runs the San Diego bag maker Sash Bag, said she had spent tens of thousands of dollars on tariffs, moved manufacturing from China to India and cut her staff from 11 people to three after 2025 sales fell by up to half.
No prompt removes that line: duty, freight and stock come before the first sale.
An affiliate site’s inventory is other people’s fine print
The second option skips the warehouse. An affiliate publisher holds no stock and ships nothing. What it makes is a page that reads the terms businesses publish for their own promotions and sets them side by side. It’s the one job on this list where AI plausibly speeds up the core work, and also where it’s most likely to go wrong, because the value sits in details a model can misread.
Sweepstakes casino promotions show how much of that work is conditions rather than headline numbers. A sign-up offer is usually stated in two coin balances, only one of which carries prize value. Attached to it are a playthrough multiple, a minimum balance before a redemption request can be submitted, and an expiry window on unused coins. PlayUSA’s coverage of https://www.playusa.com/sweepstakes-casinos/no-deposit/ is built that way, recording the terms next to the sign-up amounts they belong to, which is the whole product an affiliate publisher sells.
That niche also shows why a local publisher has to read statutes as closely as offer terms. California’s AB 831, signed by Governor Gavin Newsom on October 11, 2025, made it a misdemeanor to operate or offer an online sweepstakes game in the state, and it names media affiliates among those barred from knowingly and willfully supporting or promoting such games within California. A San Diego site in that category would be writing for readers in other states, where treatment varies and is still contested in several, and it would want a lawyer’s read before its first page. Start-up cost for the site itself runs to a domain name, hosting and reading time.
The affiliate’s license is a disclosure
A publisher paid by the businesses it covers is an endorser with a material connection under the FTC’s Endorsement Guides, revised at 88 FR 48102 on July 26, 2023 and codified at 16 CFR Part 255. Where that connection could affect how much weight a reader gives the recommendation, and the audience wouldn’t expect it, it has to be disclosed clearly and conspicuously. On the internet, the Guides say, the disclosure should be unavoidable.
The Guides carry no penalties of their own. A separate 2024 rule on reviews and testimonials, published at 89 FR 68077 on August 22, 2024 and codified at 16 CFR Part 465, defines clear and conspicuous the same way for the review disclosures it requires, and it carries civil penalties: a disclosure fails if a consumer must click a hyperlink or hover over an icon to see it.
There’s no application and no fee, but the disclosure standard applies from the first published page. To see how a publisher in the category presents itself day to day, scroll PlayUSA on X, where the account has posted under its own name since December 2016 and its profile states a 21-plus audience alongside a problem gambling helpline.
The casino option is the one San Diegans already drive past
San Diego County residents know what a casino operator looks like, because the best-known ones sit along its backcountry roads: Viejas, Sycuan, Barona, Pala and Harrah’s Resort Southern California on the Rincon reservation. Each is run by, or on behalf of, a tribal government offering class III games under a compact with the state, a structure that grew out of the federal Indian Gaming Regulatory Act of 1988.
That local picture is the template for the online side, too. In Michigan, which like New Jersey and Pennsylvania has a settled regulated online casino market, the Lawful Internet Gaming Act of 2019 lets the Michigan Gaming Control Board issue an internet gaming operator license only to a holder of a Michigan casino license or to an Indian tribe lawfully running class III gaming in the state.
A qualifying applicant pays a $50,000 application fee and $100,000 on issue for a five-year license, then $50,000 a year. It must prove its suitability by clear and convincing evidence, and it pays tax on a sliding scale from 20% to 28% of adjusted gross receipts. The online casino is an extension of a land-based license, the kind held by the tribes a San Diegan passes on the way to the mountains.
Side by side
| Model | Capital before launch | San Diego and California paperwork | Federal layer | Realistic time to launch |
| Dropship storefront | Inventory, duty and freight | $34 city certificate; $800 a year as an LLC; any package seller must have filed under SAMP | Package seller owes a Part 437 disclosure seven days before payment | Weeks, once stock is in place |
| Affiliate publisher | A domain name and hosting | $34 city certificate; $800 a year as an LLC | Clear, conspicuous disclosure under the Endorsement Guides | Days, from the first published page |
| Online casino operator | $50,000 application and $100,000 on issue in Michigan | Not a path open from a San Diego home office | State license tied to an existing casino or tribal license | Not open to a new entrant on its own terms |
The honest answer for a San Diego starter
The affiliate route comes closest to easy. It has the lowest capital floor, and disclosure can be met on day one, though a San Diego publisher has to pick its niche with state law in view, and sweepstakes promotion is off the table inside California. The storefront route can work, but its costs are real goods, and the packages sold to shortcut it are the part both Sacramento and Washington have spent decades policing. Before paying anyone, ask for the SAMP registration and the Part 437 disclosure. The casino route isn’t a startup at all.
AI writes listings and answers customer messages faster than a person can, but it doesn’t move any of the lines above.
