California sweepstakes casino ban wins unanimous legislative vote, heads to Newsom

Backed by major tribal groups, the measure targets dual-currency sweepstakes casino operators.

A California bill banning sweepstakes casino operators is heading to Gov. Gavin Newsom.

The California Assembly passed AB 831, 63-0, Friday afternoon, the last day of the legislative session. Assemblymember Avelino Valencia’s bill makes it a misdemeanor to operate or knowingly support dual-currency sweepstakes sites that mimic casino or sports betting products. Multiple other state legislatures passed similar legislation this year, including those in Connecticut, Montana and New Jersey.

Valencia’s bill initially addressed a separate tribal gaming issue when it was introduced this session. Once in the Senate this summer, lawmakers amended it to ban sweepstakes casinos. It advanced through multiple committees and the Senate floor with unanimous support.

The California Nations Indian Gaming Association and many of the state’s tribes supported the legislation. Still, there were four tribes that spoke out against the bill.

Opponents of the bill cited the “gut-and-amend” process as a shady and rushed tactic to ban sweepstakes casinos. They also argued it would negatively affect other industries that run sweepstakes, such as McDonald’s and Starbucks. An amendment before its final Senate reading explicitly excluded state lottery games and traditional sweepstakes promotions.

“AB831 is a flawed and rushed bill that lacks broad tribal consensus. As Kletsel Dehe Wintun Nation, the Sherwood Valley Rancheria of Pomo Indians, the Mechoopda Indian Tribe of Chico Rancheria and Big Lagoon Rancheria have made clear, this bill would limit economic options available to tribes and worsen already fragile economic conditions,” Jeff Duncan, executive director of the Social Gaming Leadership Alliance, said in a statement prior to its passage.

“What California lawmakers should focus on instead is creating proper regulation that supports online social games, creates new revenue sources for the state and protects economic opportunities for all tribes.”

Sweepstakes casino crackdowns across the country

Lawmakers and regulators across the US have increased scrutiny of the sweepstakes casino industry this year, arguing operators are exploiting loopholes to offer gambling products. The operators use a dual-currency model, offering non-monetary “gold coins” and another currency known as “sweeps coins” that can be exchanged for real-money prizes.

While six other state legislatures have passed similar bans, not all have become law. New York Governor Kathy Hochul has not signed S5935, despite its passing the Senate and Assembly in June. Prior to the bill’s passage, Attorney General Letitia James sent 26 cease-and-desist orders to sweepstakes operators.

Louisiana Governor Jeff Landry vetoed his state’s bill, explaining the legislation was not necessary for the state gaming regulator to enforce its rules. The Louisiana Gaming Control Board then sent 40 cease-and-desist letters to unregulated operators, including sweepstakes sites.

Multiple other states, including Arizona and Michigan, sent cease-and-desist letters to sweepstakes operators.

Eilers & Krejcik Gaming revised its 2025 revenue estimates for the US sweepstakes market this week, bringing it down to $4 billion from an original $4.7 billion, attributed to the growing legislative and regulatory headwinds. The revenue would still be a 16% year-over-year increase. However, Eilers & Krejcik predicts a 10% decline in 2026.