Unanimous Legislative Support Precedes Governor’s Signature
AB 831 received overwhelming bipartisan backing throughout the legislative process, passing the California State Senate with a 36-0 vote on September 8 and the State Assembly with a 63-0 vote on September 12. The bill faced no opposition votes during its journey through the legislature, despite vocal resistance from industry stakeholders outside the Capitol.
Assemblymember Avelino Valencia, who authored the legislation, emphasized the bill’s purpose of establishing clear legal boundaries within California’s gaming industry. “These companies were exploiting a technicality,” Valencia stated when introducing the measure. “AB 831 reaffirms that gambling in California must be licensed, transparent, and accountable.”
Comprehensive Ban Targets Operators and Support Services
The new law makes it unlawful to operate, conduct, or offer online sweepstakes casino games that use dual-currency systems mimicking real-money gambling. The legislation extends criminal liability beyond operators to include any entity that “knowingly and willfully” supports such operations, either directly or indirectly.
Entities subject to prosecution under AB 831 include:
- Financial institutions and payment processors
- Geolocation providers
- Gaming content suppliers
- Platform providers
- Media affiliates
Violations of the law constitute a misdemeanor, punishable by fines ranging from $1,000 to $25,000, imprisonment in county jail for up to one year, or both penalties.
Exemptions Protect Legitimate Marketing and Licensed Gaming
The legislation includes specific exemptions designed to protect lawful business activities. Companies such as McDonald’s and Starbucks can continue to operate promotional sweepstakes as marketing tools, provided these promotions are limited, occasional, and incidental to substantial sales of consumer products or services.
Gaming enterprises licensed under the Gambling Control Act and operations of the California State Lottery remain unaffected by the ban. The exemptions were clarified through amendments made during the legislative process to address concerns about traditional promotional activities.
Tribal Gaming Interests Back Legislation
The bill received strong support from California’s tribal gaming operators, with the California Nations Indian Gaming Association (CNIGA) advocating for its passage. Tribal leaders argued that sweepstakes casinos infringed on exclusive tribal gaming rights granted by California voters.
James Siva of CNIGA highlighted concerns about sweepstakes operators attempting to establish partnerships with smaller tribes. “These tactics are efforts to divide tribal unity,” Siva stated, referencing partnerships such as the one established between sweepstakes operator VGW and the Kletsel Dehe Wintun Nation.
Jason Giles, Executive Director of the National Indian Gaming Association, expressed concerns about the speed of the legislative process, warning that AB 831 was “moving way too fast for anyone to comprehend.” However, the bill’s supporters maintained that the measure addresses a clear regulatory gap in California’s gaming framework.
Industry Group Warns of Economic Impact
The Social Gaming Leadership Alliance (SGLA), representing sweepstakes operators, mounted significant opposition to the legislation, arguing it would result in substantial economic losses for the state.
“It is incredibly disappointing that the California Assembly decided to pass AB 831. Beyond the fact that this bill would worsen economic disparities among California tribes, put California to the back of the line in terms of digital innovation in this space, and take away a popular form of entertainment for residents, it will immediately strip $1 billion out of the state’s economy.”
— Jeff Duncan, Executive Director of SGLA
The SGLA cited a study by Eilers & Krejcik Gaming estimating that regulated sweepstakes operations could generate $300 million in state tax revenue. A separate study conducted for SGLA by Seven Letter Insight found that 85% of respondents supported modernizing California laws to regulate and tax sweepstakes operators rather than banning them outright.
Operators Begin Blocking California Players
Major sweepstakes casino operators have already begun adjusting their operations in anticipation of the January 1 enforcement date. Platforms including High 5 Casino and Fortune Coins have started blocking California players, while other providers and content partners are revising compliance policies to align with the new legal framework.
VGW, owner of Chumba Casino, mobilized its California user base before the bill’s passage, using in-app notifications to direct players to Quorum, a digital advocacy tool that enabled users to contact their state representatives directly.
California Joins Growing Movement Against Sweepstakes Gaming
California becomes the 17th U.S. state to take legislative or enforcement action against online sweepstakes casinos, joining Montana, Connecticut, and New Jersey, which enacted bans earlier in 2025. New York’s anti-sweepstakes bill awaits Governor Kathy Hochul’s signature, while Nevada’s sweepstakes ban bill remains pending gubernatorial approval.
As the most populous state in the nation with more than 39 million residents, California’s decision carries significant weight for the sweepstakes casino industry. The state’s action is expected to accelerate similar legislative efforts in other jurisdictions, including Michigan and Florida.
Industry analysts suggest that 2026 could mark a turning point for the sweepstakes casino business model across the United States, with California’s ban potentially influencing regulatory approaches nationwide.
Concerns About Offshore Migration
Consumer protection advocates have raised concerns that California players may migrate to unlicensed offshore gambling platforms following the sweepstakes ban. Since online casinos remain unavailable in California, the state lacks regulated alternatives for players seeking internet-based gaming options.
Offshore operators typically lack responsible gaming tools, clear dispute resolution processes, and protections for player deposits and winnings, raising player safety concerns that factor into the ongoing regulatory debate.
The law takes effect January 1, 2026, giving sweepstakes operators less than three months to cease California operations or face criminal penalties.
Source: California Governor’s Office
