California Moves to Outlaw Sweepstakes Casinos with New Legislation

Key Moments:

  • California Governor Gavin Newsom has signed Assembly Bill 831 (AB 831), banning sweepstakes gambling starting January 1, 2026
  • The new law gained unanimous support in both legislative chambers, with 36-0 in the Senate and 63-0 in the Assembly
  • Sweepstakes operators, payment processors, geolocation providers, and other related businesses will face misdemeanor charges for violations, including fines up to $25,000 or a year in county jail

Comprehensive Ban on Sweepstakes Casinos

Governor Gavin Newsom has enacted Assembly Bill 831 (AB 831), effectively prohibiting sweepstakes casinos throughout California beginning January 1, 2026. This legislative action positions California as the largest state to enforce such a ban against “dual-currency” casino-style sweepstakes, considered by many as a rapidly expanding sector operating outside regulatory oversight.

Under this new statute, not only are sweepstakes gambling operators held accountable, but a wide array of associated businesses – including payment processors, financial institutions, geolocation services, platform providers, and media partners – also face legal repercussions. Penalties for breaches include a misdemeanor charge, fines up to $25,000, jail time of up to one year in county jail, or both.

Bipartisan Backing and Legislative Path

Spearheaded by Assemblymember Avelino Valencia, AB 831 received strong bipartisan backing as it advanced through California’s legislature. The Senate gave its approval with a 36–0 vote on September 8, while the State Assembly followed with a 63–0 vote on September 12.

Initially introduced as a separate legislative proposal, the bill was later reworked through a “gut-and-amend” strategy into a robust anti-sweepstakes measure. Governor Newsom’s signature on October 11 signaled the culmination of a multi-month campaign driven by advocacy from tribal gaming organizations and regulated gambling stakeholders.

Tribal Advocacy and Loophole Closure

California’s tribal gaming authorities, such as the California Nations Indian Gaming Association (CNIGA) and the Indian Gaming Association (IGA), strongly endorsed the passage of AB 831. James Siva, CNIGA’s chairman, described the legislation as “the top legislative priority of the session,” emphasizing its importance in safeguarding tribal sovereignty and upholding the constitutional structure for gambling in the state.

Supporters highlighted how sweepstakes operators, frequently headquartered offshore, leverage legal ambiguities by offering dual-currency models. This structure enables players to purchase “gold coins” for entertainment, with the possibility of winning “sweep coins” that can be redeemed for cash, closely mimicking typical casino mechanisms yet avoiding the regulatory accountability and responsible gaming standards of traditional operators.

According to Michael Hoenig, vice-chairman and associate general counsel of the Yuhaaviatam of San Manuel Nation, AB 831 “closes every loophole” and leaves legitimate promotional prize draws — like those run by McDonald’s or Starbucks — untouched.

Opposition Cites Financial Impact

The Social Gaming Leadership Alliance (SGLA), representing the interests of sweepstakes operators, actively lobbied against AB 831. The organization asserted that enactment would cost California hundreds of millions in potential tax revenue and dismantle a sector valued at $1 billion annually.

SGLA executive director Jeff Duncan criticised lawmakers for “disregarding economic reality” and “handing monopoly power to tribes that already control billions in gaming revenue.”

Additional resistance came from smaller tribes, including the Kletsel Dehe Wintun Nation, Sherwood Valley Rancheria, and Big Lagoon Rancheria, which expressed concerns regarding the detrimental effects on isolated communities that depend on digital gaming to support critical services such as healthcare, education, and housing.

Growing National Crackdown on Sweepstakes

California’s move is part of a broader trend, as Montana, Connecticut, and New Jersey have instituted parallel bans in 2025, and states such as New York and Nevada are considering similar legislative actions. This shift is fueled by widespread apprehension about the surge of unregulated social casinos, with legislators citing risks related to consumer protection, potential tax evasion, and illegal gambling activities.

In California, AB 831 is viewed by its advocates as a decisive affirmation of the state’s dedication to maintaining a regulated and transparent gambling ecosystem. Victor Rocha, chairman of the IGA conference, noted, “FanDuel, DraftKings, and the tribes are all on the same side” and share the goal of “the complete eradication of the sweepstakes industry.”

Upcoming Industry Event

All roads lead to Rome, 03–06 November 2025. SiGMA Central Europe takes centre stage at the Fiera Roma, uniting 30,000 delegates, 1,200 exhibitors, and 700+ speakers. This is where legacies are built, and the future takes shape. Connect with the innovators’ driving change.

Key StakeholdersPosition on AB 831
California Nations Indian Gaming Association (CNIGA)Strongly supports
Indian Gaming Association (IGA)Supports
Social Gaming Leadership Alliance (SGLA)Opposes
Kletsel Dehe Wintun NationVoiced concern
Sherwood Valley RancheriaVoiced concern
Big Lagoon RancheriaVoiced concern
  • Author

Daniel Williams

Daniel Williams has started his writing career as a freelance author at a local paper media. After working there for a couple of years and writing on various topics, he found his interest for the gambling industry.
Daniel Williams
Casino Guardian covers the latest news and events in the casino industry. Here you can also find extensive guides for roulette, slots, blackjack, video poker, and all live casino games as well as reviews of the most trusted UK online casinos and their mobile casino apps.

Related news