Newsom Signs Bill Banning Sweepstakes Gambling in California
California Governor Gavin Newsom signed Assembly Bill 831 (AB 831) into law on Saturday. The new measure effectively bans online sweepstakes casinos across the state. This makes California the most populous state to pass such a prohibition. The law, which received overwhelming legislative support, is set to take effect on January 1.
Law Closes ‘Dual-Currency’ Loophole
AB 831 directly targets online sweepstakes casinos that operate in a legal gray area. These platforms use a dual-currency system to imitate real-money gambling while claiming to be social gaming sites.
Under this model, players buy “gold coins” for entertainment but also receive “sweep coins” that can be redeemed for cash prizes. The new law prohibits this business structure.
Assemblymember Avelino Valencia, the bill’s author, emphasized that the intent was to establish clear legal boundaries. Valencia stated, “These companies were exploiting a technicality,” and AB 831 confirms that all gambling in California must be licensed, transparent, and responsible. The law passed the State Senate 36-0 and the State Assembly 63-0, reflecting unanimous legislative support.
Ban Extends to Financial and Tech Partners
The new law broadens the prohibition beyond the casino operators themselves. It extends the ban to entities that knowingly and willfully support these operations. This includes financial institutions, payment processors, geolocation providers, game content suppliers, platform providers, and media affiliates.
Violations of AB 831 are classified as a misdemeanor, carrying penalties of a fine up to $25,000, up to one year in county jail, or both.
The bill was strongly supported by California’s tribal gaming operators, including the California Nations Indian Gaming Association (CNIGA). Tribes argued that sweepstakes casinos infringed on their exclusive rights to offer gaming within the state. James Siva, CNIGA’s chairman, called the bill a top legislative priority to protect tribal sovereignty and the constitutional framework for gaming.
The prohibition in California, the nation’s most populous state, aligns with a broader national trend. The measure is expected to encourage similar legislative efforts in other jurisdictions, such as Nevada and New York, that are also considering sweepstakes bans.
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