California moves to outlaw sweepstakes casinos

The measure raises a bigger question: could California’s move signal the beginning of the end for sweepstakes casinos in the US?

📌 Key facts at a glance

• Bill name: Assembly Bill 831 (AB 831)

• Status: Passed Legislature, awaiting Gov. Gavin Newsom’s decision (deadline: Oct. 12, 2025)

• What it does:

  • Bans dual-currency sweepstakes casinos (Gold + Sweeps Coins)

  • Fines up to $25,000 and/or one year in jail

  • Targets operators and complicit service providers

• Exemptions: Tribal casinos, cardrooms, state lottery, legitimate promotional sweepstakes

• Supporters: 50+ tribes, CNIGA, consumer protection groups

• Opponents: SGLA, VGW, smaller tribes seeking digital revenue

Effective date (if signed): January 1, 2026

What the new law does

AB 831 is designed to close a long-standing loophole that allowed operators to mimic online gambling while avoiding regulation. 

Key provisions include:

• Criminalizes sweepstakes casinos using dual-currency models.

• Penalties of up to $25,000 in fines, one year in county jail, or both.

• Extends liability to service providers (payment processors, affiliates, geolocation firms) if they knowingly support operations.

• Explicitly exempts:

  • Tribal casinos

  • Cardrooms

  • State lottery

  • Traditional promotional sweepstakes (e.g., McDonald’s, Starbucks).

What this means for players

For now, Californians can still log in and play at sweepstakes casinos. 

But if Newsom signs the bill, or lets it automatically take effect, operators are expected to exit before the law becomes enforceable in January 2026.

Players themselves face no penalties, but their gambling options will shift toward:

• Tribal casinos

• The California Lottery

• Social casinos with no prize payouts

Who supported the ban and why

The bill drew strong support from over 50 tribes, including the California Nations Indian Gaming Association (CNIGA), alongside consumer protection advocates. 

Their case is based on the following factors:

• Protect tribal exclusivity in gambling.

• Reinforce state gaming law and close loopholes.

• Prevent unregulated operators from offering cash-equivalent gambling without oversight.

Who opposed it and why

Not everyone is on board. Industry trade groups and some smaller tribes have voiced strong opposition.

Supporters	Reasons
Major tribes (CNIGA)	Protect exclusivity, close loopholes
Consumer advocates	Player protection, fair play
Opponents	Reasons
SGLA, VGW	Economic loss, innovation setback
Smaller tribes	Limits sovereignty, revenue opportunities

The Social Gaming Leadership Alliance (SGLA) warned that the law could strip $1 billion in annual economic activity from California. 

Virtual Gaming Worlds (VGW), which partnered with the Kletsel Dehe Wintun Nation, also argued that it limits smaller tribes’ ability to compete.

A national turning point?

California would become the sixth state this year to ban sweepstakes casinos, following New Jersey, New York, Montana, Connecticut, and Nevada.

Given its market size, the move could be the most significant domino to fall yet and provide a major catalyst in the downfall of sweepstakes casinos nationwide.

The road to extinction?

California’s crackdown feels like more than just a local measure. It’s the potential turning point for the entire US gambling landscape.

Whether it sparks the extinction of sweepstakes casinos or a new push for regulation, the decision in the Golden State will be felt nationwide.