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.”
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| Key Stakeholders | Position 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 Nation | Voiced concern |
| Sherwood Valley Rancheria | Voiced concern |
| Big Lagoon Rancheria | Voiced concern |
- Author
Daniel Williams
