California Governor Gavin Newsom has enacted Assembly Bill 831 (AB 831), effectively outlawing online sweepstakes gambling within the state. This legislation, which received unanimous support from both the State Senate and Assembly, is set to take effect on January 1, 2026, making California the 17th state in the U.S. to legislate against sweepstakes casinos.
The new law prohibits the operation or facilitation of online sweepstakes and dual-currency gambling schemes that emulate real-money casino gaming. Liability extends beyond just the operators to include payment processors, financial institutions, gaming content providers, geolocation services, platform operators, and media affiliates that knowingly participate in promoting sweepstakes activities. Offenders may face misdemeanor charges resulting in fines up to $25,000, imprisonment for up to one year in county jail, or both.
Proponents of the measure contend that sweepstakes casinos have been exploiting a legal gray area for years, branding themselves as “social” gaming websites while allowing players to purchase virtual currency and redeem winnings for cash. Lawmakers characterized AB 831 as a crucial measure to eliminate this loophole and to clearly delineate the lines between regulated gambling and unregulated play.
“These companies were taking advantage of a legal ambiguity,” Assemblymember Avelino Valencia stated, the bill’s introducer. “AB 831 emphasizes that gambling within California must be licensed, transparent, and responsible.”
The legislation provides exemptions for licensed operators including tribal casinos and the state lottery, as well as for legitimate promotional sweepstakes related to actual products and services. Individual players will not be held accountable under this law.
AB 831 has garnered substantial support from California’s tribal gaming community, which argued that sweepstakes casinos had infringed upon their exclusive gaming rights.
Representatives also noted that unlicensed sweepstakes platforms posed risks to consumers, operating without regulatory oversight and responsible gaming mandates. The Senate passed the bill on September 8 with a 36–0 vote, followed by a unanimous 63–0 vote in the State Assembly on September 12.
While the law received bipartisan support, it faced opposition from the Social Gaming Leadership Alliance (SGLA), which represents sweepstakes operators. The organization argued that the ban could result in over $1 billion in lost economic activity and hundreds of millions in tax revenue for California.
SGLA Executive Director Jeff Duncan criticized the legislative decision: “Today’s proceedings revealed a complete disregard for facts, economic realities, and the opinions of tens of thousands of Californians, all to give monopoly power to tribes that have already invested heavily in Las Vegas and coastal Californian properties.”
Concerns within the social gaming industry also highlight that the law’s broad liability language might affect non-gaming businesses, including technology companies and advertisers. Some smaller tribal and community gaming representatives expressed worries that the law could restrict future digital revenue diversification opportunities.
In anticipation of this bill, multiple sweepstakes casino operators, such as High 5 Casino and Fortune Coins, have already begun to limit access for California players. Others are reportedly upgrading compliance systems to align with the new regulations ahead of the 2026 deadline.
California’s action reflects a nationwide movement to control gray online gambling. Earlier this year, similar bans were enacted in Montana, Connecticut, and New Jersey, with proposals in New York and Nevada pending gubernatorial approval. Given California’s substantial size and influence, observers predict that its decision will expedite similar actions in other states, setting a new standard for the regulation of sweepstakes-style platforms nationwide.
Supporters claim that AB 831 restores integrity to California’s gambling landscape by ensuring that all gaming operations are licensed, accountable, and adhere to consumer protection standards. For tribal casinos and state regulators, it signifies a vital step towards enhancing legal clarity and protecting the market from unregulated entities.